By Soumen DattaDeFi
Get it done in just two simple steps. As PoS protocols take center stage, staking is getting a lot of attention. A better form of staking, however, is liquid staking. Here you can find an easy step-by-step guide to liquid stake your SOL using Marinade Finance.
The Idea of Liquid Staking
In contrast to Proof-of-Work (PoW) blockchains like Bitcoin, Proof-of-Stake (PoS) blockchains do not rely on mining but economic validation.
It processes all network transactions and verifies consensus using validators. SOL holders can delegate their tokens to validators, increasing their importance in-network processing and security. The number of SOL tokens delegated proves that when a validator votes on a network consensus, it is trustworthy. In return for securing the network, you receive SOL tokens.
Staking is beneficial, but there is one issue. By staking, users will lock up their funds for a minimum amount of time. During this time, they cannot use them for any other purpose. In addition, if the price drops, the tokens will have less worth once unstaked.
However, liquid staking amplifies all the benefits of staking and eliminates its downsides. Liquid staking rewards you with liquid tokens for the tokens you stake. With these liquid tokens, you can buy, lend, and even trade them and create additional yield sources.
As a result, you don’t have to worry about the unstaking period. Instead, you can simply transfer them at any time and gain instant liquidity. In other words, liquid staking gives access to multiple sources of passive income, staked rewards, and instant liquidity.
Liquid Staking SOL using Marinade Finance
Marinade allows you to liquid stake your SOL for mSOL. You can use the mSOL further to provide liquidity and gain additional rewards. Marinade distributes the SOL that you stake among over 450 validators, except for the so-called “security group” (top 19 validators).
The following guide will walk through a two-step process to liquid stake your SOL using Marinade Finance.
Step 1: Connect Your Wallet
As a first step, you need to head over to the Marinade Finance page here. Click on the ‘Start Staking SOL’ button. This will open a new page where you can see that staking has already been selected by default.
You can connect your wallet in two ways by clicking the ‘Connect Wallet’ button, as you can see below marked in RED.
As you click on the ‘Connect Wallet’ button, multiple wallet options pop up, as shown below.
You can pick any one of the wallets. We will use Phantom in our case. As you select your wallet (Phantom in our case), you will be prompted to confirm your selection, as shown below.
Click on ‘Connect’ to connect your wallet.
Step 2: Input Amount and Approve Your Transaction.
Upon connecting your wallet, the amount of SOL in your wallet will display as Balance above the “Stake SOL” button. Enter the amount of SOL you want to stake in the box on the right, as you can see below.
You may click on the ‘Estimated results’ to see how your SOL will appreciate over time, as you can see below.
Click on the ‘Stake SOL’ button after you enter the amount. Upon doing so, your wallet will ask you to approve the transaction. Click on the ‘Approve’ button to complete the transaction.
Upon approval, a confirmation page will appear confirming that liquid staking is complete. When you stake some SOL, you will receive some Liquid tokens, as discussed earlier. Below you can see that we received some mSOL liquid tokens.
Now you can further put your liquid tokens to work. How to do that? Stay tuned as we will discuss this in the following article.
But we hope you understand how to stake your SOL using Marinade Finance easily in just two steps.
What is Marinade Finance?
Marinade. Finance is a Solana-based non-custodial liquid staking mechanism. Marinade allows you to stake your SOL tokens using automated staking algorithms in exchange for “marinated SOL” tokens (mSOL) that can be used in decentralized finance (DeFi).
Each epoch, the price of mSOL increases compared to SOL, with benefits accruing to the underlying staked SOL. You may withdraw your SOL at any moment by either unstaking and waiting for the unlock period (1-2 epochs) or paying a nominal charge instantly. Additionally, you can immediately exchange mSOL for SOL on secondary markets at the current pricing.
Where to find Marinade Finance?
Source : web3wire.news