Stakers delegate Solana’s native token SOL to validators to help increase these validators’ voting weight. Such action indicates a degree of trust in the validators. Stakers delegate to ensure validators cast honest votes and ensure the network's security. If a network malfunction is detected, halting will occur, and culprits will be penalized. The details on assessing this will change as specific slashing rules and penalties are under protocol’s active exploration.

To participate in staking, it’s important to differentiate between the two accounts in Solana. The account necessary for delegating stake to a validator’s vote address account is the stake account. The stake account can be used to delegate tokens to validators on the network to potentially receive rewards for the owner of the stake account. The validator nodes that this stake is delegated to have the opportunity to vote on the current state and PoH height by signing a transaction into the PoH stream. No minimum delegation amount is set, meaning anyone can participate. Delegating a stake is a shared-risk, shared-reward financial model that may provide returns to holders of tokens delegated for a long period. This is achieved by aligning the financial incentives of the token-holders (delegators) and the validators to whom they delegate. The more stake a validator has delegated to them, the more often this validator is chosen to write new transactions to the ledger.

Each epoch of Solana’s staking lasts roughly two days. An epoch is when a sequence of leaders is selected to append entries to the ledger. The warm-up period is when the staked amount is counted as a stakable balance. During this period, some portion of the stake is considered “effective”; the rest is considered “activating” and is not eligible to receive rewards until fully activated. Changes occur on epoch boundaries. The cooldown period is before the newly un-delegate tokens are available to withdraw. Once a stake is deactivated, some part is considered “effective” and “deactivating”. As the stake cools down, some of it continues to receive rewards and be exposed to slashing but eventually becomes available for withdrawal after the full period.

Requirements for validating

Staking in Solana requires a bond. A bond in PoS is the equivalent of the capital expense needed in PoW systems. In the Bitcoin ecosystem, a miner invests in hardware and electricity infrastructure and commits to running a node on a single blockchain branch. Within Solana, the bond is the number of tokens the validator commits to the system as collateral while they validate transactions. Bonding moves coins to a bonding account within the users’ identity. However, these funds cannot be transferred and must remain in the history until the validator removes them. Bonds are valid after the supermajority of current stakeholders has confirmed the sequence within the blockchain.

What are the risks of staking?

Risks of staking

Validators are at risk of slashing for poor performance. This occurs when a validator votes on two separate sequences in the blockchain. A malicious vote will remove and add a validator’s bonded tokens to the mining pool. Slashing also occurs if a vote is cast for an invalid hash generated by the PoH generator.

Delegated funds, however, are never at risk of theft. These remain in control of the delegators at all times.

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