Welcome to this post, where we are going to see one of the best alternatives for staking Solana, and get the maximum return on your investment.
To do so, we will mainly use Marinade together with other platforms that we will see later on. This platform allows us to do SOL staking with our wallet and get a better percentage than what other platforms such as centralized exchanges offer.
What is Marinade Finance
Marinade.finance is a liquid staking protocol built on top of Solana. People stak their Solana tokens with Marinade using automatic staking strategies and receive “staked SOL” tokens that they can use in the DeFi world or switch at any time to original SOL tokens to stop staking.
Liquid staking is an alternative to traditional staking: it allows users to stkaing any amount of SOL and effectively stop staking your SOL without the requirement to wait 1~3 days before the staking warms up or cools down. Warming up or cooling down of staking usually takes about 3 days.
What is Marinade Solana (mSOL)
Here we find the part for staking our Solana tokens. Currently, it is giving 6.21% APY annually, but we will see later on ways to increase this annual % and generate a higher return on your investment.
In stake, we can exchange our Sol for marinade solana (mSOL), which is the staked version of SOL, and we will find it in our wallet when we exchange the SOL for the mSOL. The operation of MSOL is very similar to the Anchor protocol with UST and aUST. mSOL is a cryptocurrency that increases in value with respect to SOL without the need to have your cryptocurrencies locked in a platform. So, when a year has passed, you will be able to exchange your mSOL for SOL back and receive the same amount of SOL you indicated + the annual % APY given by the platform. Also, you can check after a few days or months, how the same amount of mSOL, will give you more SOL tokens each time, by increasing its value with the staking.
The main advantage of this type of staking, is that we will have mSOL in our wallet, and we can use it to generate even more annual percentage in our investment, with platforms like Saber, Solfarm or Sunny in the Solana ecosystem. This is the main difference, between this type of staking, and the staking where you lock your tokens and can’t use them. So exchanging the SOL for mSOL, will currently give us 6.21% APY or more of SOL after one year, and on top of that we can use Msol on other platforms to generate even more.
Now that you know how the mSOL token works, let’s see how to switch from SOL to mSOL. The first thing we will need is a wallet compatible with the Solana network, if you don’t have one my recommendation is to use Phantom as it is the simplest one.
With our wallet, we will need to send our Solana tokens in our wallet. Here is a guide on how to withdraw Solana from Binance to your wallet if you are new and don’t know how to do it.
With the SOLs in our wallet, we will go to marinade.finance, and in the launch app. Here, at the top right you will see a connect wallet button, we will click there. We indicate our wallet, and click on connect in our wallet.
Here, we indicate the amount of SOL we want to stake and exchange for mSOL. Sometimes it may not be available the option to change SOL for mSOL, due to the great demand that has been these last days. If this is the case, come back later or another day and you will surely be able to staking your SOL.
With the amount of SOL indicated, click on stake. Confirm in our wallet, and we will have mSOL in our wallet. As you can see, you will not receive a 1:1 from SOL to mSOL, and below you can see the conversion ratio above the stake button. As we have said before, this is because mSOL appreciates with respect to SOL, and this is how liquid staking works.
The operation of unstake is the same as stake, but in reverse. In this case, at the top, we find the marinade solana (mSOL), and at the bottom the amount of SOL we are going to receive. Here you can exchange your marinde tokens for SOL at any time to get back the Solana token, if you want to sell it or send it to another wallet or centralized Exchange.
Enter the amount of mSOL, click on unstake now, confirm in your wallet and in this simple way, you will have Solana back in your wallet.
In DEFI we find very interesting LP tokens staking options, where we can use our marinade Solana (mSOL), together with other cryptocurrency pairs to make staking and receive a good annual %. From my point of view, there are some very interesting staking options currently, such as MSOL-USDC with 23% approx. and 36% IF you use Orca, which uses Raydium, MSOL-SOL, which you only deposit SOL, but when you withdraw you will receive half MSOL and SOL, with 23.47% per year. This last option you can make staking of two cryptocurrencies that you will have a very small impermanent loss, since they are linked in price, and mSOL simply increases in value with respect to SOL, with a percentage much higher than the 6.21% that you receive in mSOL if you do nothing with this token.
Where to place the Marinade Solana (mSOL)
Now maybe you are wondering, what is the best option to place the mSOLs, while earning 6.21% APY. Currently we have two platforms that are farming optimizers, which are solfarm and Sunny.
In order to use them, we will make an LP token in saber. The LP token we are interested in is MSOL-SOL, and we will only place mSOL, even though it is an LP Token, you can place only one token and currently the platform will balance the LP and place 50% of each. Note that half of the tokens in your LP, when you undo it, will be SOL, so you will not be earning this 6.21%, but it is worth it for the high % you will receive on platforms like Sunny or Solfarm.
You can also place the LP token in Saber, where you have to go to create the LP, but the optimizers generate a higher annual %, as this is the main function of these platforms.
You can use both Solfarm and Sunny, both platforms you can find a very similar annual %, and you will receive rewards in the native token of the platform, in the case of Solfarm, TULIP for using their platform, and in Sunny, their native token.
If you are looking for maximum security, Solfarm has been around longer as a platform, and while this doesn’t mean it is more secure, it can provide greater security as it hasn’t had any issues so far. While Sunny is quite new as a platform.
With this, you can get more than 15% per year for staking your Solana, and have them safely in your wallet, instead of centralized exchanges, which can limit you, and you will not find any that will give you more than 15% per year consistently.
I hope this has helped you to know how Marinade Finance works and the best staking option for Solana at the moment. Remember that if you don’t have an account with binance, you can create one just below.