What Is a Liquid Staking Token? A Plain-English Guide for Solana Users

Staking SOL earns yield. That part is straightforward. The harder problem is that staking has traditionally meant locking your tokens, choosing a single validator, and waiting up to two days to get your SOL back if you need it. For a lot of holders, that tradeoff stopped them from staking at all.

Liquid Staking Tokens (LSTs) solve that. This guide explains how.

What Is Staking on Solana?

When you stake SOL, you’re delegating it to a validator, one of the network operators that validates transactions, produces blocks, and keeps Solana running. In exchange for that delegation, you earn a share of the staking rewards those validators generate.

Native staking has a meaningful tradeoff, though. When you stake natively, your SOL is locked with a roughly two-day unstaking period if you want it back. You’re also committing to a single validator, which means your rewards are tied to that validator’s uptime and performance. And while you’re staked, your SOL can’t be used anywhere else.

Today, over 16% of all staked SOL on the Solana network is staked through LSTs. That number has grown steadily as more holders look for a way to earn staking rewards without those constraints. 

What Is a Liquid Staking Token?

A Liquid Staking Token (LST) is a receipt token. When you deposit SOL into a liquid staking pool, the protocol stakes that SOL across a set of validators and gives you back a token representing your position. That token accrues staking rewards over time. And critically, you can use it while it earns.

How LSTs Work Mechanically

The mechanics are simpler than they sound. You deposit SOL. You receive an LST in return. The exchange rate between the LST and SOL gradually increases each epoch as staking rewards accrue into the pool. When you redeem your LST, you receive more SOL than you deposited, reflecting the rewards that accrued while you held it.

No manual claiming. No reinvesting. The compounding happens automatically, embedded in the token’s exchange rate.

What You Can Do with an LST

This is where liquid staking gets genuinely interesting. Your LST is a standard Solana token. That means it plugs into the broader DeFi ecosystem from day one.

A few common uses:

Use it as collateral. Platforms like Kamino and Loopscale let you borrow stablecoins or other assets against your LST. Your staking yield continues while your borrowed capital works elsewhere.

Trade it on DEXs. Because LSTs are standard tokens, you can swap them on Jupiter, Orca, Raydium, or any Solana DEX whenever you want. No unbonding period, no waiting for an epoch to close.

Amplify with leverage. Several platforms offer multiply strategies where you loop your LST position to amplify your staking yield. This carries liquidation risk, so it’s worth understanding before you try it. But the option exists, which it doesn’t with native staking.

Provide Liquidity. You can deposit your LST into liquidity pools on popular DEXs to earn trading fees when other users swap between the LST and other tokens. Your staking yield and liquidity fees accrue simultaneously.

Hold it anywhere and still earn. LST in cold storage earns the same as LST in an active DeFi position. The yield accrues regardless.

How LSTs Are Different from Regular Staking

Native staking on Solana has four meaningful limitations that LSTs address.

Liquidity. Native staking locks SOL with a roughly two-day unstaking period. An LST is immediately tradeable.

Capital deployment. With native staking, you choose between earning yield and using your capital. An LST eliminates that choice. You earn staking economics and retain liquidity simultaneously.

Validator concentration risk. Native staking ties your yield to the performance of a single validator. If that validator has downtime, your rewards suffer. A broadly delegated LST spreads your SOL across dozens of validators, so one validator’s bad epoch doesn’t meaningfully affect your overall return.

Tax treatment. This is jurisdiction-dependent and not tax advice. That said, some argue that, because staking rewards earned through an LST are capitalized into the token’s exchange rate rather than received as new tokens, in certain jurisdictions, that may result in long-term capital gains treatment rather than income treatment on receipt. Worth exploring with a tax advisor who understands your specific situation.

Are LSTs as safe as native staking

Generally, yes. On Solana, staking is non-custodial and there’s no slashing, which means your principal isn’t at risk in either model. The worst outcome with an LST is that a pool stops delegating, or the underlying validators charge a 100% fee, causing rewards to stop accruing. Even in that scenario, your principal and already-accrued rewards remain safe.

Most of the largest Solana LSTs are built on the SPL Stake Pool Program, an open-source smart contract first launched in 2021 and audited multiple times. It’s maintained by the Solana Foundation. The program is designed so that neither the LST operator nor any arbitrary user can withdraw SOL from the pool without redeeming the corresponding receipt token. Your SOL stays in the pool unless you choose to redeem.

Technically, an LST adds a second smart contract on top of native staking’s Stake Program. That’s a marginal increase in complexity. Given the SPL Stake Pool Program’s track record, its audit history, and its maintenance by the Foundation, it’s widely considered among the safest smart contracts on Solana. The additional layer is understood and accounted for rather than a hidden risk.

How LSTs Are Different from Each Other

LSTs vary significantly in how they delegate SOL across validators, the fees they charge and what their delegation focus is. That methodology matters more than most people realize.

Some LSTs delegate broadly to dozens or hundreds of validators based on network health and performance metrics. Others delegate narrowly, to a single validator or a small curated set. The former tends to reduce concentration risk and support network decentralization. The latter can offer more predictable commission structures or a liquid alternative to choosing a particular single validator.

The allocation methodology also determines how much the LST contributes to Solana’s overall decentralization. A pool that delegates broadly across many validators and data centers distributes stake more evenly than one that concentrates it in just one or only a handful.

For a detailed comparison of specific LSTs on Solana, see our STKESOL vs. JitoSOL vs. Marinade comparison.

What to Look for When Choosing an LST

Decentralization

How many validators does the pool delegate to? How many unique data centers? A pool that delegates broadly across many validators and data centers carries meaningfully less concentration risk than one delegating to a handful. This protects your yield and contributes to Solana network health.

APY and Fees

APY on LSTs reflects the staking rewards generated by the underlying validators, minus any protocol fee. Most LSTs charge a percentage of staking rewards as their fee rather than a flat fee on deposits. Understand what the fee is and what it covers before you commit.

Current APY figures for any LST are point-in-time and will fluctuate with network conditions, validator performance, and SOL price dynamics. Past rate growth is not indicative of future performance.

Operator Credibility and Certifications

LST infrastructure matters. The underlying stake pool program should be audited. The operator should have a verifiable track record and a transparent approach to validator selection. Institutional-grade operators typically hold certifications like SOC 1 and 2, Type 2 and ISO 27001, and publish validator performance data publicly.

What is a Receipt Token?

When you deposit SOL into a liquid staking pool, you receive a receipt token in return. That token represents a direct claim on the underlying staked SOL. The exchange rate between the receipt token and SOL increases each epoch as rewards accrue. When you redeem it, you receive your original SOL back plus everything that compounded while you held it.

There’s no separate pricing model, no counterparty taking the other side. The token’s value reflects the pool’s actual performance, nothing more and nothing less.

STKESOL is a receipt token.

What Is STKESOL?

STKESOL is SOL Strategies’ liquid staking token, launched in January 2026. When SOL holders stake through our protocol, they receive STKESOL, a receipt token representing a staked position that continues to earn accrued staking rewards. That token can be held, traded, used as collateral in DeFi applications, or deployed for additional yield opportunities, all while the underlying SOL continues earning staking rewards.

What makes STKESOL distinct is how it allocates across validators. It uses our own Stakewiz Wiz Score, a proprietary allocation methodology from stakewiz.com. The Wiz Score allocates SOL across validators based on performance, security, and decentralization metrics across more than a dozen criteria.

Disclosure: The Wiz Score and stakewiz.com are wholly owned and controlled by SOL Strategies Inc. All content and data provided through these platforms are for informational purposes only. The methodology is transparent and publicly available at stakewiz.com/faq#faq-wizscore. The Wiz Score represents a specific analytical framework and does not constitute financial or investment advice.

STKESOL is integrated in Sanctum and accessible through Jupiter, Orca, Kamino, Loopscale, and Squads, amongst others. As of April, 2026, the pool had 726,072 SOL staked across 1,322 unique holders.

For a full comparison of STKESOL against other leading Solana LSTs, see our STKESOL vs. JitoSOL vs. Marinade comparison.

Frequently Asked Questions

What is liquid staking? Liquid staking lets you earn staking rewards on your SOL without locking it up. You deposit SOL into a liquid staking pool, receive a receipt token in return, and that token earns staking yield while remaining usable, tradeable, and deployable across DeFi.

What is a liquid staking token? A liquid staking token (LST) is the receipt token you receive when you deposit SOL into a liquid staking pool. It represents your staked position and accrues staking rewards over time through an increasing exchange rate relative to SOL. LSTs are standard Solana tokens and can be used anywhere a normal token can.

How is a liquid staking token different from regular staking? Regular native staking on Solana locks your SOL for up to two days when you want to unstake, ties your yield to a single validator, and prevents you from using your staked capital for anything else. An LST maintains your staking yield while keeping your capital liquid, spreads your delegation across many validators, and lets you use your staked position in DeFi simultaneously.

What is STKESOL? STKESOL is SOL Strategies’ liquid staking token, launched in January 2026. It is a receipt token representing a staked SOL position. Staking rewards accrue into the token’s exchange rate each epoch. STKESOL can be held, traded on DEXs, used as collateral, or deployed in DeFi strategies while the underlying SOL continues earning staking rewards. SOL Strategies (NASDAQ: STKE) is a publicly traded company and the issuer of STKESOL.

What is a receipt token? A receipt token is what you receive when you deposit SOL into a liquid staking pool. It represents a direct claim on your staked position. The exchange rate between the receipt token and SOL increases each epoch as staking rewards accrue into the pool. When you redeem it, you get back your original SOL plus all rewards that compounded while you held it. STKESOL is a receipt token.

How does the Wiz Score work? The Wiz Score is a proprietary allocation methodology developed by stakewiz.com, which is wholly owned by SOL Strategies Inc. It scores validators across more than a dozen metrics covering performance, reliability, network health, and decentralization. STKESOL uses this scoring methodology to allocate SOL across its validator pool. The methodology is publicly available at stakewiz.com/faq#faq-wizscore.

Learn More

• STKESOL vs. JitoSOL vs. Marinade: Full Comparison
• Stake or mint STKESOL
• What is a Digital Asset Treasury?
• SOL Strategies Technology

 

Disclaimer

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