Skip to content

Sign Up

or

Forgot Password?

Don't have an account?

Sign Up

or

By submitting my information, I agree to the Privacy Policy and Terms of Service.

Already have an account?

This is how much Solana staking really rewards SOL investors

This is how much Solana staking really rewards SOL investors

Solana (SOL) is one of the best-performing cryptocurrencies in 2023, with over 200% in price gains year-to-date. This results from a growing demand for its native token, which investors can stake in exchange for staking rewards.

Notably, Solana is the second-largest cryptocurrency by Staking Market Cap, according to data from StakingRewards.com. As of October 24, there is $12.72 billion at stake in Solana’s network, for a total of 400.05 million SOL tokens locked by validators and delegators in the protocol.

The protocol creates new tokens to reward investors when they stake their SOL to secure the Solana blockchain. Similar to what happens with Bitcoin (BTC) mining or Ethereum’s (ETH) system. However, the supply inflation resulting from these rewards can also impact the real reward rate for Solana investors.

It is essential to understand that the increased circulating supply dilutes the SOL holder‘s true value. Finbold demonstrated this dilution in a previous report analyzing the price Solana would trade at if it hits its all-time high market cap.

Solana staking reward rate vs. real reward rate

In this context, Finbold turned to StakingRewards.com to discover how much Solana staking protocol is really rewarding its investors after locking up their capital with SOL. The raw numbers show that the network has paid 905.03 million dollars year-over-year.

Interestingly, despite having an estimated annual reward rate of +7.08%, the real reward rate (adjusted by Solana’s massive supply inflation) is -0.29% per year. This means a staking position of 1,000 SOL ($30,000) would incur yearly losses of $87.

Staking Solana data
Staking Solana data. Source: StakingRewards.com

This is one of the worst estimated real reward rates for the leading cryptocurrencies by staking market cap. As for comparison, Ethereum has an estimated real reward rate (adjusted by supply inflation) of +3% versus its +3.47% ETH staking reward.

At the time of publication, 772,980 crypto wallets were staking 71% of Solana’s market capitalization. Moreover, SOL staking has increased by 69% in the last 24 hours despite its low estimated reward rate discounting the token’s inflation.

Latest posts

Finance Digest

By subscribing you agree with Finbold T&C’s & Privacy Policy

Related posts

Services

IMPORTANT NOTICE

Finbold is a news and information website. This Site may contain sponsored content, advertisements, and third-party materials, for which Finbold expressly disclaims any liability.

RISK WARNING: Cryptocurrencies are high-risk investments and you should not expect to be protected if something goes wrong. Don’t invest unless you’re prepared to lose all the money you invest. (Click here to learn more about cryptocurrency risks.)

By accessing this Site, you acknowledge that you understand these risks and that Finbold bears no responsibility for any losses, damages, or consequences resulting from your use of the Site or reliance on its content. Click here to learn more.