What staking is — and is not
Proof-of-stake networks secure themselves with locked tokens. By staking, you make your tokens available to a validator that proposes and attests to blocks; in return you receive a share of newly issued tokens and fees. It is not a savings account: the reward is compensation for locking capital and taking protocol risk.
The headline annual percentage rate (APR) is a moving estimate. If more people stake, the reward per token usually falls. If the network's fee revenue falls, so does the yield. And if the token's price drops 20%, a 3% yield does not rescue the position.
ETH vs SOL at a glance
| Detail | Ethereum (ETH) | Solana (SOL) |
|---|---|---|
| Reference staking APR | ≈ 3.1% | ≈ 6.8% |
| Native minimum | 32 ETH per validator | No practical minimum via pools |
| Unlock period | Variable exit queue, often days | ~2–3 days (epoch boundary) |
| Liquid staking | stETH, rETH and others | JitoSOL and others |
| Slashing risk | Yes, for protocol violations | Mostly inactivity penalties; slashing limited |
| Best for | Long-term holders wanting deep liquidity | Higher yield with shorter unlock |
Rates are estimates for illustration, not an offer. Verify the current rate with your chosen provider.
Native staking vs liquid staking
Native staking means running a validator yourself or delegating to one through the network's own mechanism. You keep full ownership and avoid a third-party token, but you need technical setup (for Ethereum) and accept an exit queue.
Liquid staking gives you a receipt token that represents your staked position. It can be used in DeFi, which adds leverage and contract risk. If the token trades at a discount, your effective exit value falls. The extra yield some protocols advertise comes from that additional risk, not from the base network.
Exchange staking is the simplest to use and the least transparent. The exchange controls the validator and may pay a lower rate, change terms, or restrict withdrawals. It is a convenience product with counterparty exposure.
Estimate your net rewards
The calculator compounds a dollar amount monthly, net of validator commission. It ignores token price changes and taxes — the two factors that usually matter most.
Assuming monthly compounding, with rewards restaked.
An estimate, not a quote. Token prices, network rates and commission can change at any time.
The risks that matter
- Market risk. A 5% price fall wipes out more than a year of a 3% yield.
- Lock-up risk. You cannot always exit at the price you want. Ethereum's exit queue can be long during stress.
- Validator risk. Poor uptime means missed rewards; protocol violations can mean slashing. Choose established operators with transparent commission.
- Smart-contract risk. Liquid staking and pooled services add code that could be exploited. Diversify providers if the amount is large.
- Counterparty risk. Exchange staking depends on the exchange remaining solvent and honouring withdrawals.
How to stake, in practice
- Decide on custody. Exchange, native delegation or liquid staking. Write down the trade-off before you deposit.
- Start small. Stake a small amount, confirm rewards accrue and test the unstaking path.
- Check the commission and terms. A 10% commission on a 3% yield still leaves 2.7% gross; a 25% commission is a meaningful drag.
- Track rewards separately. Staking income usually needs to be reported at receipt. Export a record monthly or use tax software that imports staking events.
- Review quarterly. Rates and provider risk change. Restake, move providers or exit if the trade-off no longer makes sense.