It is easy to assume that all liquid staking works the same way across Proof-of-Stake networks.
But, in reality, liquid staking on Solana carries a significantly different risk profile to alternatives. The gap is due to a structural difference in how assets are held, who can move them, and how withdrawals are enforced.
In this blog, we break down those differences. Let’s dive in.
How Liquid Staking Works On Ethereum And Other PoS Networks
On Ethereum and most other Proof-of-Stake networks, staking involves an element of trust.
When users stake through a liquid staking provider, their tokens are sent to the provider’s validators. In return, the provider issues a derivative token, such as stETH, which represents the user’s claim on the staked assets and accrued rewards.
This model requires users to give up direct control of their original tokens. Instead, they rely on the provider to operate validators correctly and process withdrawals when requested.
Because of this structure, risk is concentrated at the provider level. If validators are mismanaged or the provider experiences downtime, slashing events, or operational failures, users may face losses or delayed redemptions.
In practice, this makes the model custodial by nature. It depends on the provider’s infrastructure, performance, and integrity to ensure users can ultimately recover both their principal and rewards.
How Liquid Staking Works on Solana
Solana’s liquid staking model is built differently. When you stake through a Solana stake pool, your SOL is deposited directly into an onchain program governed by transparent protocol logic instead of a third-party custodian. In return, you receive an LST that acts as a receipt for your staked SOL.
Rather than handing assets to a provider, your SOL remains controlled by a permissionless stake pool program. The stake pool manager cannot access or withdraw your principal. Only the holder of the LST can initiate a withdrawal, and the process is executed automatically by the program itself.
This architecture removes the need to trust a custodian with your funds. By enforcing ownership and withdrawals through immutable, onchain rules, Solana eliminates most counterparty and custodial risks that exist in other proof-of-stake systems while allowing users to maintain control throughout the staking process.
→ The Ultimate Guide to Solana Liquid Staking 2025
A Fundamentally Different Risk Profile
While both Ethereum and Solana use Proof-of-Stake, the trust model behind liquid staking is fundamentally different.
On Ethereum and similar networks, liquid staking typically requires users to place trust in an external provider. Tokens are handed over to a third party, who manages validator operations, uptime, and withdrawals. This introduces counterparty risk, operational risk, and the possibility of delayed or impaired redemptions.
Solana removes that intermediary layer. Stake pool programs are enforced entirely onchain, with transparent, verifiable logic that governs how funds are staked, delegated, and withdrawn. There is no entity that can access or mismanage user principal, and no operator that must be trusted to process redemptions correctly.
This changes the nature of risk. Instead of trusting an organization, users trust open, auditable code. Ownership is enforced programmatically, and withdrawals can only be initiated by the holder of the liquid staking token.
In practice, this makes Solana’s liquid staking model closer to self-custody. Users maintain control of their assets throughout the staking lifecycle, protected by deterministic onchain rules rather than human discretion.
The result is a simpler and safer trust framework. Rather than trusting a counterparty, users trust the code. And in liquid staking, that distinction changes everything.