What Is Staking? How It Works, Yields & How to Stake SOL [2026 Guide]

Staking is the process of locking up cryptocurrency in a blockchain network, contributing to transaction validation, and earning rewards in return. It's available on chains that use Proof of Stake (PoS), with annual yields typically ranging from 3% to 19% depending on the asset. This guide covers how staking works, yield comparisons, how to get started, and risk management — all explained for beginners.

What you'll learn in this article

• The definition of staking and how Proof of Stake (PoS) works
• The differences between staking, mining, and lending
• Yield comparison across major chains (ETH, SOL, ADA, DOT, etc.)
• Step-by-step guide to staking SOL and managing risks

Definition of Staking

Staking is the process of depositing (locking) specific cryptocurrency into a blockchain network, contributing to transaction validation and block production, and receiving rewards in return. While it's often compared to a bank term deposit, staking rewards are actually incentives paid for helping maintain the network's security. Since Ethereum transitioned from PoW to PoS in September 2022 (The Merge), staking has become a mainstream method for earning returns on crypto assets.

Staking is available on blockchains that use a consensus algorithm called Proof of Stake (PoS). In PoS, block production rights are assigned based on the amount of cryptocurrency held, making it fundamentally different from mining, which consumes massive amounts of electricity.

Why Staking Is Getting Attention

There are three key reasons behind staking's growing popularity:

• Low environmental impact: Consumes far less electricity compared to mining (PoW)
• Low barrier to entry: No high-performance computers required — you can even participate from a smartphone
• Steady returns: Annual yields of roughly 3–19% depending on the asset

There are several ways to earn rewards with cryptocurrency. Let's compare staking, mining, and lending side by side.

Mining is used on PoW (Proof of Work) chains like Bitcoin and requires specialized hardware and significant electricity. Lending, on the other hand, involves lending your crypto to a platform to earn interest and works regardless of chain type. For more on lending, see our article on "Token Lending."

Staking yields vary significantly by asset and platform. Here's a comparison of major chain yields as of March 2026.

Yield Overview by Asset

The difference between network yields and exchange yields exists because exchanges deduct fees for running validators. However, exchange staking is simple to set up, making it a convenient option for beginners.

Factors That Affect Yields

• Staking participation rate: As more participants join, rewards per person decrease
• Network fees: Higher transaction activity means additional rewards
• Inflation rate: Chains with higher token issuance tend to have higher nominal yields
• Validator commission: The fee rate charged by the validator you delegate to

There are two main ways to start staking: exchange staking and DeFi staking.

Method 1: Exchange Staking (Beginner-Friendly)

The easiest approach is using a crypto exchange. Some services automatically distribute staking rewards just by holding eligible assets in your account.

Steps:

1. Open an account at OKJ (OKCoinJapan)
2. Purchase a staking-eligible asset (ETH, SOL, etc.)
3. Apply for the staking service (not needed if auto-distribution is available)
4. Rewards are periodically credited to your account

Pros: Easy setup, no private key management required Cons: Slightly lower yields (fees are deducted)

Method 2: DeFi Staking (Intermediate)

This method involves staking directly on the blockchain using a wallet. Since there's no intermediary exchange, fees are lower and yields tend to be higher.

Steps:

1. Set up a compatible wallet (e.g., Phantom wallet for SOL)
2. Transfer cryptocurrency to your wallet
3. Select a validator from the wallet's staking feature
4. Enter the staking amount and delegate

For instructions on setting up a Phantom wallet, see our "How to Use Phantom Wallet" guide.

Solana (SOL) offers attractive staking yields and a relatively simple process, making it a great choice for your first DeFi staking experience. Here's how to do it with Phantom wallet.

Step 1: Get SOL in Your Phantom Wallet

Install Phantom wallet and deposit SOL. You'll need at least ~0.01 SOL for gas fees (transaction fees), so prepare a bit more than you plan to stake.

Step 2: Choose a Validator

From Phantom's staking screen, select a validator to delegate your SOL to. Key factors to consider:

• Uptime: 99% or higher is ideal
• Commission rate: Typically 0–10% — lower means more rewards for you
• Slashing history: Check if the validator has ever been penalized
• Stake amount: Avoid validators with extremely low or extremely high stakes

Step 3: Execute the Stake

Enter the amount of SOL to delegate and approve the transaction. It takes 1–2 epochs (approximately 2–4 days) for the stake to become active. Once active, rewards are automatically added every epoch (roughly every 2 days).

Step 4: Check Your Rewards

You can view your accumulated rewards and current yield on Phantom's staking screen. SOL's network yield is approximately 6–7% annually, with the displayed yield reflecting the validator's commission deduction.

While staking is a relatively safe way to earn returns, it's important to understand the following risks before getting started:

1. Slashing (penalties) — If a validator engages in malicious behavior or experiences extended downtime, a portion of staked assets may be confiscated. Choosing a reliable validator helps mitigate this risk
2. Lock-up period — After unstaking, there's a waiting period before you can withdraw your assets. ETH takes days to weeks, DOT requires 28 days, and ATOM requires 21 days. SOL is relatively quick at about 2–3 days
3. Price volatility risk — You cannot sell during the lock-up period even if the asset's price drops sharply. A 7% annual yield means little if the price falls 30%
4. Validator risk — If your delegated validator ceases operations, you stop earning rewards. Diversifying across multiple validators helps mitigate this
5. Taxes — Under Japanese tax law, staking rewards are taxable as miscellaneous income at the time of receipt. Keep records of your rewards, as you may need to file a tax return

Q1: Can I start staking with a small amount?

With exchange staking, you can start with as little as a few hundred to a few thousand yen. DeFi staking requires gas fees (transaction fees), so you'll need at least a few thousand yen. Solo staking ETH (running your own validator) requires 32 ETH (worth several million yen), but exchange staking and liquid staking allow participation with small amounts.

Q2: Which is better — staking or lending?

Staking is recommended for beginners. Staking rewards are guaranteed at the blockchain protocol level, making the risk of platform failure relatively low. Lending involves depositing assets with a platform, so you bear that platform's credit risk. On the other hand, lending lets you earn interest even on PoW assets like BTC.

Q3: Are staking rewards taxable?

In Japan, staking rewards are classified as "miscellaneous income" and are taxable. Income is calculated based on the market value at the time rewards are received. If your annual miscellaneous income exceeds 200,000 yen, you're required to file a tax return. We recommend keeping records of when you received rewards and the market value at that time.

Q4: What is liquid staking?

Liquid staking is a mechanism that lets you stake cryptocurrency while receiving a "staking receipt token" (e.g., stETH, mSOL) in return. With regular staking, your assets are locked during the staking period, but liquid staking allows you to use receipt tokens in DeFi to earn additional rewards. Major services include Lido (for ETH) and Marinade (for SOL). However, this introduces additional risks from smart contract bugs and hacking.

To start staking, you first need to open an account at a crypto exchange. With OKJ (OKCoinJapan), simply completing identity verification (KYC) within one month of opening your account earns you 1,000 yen worth of Bitcoin for free. Plus, if you open your account through the link in our OKJ Account Setup Guide and complete identity verification, then click the "Opened an OKJ account and completed KYC" button on your Candy Drops profile page, you'll also receive 50,000 Candy Drops points. These points can be used to enter premium giveaways for cryptocurrency and Amazon gift cards. → Get 1,000 yen worth of Bitcoin by opening an account! OKJ Account Setup Guide for Beginners

Key Takeaways!

• Staking involves depositing crypto into a PoS chain to earn rewards — it's easier to start than mining
• Yields vary by asset: ETH ~3.5%, SOL ~7%, DOT ~12%, ATOM ~19%
• Exchange staking lets beginners start with just a few thousand yen
• Understanding the risks of slashing, lock-up periods, and price volatility, and diversifying your investments, is essential

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References:

• stakingrewards.com — Staking Rate Data
• Ethereum.org — Staking Overview
• Financial Services Agency — Information on Crypto Assets