I was chatting with a p0x friend about SOL the other day, after it pumped over 10% in a week.
I hold a lot of SOL as part of my Banking because it meets my requirements, plus it’s still low in price. I mean, if Bitcoin goes to a million dollars for 1 BTC, that’s still only a 12x gain or something. SOL only needs to hit $1,200 for that. Bigger gains from smaller moves.
The Basics
For the uninitiated, SOL staking works through “validators”, who usually take a small cut of your earnings.
Basic interest is around 6% per year.
It’s “cold” staking: you click a button, lock up your SOL, and can close your wallet. The validators do the actual staking so you don’t need a machine running 24/7 like many PoS coins. That’s good.
Unstaking, however, takes days. I mean literally days. Staking works in “epochs”, which are about 2.5 days long, so you might get unstaked SOL back in minutes if you happen to hit the end of an epoch, but you might have to wait days for it.
Anyway, we were chatting about how it’s good for Banking, so I looked into the best ways to earn from SOL.
1. Staking on an Exchange
Most exchanges offer on-site staking.
The minimum stake is usually 0.1 SOL.
You don’t get to choose a validator, so you can’t choose one with 0% fees.
Interest rates vary wildly: MEXC does 6.61% for on-chain staking and CoinEx offers 4.37% (right now; those rates are flexible). That’s about 30% difference in interest rates, so shop around.
Some exchanges do a weird swap thing where they give you a token representing your SOL while your coins stake – MEXC does this with MXSOL. The advantage is that you can trade staked SOL as if it were in your exchange wallet as normal. The downside is that MEXC takes 5 days to unstake and convert the MXSOL back to SOL, so think long-term savings.
Of course, you’re putting your money in someone else’s wallet, thus losing control and privacy (if you do KYC, which neither of those exchanges requires for basic staking).
2. Staking it Yourself
Thankfully, as I mentioned above, SOL stakes cold. You don’t have to run a wallet 24/7 to earn, which means staking it yourself is surprisingly simple.
The minimum stake is usually the same 0.1 SOL, depending on which wallet you use.
Phantom wallet (web3, which I trust less) allows you to choose your own validator, so you can find a good, cheap one.
Exodus (desktop) does not allow you to choose, so you’ll lose about 7% of your earnings (last time I checked, that may have changed).
In either case (and presumably in other wallets), staking is a one-click proposition. Very easy, which is great when compared to a lot of staking coins.
Interest rates are the usual ~6% from the chain’s basic PoS setup.
Unstaking takes the usual minutes-to-days, as outlined above.
The big advantage is that you never lose control of your coins: they’re in YOUR wallet, with YOUR private keys.
If your validator goes offline, stops running, or gets abducted by aliens, your coins stop staking but they’re still your coins in your wallet. You just re-stake them!
3. Earning Interest on an Exchange
A third – and honestly unexpected – option is to earn interest on an exchange.
Both MEXC and CoinEx offer this, though MEXC demands KYC to access the option.
Instead of staking on-chain, you assign (and perhaps lock) your SOL in the same way you do to earn interest on other coins.
MEXC currently offers 8% interest on this method, CoinEx offers 5.09% (again, those are flexible and will change).
The big advantage is that you don’t actually stake your coins, so there is no delay to unstake them!
For people who want to start small and build up their banking, CoinEx comes out the winner here:
- no KYC
- 5% interest
- instant subscription and redemption
- minimum 0.05 SOL (less than $5)
That means you can save your SOL, get daily interest and, when you want to add $1 of earnings (for example), you simply unsubscribe instantly and resubscribe with the new amount. For 1% less per year, that seems a decent trade-off… though putting your SOL in someone else’s wallet is, as always, a risk.
MEXC’s interest is better, but requires KYC. Same deal otherwise, with instant access and everything.
If you’re banking 40+ SOL and don’t mind KYC, MEXC does a 7-day fixed lock-up option that gives you 20% interest (per year, not per week).
Which is Best?
As I always say, “best” is relative.
If you’re paranoid about rug-pulls, dodgy exchanges, privacy, and ownership, stake SOL yourself. It’s surprisingly easy.
If you trust exchanges, I’d go for the interest option. It generally pays more than staking and gives you instant access.
If you’re staking small amounts and building, CoinEx looks great for no KYC.
If you’re staking a lot of SOL, that 20% MEXC option is very tempting.
Do you bank SOL somewhere? Stake it? Have another strategy that’s better than these? I’d love your input!
