How does staking Solana work?

To stake Solana, you move SOL into a stake account and delegate it to a validator, a computer that helps produce blocks on the network. In return, the stake can earn rewards that are added at the end of each epoch. You can do this from a self-custody wallet, through an exchange, or through a liquid staking pool, and each route handles the steps differently.

How do Solana validators and stake accounts work?

On Solana, staked SOL does not sit in a normal wallet balance. It lives in a stake account, which can be delegated to one validator at a time. Spreading stake across several validators means using several stake accounts.

Each stake account has two permissions. The stake authority can delegate, deactivate, split or merge the stake. The withdraw authority can move undelegated SOL back to a wallet and can replace the stake authority if it is lost. Solana's documentation stresses that the withdraw authority is the one to protect most carefully. Our guide to what a validator is explains their role in more depth.

How are Solana staking rewards paid?

Solana time is split into slots of about 400 milliseconds, and roughly 432,000 slots make up one epoch. At the end of each epoch, the network calculates new issuance and distributes rewards to eligible validators and the people who delegate to them. Validators usually keep a commission. For example, Coinbase's own Solana validator for its staking service lists an 8% commission.

Stake does not start or stop instantly. New delegations warm up and deactivations cool down at epoch boundaries, and a network-wide limit caps how much stake can change per epoch, so exact timing can vary. Coinbase's institutional documentation describes both activation and unstaking as taking about one epoch, roughly two to three days, during which the SOL cannot be withdrawn.

How does staking Solana on Coinbase work?

When you stake through an exchange such as Coinbase, the exchange runs the technical steps for you. Its staking service creates stake accounts, splits and merges them as needed, and delegates to a validator, while rewards accrue on those accounts. The trade-off is that the exchange controls the process, which is the core difference explained in custodial vs non-custodial wallets. Unstaking still follows Solana's epoch schedule.

What is liquid staking on Solana?

Liquid staking uses a stake pool. You deposit SOL, the pool delegates it across a set of validators, and you receive a pool token that tracks your share. That token can be moved or used in other apps while the underlying SOL stays staked. Withdrawing burns the pool token and returns SOL. Pool operators can charge deposit, withdrawal and reward fees, and SOL that is still activating or deactivating may not be available to withdraw right away. See what liquid staking is for the general idea, and whether crypto staking is taxable for the tax side.

Rules differ by country and change often. Check the tax authority or a qualified professional for your own situation.