Staking on Ethereum vs. Solana: A comparison

Staking has been a part of Solana since it launched on mainnet beta over three years ago. Liquid staking, meanwhile, has been fully functional since Marinade launched its liquid staking pool in August, 2021.

Now that Ethereum has transitioned from Proof-of-Work to Proof-of-Stake following The Merge in September 2022, it has introduced the opportunity for ETH holders to also participate in staking and receive ETH rewards.

Ethereum 2.0 is the latest major chain to go Proof-of-stake, citing its energy efficiency compared to its original Proof-of-Work mechanism. Solana, meanwhile, is one of the most popular blockchains for staking with over 70% of the total SOL token supply currently staked.

You don’t have to be a technical or DeFi expert to participate in staking, while more advanced users can operate a validator on either network for more control and potentially more staking rewards. The benefits of staking stakers either ETH or SOL is not only more tokens but contributing to a more resilient and censorship-resistant network.

Let’s compare staking between these two major Layer-1s: Ethereum and Solana.

Staking ETH on Ethereum

With the Shanghai upgrade taking place on April 12th, ETH stakers can now unstake their tokens (pending a 2–3 day waiting period). When you stake or unstake ETH in DeFi, it is a transaction that requires gas fees, which range greatly depending on the current traffic on the chain. For smaller ETH holders, the fees to stake and unstake, especially during congested periods, can greatly affect the amount of rewards received upon unstaking. Here are the types of ways to stake:

• Solo staking: Ethereum staking is designed so that anyone can operate a node out of their home with common hardware. The main expense is you must have a minimum 32 ETH ($60,000). Keep in mind that downtime can affect your validator performance, and malicious behavior can result in “slashing” from other validators which can take away a portion of your ETH stake.
• Staking as a Service: Staking with a validator frees you from the responsibility of running a node, but you must rely on the performance of the validator you choose. Because the keys to your stake remain in your possession, you are able to unilaterally withdraw your ETH.
• Centralized staking: Typically offered by centralized exchanges and dedicated staking platforms, this option is suited to retail users: you simply need to deposit ETH into the staking wallet specified by the CEX and the provider will take care of the rest. You don’t have to pay on-chain gas fees, either. The main drawback to this system of course is that it incurs custodial risk and APY may be lower.
• Liquid staking: When you stake to a pool, the protocol provides stakers a collateral token denoting their stake. This token can be used as collateral elsewhere in DeFi or be traded instantly. Individuals are free to lock any amount of ETH. Lido is the largest liquid staking pool with nearly 75% market share, while Coinbase and Rocketpool are also popular.

Staking SOL on Solana

Staking options on Solana are comparable to Ethereum but with some key differences, including the token emission schedule, operating expenses, liquid staking protocols, and the number of validators to stake with. Gas fees on Solana are minuscule (well under 1 cent), meaning SOL holders of any size can participate easily.

Running a validator: Hardware requirements on Solana are higher than solo staking on Ethereum, and most validators operate out of server farms or hire companies to manage operations. There is no minimum amount of SOL to start a validator but annual breakeven requires about 6,000–7,000 self-staked SOL ($135,000). Unlike Ethereum, there is no “slashing” implemented on Solana yet.

Native staking: With this method, SOL holders select a validator and share the staking rewards. This can be done directly from most of the leading Solana-compatible wallets. You can stake any amount of SOL, and it will become active once the next epoch begins (epochs last 2–3 days). Keep in mind there is also a “cooldown” period to unstake unless you use an unstaking liquidity pool like Marinade.

Want to search for and view the performance of individual validators? Check out the Validator Dashboard, which has key statistics, comparison tools and more.

Liquid staking pools: In this case, users stake SOL for a rewards-bearing liquid staking token that can be used across the Solana DeFi-NFT ecosystem. Solana has had fully functional liquid staking since August, 2021 when the Marinade Finance protocol was launched. Marinade uses a stake pool delegation strategy that distributes stake automatically to 100+ validators, so stakers don’t have to worry about their validator going offline or changing commission. You can visit The Cookbook to see examples of how liquid staking tokens can be utilized in DeFi and NFT marketplaces or chat with fellow Chefs in the #mSOL-Strategies channel in Discord.

Centralized staking: Leading central exchanges like Coinbase and Kraken operate their own Solana validator and offer this to customers for convenience. Typically, the APY passed down is lower than staking or liquid staking in DeFi and the funds are in their custody.

An alternative, if you’re a Coinbase and Kraken user, would be to swap your SOL for the mSOL liquid staking token. mSOL is the only third-party, tradable liquid staking token supported by these central exchanges. This way, you will receive the same APY as those holding the rewards-bearing liquid staking token in DeFi.

No matter which chain or method you choose, staking is one of the best ways to participate in the security and robustness of proof-of-stake blockchains. If you have questions, pop into the Marinade discord and ask a Master Chef! They are here to help!

Stake SOL for mSOL at Marinade.Finance | Visit Marinade Discord