Solana (SOL) Staking Guide
Solana (SOL) Staking Guide
As of November 30th, 2020, there were more than 7,800 crypto-assets in existence, from first-generation market leaders like Bitcoin (BTC) to trail-blazing newcomers such as Solana (SOL).
Like most third-generation blockchains, Solana has been primarily designed to tackle the issue of scalability associated with networks such as BTC. To this end, it’s a web-scale blockchain that provides incredibly fast and scalable transactions, while it also features an additional layer of functionality that supports decentralised apps and marketplaces.
Solana has definitely emerged as a high-performance blockchain since its inception in 2017, currently supporting an impressive 50,000 TPS (transactions-per-second) and 400ms block times. To put this into context, the average TPS completed on the BTC blockchain is approximately five, whereas Ethereum can handle roughly double that amount.
In terms of block times, the Bitcoin average is around 10 minutes (although this can vary significantly depending on overall demand), whereas the corresponding number for Ethereum is between 14 and 15 seconds overall. Even established payment systems such as Visa can only process between 1,500 and 2,000 transactions per second, which is considerably lower than the existing performance of the SOL network.
These numbers certainly support the overarching objective of the Solana blockchain and its founder Anatoly Yakovenko, who wanted to allow transaction throughput to scale proportionately with network bandwidth while satisfying the core properties of a blockchain; namely decentralisation, security and sustained scalability.
Going forward, it’s forecast that the system will be able to support up to 710,000 TPS on a standard gigabit network, and a staggering 28.4 million TPS on a 40-gigabit network. This is based on optimal performance, of course, but it highlights the unique promise that Solana has in the existing crypto marketplace.
Also central to the appeal of this blockchain is its unique Proof-of-History feature, which works alongside a Proof-of-Stake (PoS) consensus mechanism (which is typically better from the perspective of energy efficiency and capable of providing more options for punishing bad and malevolent actors). By utilising the Proof-of-History concept, users are able to create historical records that prove an event occurred during a specific moment in time. To achieve this, it utilises a high-frequency Verifiable Delay Function, which requires a number of sequential steps for the purpose of evaluation. Once an event (such as a transaction) has been evaluated, it will be given a unique hash and a count that can be transparently and efficiently verified.
The count serves as a timestamp that records when the transaction initially occurred, while every node within the network features a cryptographic clock that accurately organises the chronological ordering of events. It’s this that allows for particularly high throughput within the Solana network, without compromising on either the efficiency or security of individual transactions.
There’s no doubt that Proof-of-History is also an innovative way of improving the time spent confirming the order of transactions, and when combined with a PoS consensus mechanism, it makes the selection of a next block validator considerably easier.
Most importantly, individual nodes require less time to validate the order of transactions, tackling one of the primary issues with first-generation blockchains with tremendous efficiency.
The Price History of the SOL Token
As we’ve already touched on, the Solana network was founded in 2017, while its initial mainnet went into operation in the third quarter of June 2018.
It subsequently launched on Mainnet Beta in March 2020, shortly after raising $1.76 million in funding through a public token auction hosted on CoinList. The native SOL token then launched in April at a price of $0.7768, largely maintaining this level of value through December 2020.
However, the value of the SOL token increased incrementally during Q1 2021, reaching $19.47 on March 31st. This was triggered by the completion of several high profile DeFi and dApp projects on its platform, while it was also heavily influenced by the wider crypto bull run. This trend continued throughout much of Q2, with the SOL coin peaking at $55.91 on May 18th.
Of course, SOL lost some momentum throughout June, as the total market capitalisation of all cryptocurrencies fell below $1.5 trillion and several assets crashed. Despite this, and sinking back to $24.69 on May 23rd, SOL has since rallied and remains competitively priced at $33.97 in the current marketplace.
What does the future have in store for SOL?
Well, most price predictions are overwhelmingly positive for SOL, with Coin Price Forecast estimating that the token will achieve a year-end price of $63.19 in 2021. What’s more, treble-digital growth is forecast through 2033, with the asset’s price expected to reach $233.08 and $267.33 in 2025 and 2030 respectively.
This highlights the immense growth potential of the asset, which is built primarily on the blockchain’s incredible scalability, high performance and rising demand within the burgeoning DeFi space.
How to Stake SOL With Atomic Wallet
If you do decide to invest in SOL and leverage its future price growth, Atomic Wallet provides a secure and custody-free storage option that can be accessed seamlessly through both desktop and mobile devices.
As a non-custodial wallet, your private keys will be stored and encrypted directly on your device, rather than a centralised exchange. This minimises the risk of your wallet being hacked, while it also affords you complete control over your funds and transactions.
Interestingly, SOL is now one of the 13 crypto assets that can be ‘staked’ through Atomic Wallet. This refers to the process of temporarily ‘locking up’ and leveraging specific tokens to act as a validator within a decentralised network, with a view to guaranteeing the security and integrity of individual transactions. With Atomic Wallet, staking is rewarded with an annual ROI, creating a passive stream of income and one that’s distributed through recurring monthly payments.
Currently, SOL offers a 7% ROI, while you can stake up to 100,000 coins over the course of between 24 hours and 12 months. So, if you staked the maximum amount of tokens for the duration of a year, you’d earn 7,000 coins with a total value of $237,138.52 (at the real-time price point of $33.97).
The question that remains, of course, is how can you stake SOL tokens through Atomic Wallet?
Here’s a step-by-step guide to help you on your way!
Send SOL to Your Wallet or Exchange it
Once you’ve opened Atomic Wallet on your device, the next step is to ensure that you have at least one SOL token reflected in your balance.
However, you currently cannot buy SOL directly through Atomic Wallet, so you’ll either need to purchase tokens elsewhere and send them directly to the platform or exchange an alternative crypto asset with SOL through the app.
Atomic Wallet features a built-in exchange that supports more than 500 crypto assets, while you can freely swap tokens without having to verify your identity or follow time-consuming ‘Know Your Customer’ (KYC) protocols. The exchange also provides real-time prices for assets and cryptocurrency pairs, so you can ensure that you time the transaction to achieve the best possible value.
You could also buy into the Atomic Wallet membership scheme, which is built around the platform’s native AWC token. Simply buy in at the minimum rate of 100 AWC, before exchanging them with BNB on Binance Dex. Then, you can exchange your holdings directly with SOL coins through the app, storing these safely in your wallet in the process.
Select SOL and Start Staking!
The next step is to click through the ‘All Assets’ tab that runs along the horizontal menu at the top of the page, as this will open up a list of tokens supported on Atomic Wallet.
Then, you’ll need to scroll down and select find Solana, before clicking on the three vertical dots that sit to the right of the asset’s market cap, price and trading volume data. This will bring up ‘Staking’ as part of a drop-down menu, and selecting this option will take you directly to the platform’s staking interface.
This page will confirm the real-time SOL price and annual ROI, along with your available balance for staking. You can also review the total amount staked (if applicable) and potential rewards, and once you’re ready, the next step is to hit the ‘Stake SOL’ button.
Set Your Staking Terms and Lock in Your Funds
It’s at this stage that you can set your precise staking terms, by establishing how much you want to stake and the duration of the agreement.
As we’ve already said, you can stake between one and 100,000 SOL tokens, while the potential time frame for staking runs between 24 hours and 12 months.
You can use the relevant toggle buttons to adjust the stake amount and staking period, and as you do this, your potential earnings (in both tokens and dollar terms) will update on the right-hand side of the screen.
You can also choose a single validator at a time at this stage of the process, simply by clicking on the relevant name. If you scroll down, you’ll also see some additional token information that may be relevant, such as the daily staking rate (currently 0.0192% for SOL), market capitalisation and real-time volume.
It’s also crucial to note that you’ll have to pay a nominal network fee when you initially stake or unstake your SOL. So, it’s recommended that you don’t stake all your funds as part of this process, and instead leave at least a small SOL amount to pay the requisite fee. Otherwise, you won’t be able to unstake your deposit later on, and this can create significant issues and confusion in some instances.
The fees in question are charged directly by the Solana blockchain, so no additional funds are directed to Atomic Wallet.
Once you’ve set terms that you’re comfortable with and reviewed the data in full, the next step is to hit the ‘Stake and Earn Crypto’ icon to the right of the staking calculator!
Your SOL Tokens are Now Locked
Once you’ve hit this button, your stake funds will be locked in a separate address. They’re technically staked as per the terms of the agreement at this stage, so the address will start to generate rewards with every block created.
In fact, you’ll start earning your SOL rewards in two epochs (which equates to four days, with one epoch lasting for 48 hours), from the moment that your staked funds are locked.
Once rewards have been accumulated, you can click ‘Claim’ at any time to withdraw the requisite funds as and when required. Broadly speaking, rewards will be deposited into your staking address every two days, so you should see the fruits of your labour within a relatively short period of time.
‘Unstaking’ is an available option at any time during the process, and you can end the agreement without forfeiting any of the rewards that you’ve garnered to date. However, you’ll need to allow a full epoch (approximately two days) for the unstaking process to be completed, although this can be done within 24 hours in some instances.
The unstaking process
The process for unstaking your SOL is relatively simple, and largely similar to the steps required when staking your assets in the first place.
Simply select SOL the same way as before on the app (or choose ‘Staking’ on the main menu at the top of the page and scroll down to find the relevant asset), before clicking ‘Unstake’ and entering the precise amount that you want to remove from the address.
Once the two-day (or one epoch) period is over, your unstaked SOL amount should appear under ‘Available Withdrawals’. At this stage, you simply need to select ‘Withdraw’ to have your coins deposited in your normal SOL address.
If you do have any issues with either staking or unstaking your funds, you contact Atomic Wallet’s 24/7 customer support team (by reaching out directly through this online contact form).
Or, the platform has an outstanding and detailed ‘Knowledge Base’, in which you can search for specific pieces of information about staking and unstaking your SOL tokens.