Choosing a validator

With more than 1,000 active Solana validators, you have many choices for where to stake your SOL. We would obviously be delighted if you choose to stake with us, but regardless, we suggest the following as key considerations in choosing a validator.

Avoid staking with centralized exchanges

Staking through centralized exchanges like Binance or Coinbase is the single most common way holders stake SOL. Unfortunately, it’s also by far the worst option, for three reasons.

First, centralized exchanges are risky. When you stake with a centralized exchange, you are exposed to the risk that that exchange goes out of business, as happened with FTX and numerous other exchanges over the years.

Second, centralized exchanges typically charge relatively high commissions for staking. Coinbase and Binance each charge 8%, whereas Litx charges no commission.

Third, centralized exchanges control a large portion of staked tokens, which can concentrate power and undermine the decentralized nature of the Solana blockchain. By choosing independent validators instead of centralized exchanges, you help promote a more secure and resilient network.

Returns are similar among most validators

One common misconception is that some validators offer significantly higher returns than others. In reality, the staking rewards across most validators are quite similar due to competitive pressures and the fact that almost all validators run the same software. Furthermore, what little differences do exist are subject to random fluctuations from epoch to epoch, so rankings by APY are often misleading.

Rather than focusing solely on stated APYs, consider other factors such as the validator’s reliability, security practices, and their contribution to the network’s decentralization.

Support decentralization by staking with smaller validators

Decentralization is a core principle of blockchain technology, and it’s essential to support this by staking with smaller or less dominant validators. These validators often provide robust security and performance while contributing to a more distributed and resilient network. By diversifying your stake and choosing smaller validators, you help prevent any single entity from gaining too much control, thus enhancing the overall security and health of the Solana blockchain.