Solana Staking: Risks and How to Reduce Them (2026)

Staking SOL is one of the most straightforward and low risk ways to earn yield on Solana.

But, while being low risk, staking isn’t entirely risk free. In this guide, we’l breaks down the risks of staking and liquid staking and covers how to reduce your risk exposure.

There are two main types of staking on Solana. Native staking and liquid staking.

Native staking means delegating SOL to a validator directly. Your tokens stay in your wallet and the validator gets voting weight from your token. The validator never takes ownership or control of your SOL. Rewards accrue each epoch (roughly every 2 to 3 days), and unstaking requires a cooldown before SOL becomes liquid again.

Liquid staking wraps that your SOL into a transferable token called a liquid staking token (LST) that represents a staked position. The liquid staking token uses the SOL that you stake to them to stake to validators in turn. You hold an LST like INF, jupSOL, or any number of validator-specific tokens, and the underlying SOL earns staking rewards while you retain the ability to trade, transfer, or use the LST elsewhere. Fees are slightly higher than native staking because a stake pool program manages delegation and rebalancing.

Native staking is the simplest path for staking. You delegate your tokens, earn rewards, and retain custody. The main risks for native staking are as follows:

Staking yield does not hedge SOL price drops. If SOL prices fall, then your staked SOL falls as well. While market risk is expected when holding cryptocurrency, staking can amplify exposure because your SOL is locked or subject to a cooldown, limiting your ability to sell quickly and reduce downside risk.

Your staking rewards depend on the validator you delegate your SOL to. If a validator goes offline, misses votes, or runs poorly maintained infrastructure, your stake earns less.

Many staking interfaces abstract away validator selection, but it’s important to note that not all validators are created equal and validator selection can drive the returns that you see from your SOL.

Validators can raise its commission rate between epochs, and unless you're monitoring, you may not notice the reduction in your effective yield.

Native unstaking on Solana requires a 2 to 3 day cooldown period. During that window, your SOL is neither earning rewards nor available to trade. If volatility spikes and you need to exit a position or rebalance, the cooldown can force you to wait while the market moves.

There's also a network-level cap: only 25% of total staked SOL can be deactivated in any single epoch. In a mass unstaking event, you could face delays beyond the standard cooldown.

For users who treat staked SOL as a long-term hold, the cooldown is a minor inconvenience. For anyone who might need fast access to capital, it is a real constraint worth planning around.

Staking does not change the baseline security requirements of holding SOL. Phishing attacks, compromised private keys, and accidentally sending SOL to wrong addresses remain the most common ways people lose funds. Signing a malicious transaction that modifies your stake authority can also redirect your staking rewards or deactivate your stake.

Takeaway: Native staking risk is mostly about validator selection and exit timing.

Liquid staking eliminates the exit timing risks by turning your SOL into a liquid wrapper on staked tokens (i.e., a tradable receipt representative of your stake) rather than staking them directly. Liquid staking tokens also select the underlying validator set allowing for more diversification in validators and reducing validator concentration risk.

While liquid staking mitigates some of the risks of native staking, it does come with it’s own set of risks and some of the same risks as native staking.

Every LST is managed by a stake pool program deployed on-chain. If that program has a bug, a vulnerability, or an exploitable edge case, staked SOL in the pool could be at risk. Solana's stake pool programs are very well-audited making them quite low risk compared to other smart contracts, but "audited" does not mean totally "risk-free."

Many stake pool programs retain an upgrade authority, meaning the code can be changed after deployment. A compromised upgrade authority or a poorly reviewed upgrade could introduce new vulnerabilities. Leading LSTs like INF, dSOL, and JupSOL, however, have robust governance structures that help insulate them against issues.

An LST should, in theory, always be redeemable for its underlying SOL (plus accrued rewards). In practice, the market price of an LST on a DEX can deviate when there is thin liquidity or a run on the token.

The October 2025 market crash showed liquidity risks in practice. A $19.5 billion liquidation cascade across crypto markets causing several LSTs to temporarily lose their pegs as holders rushed to sell with few buyers. Since there were more sellers than buyers, some LSTs traded below the value of the tokens that they held. This means that sellers were effectively selling dollars for 90 cents because they wanted to leave their position.

During this crash, Sanctum's INF pool played a key stabilizing role. Every epoch, INF strategically unstakes a portion of its holdings to maintain a reserve of liquid SOL. When demand for unstaked SOL spiked during the October liquidations, INF absorbed much of that selling pressure by providing SOL liquidity from its reserve to meet withdrawals, helping prevent deeper LST depegs across the ecosystem. The swap fees generated by that activity flowed back to INF holders, producing a 26.12% epoch return for INF during one of the worst market days in crypto’s history.

While depeg and liquidity risks are still worth considering for stakers, Sanctum Infinity helps lower this risk while benefiting with an increased return.

The depth of available liquidity still determines how severe any depeg gets. A well-supported LST with access to deep shared pools might trade within a fraction of a percent of its fair value. A smaller LST with limited DEX liquidity and no connection to a shared liquidity layer can see much wider spreads, especially during volatile periods.

While LSTs reduce validator risk by often diversifying the validators they allocate to, rewards are still driven by allocating to validators. Diversifying the risks helps reduce it in the aggregate compare to native staking, but validator risk is still present for LSTs.

Takeaway: LSTs mitigate some risks of native staking like exit timing risk and validator concentration risk while introducing new smart contract, governance, and liquidity risks. While these risks are mitigated to the best of their abilities with audits, strong governance structures, and liquidity pools like INF, they are structurally unavoidable.

Staking rewards on Solana come primarily from newly minted SOL. The network launched with 8% annual inflation, decreasing 15% per year until it reaches a terminal rate of 1.5%. As of early 2026, annual inflation sits around 4.5%.

That built-in decline means yields will keep falling over time in SOL terms. What's 5-7% APY today will eventually be lower.

Solana governance proposals can accelerate the timeline. SIMD-228, which would have replaced the fixed inflation schedule with a dynamic model tied to staking participation, narrowly failed in early 2025 with 61% support (66% was required to pass). A newer proposal, SIMD-0411, which suggests doubling the disinflation rate from -15% to -30% annually, has not passed as of May 2026. If approved in the future, staking yields would compress faster than the current schedule.

Protocol-level changes also affect yields beyond base inflation. SIMD-207 and SIMD-256 increased Solana’s block size in Q2–Q3 2025, which reduced competition for block space and compressed the MEV and priority fee revenue that boosts LST yields above base staking rates. Every LST on Solana saw yield compression through late 2025 as a result.

None of this means staking stops being worthwhile. It means building a strategy around the assumption that current APY numbers hold forever will lead to disappointment. Factor in potential declining yields when you're modeling returns over a multi-year horizon.

How staking rewards are taxed is still an evolving question in most jurisdictions. In the United States, the IRS has been reconsidering whether staking rewards should be classified as income at the moment of receipt or treated differently. Some jurisdictions may require reporting staking rewards as income even if you haven't sold any tokens, which creates a scenario where you owe taxes on rewards that may have dropped in dollar value since you earned them.

Most of the risks covered in this guide come back to the problem of fragmented liquidity. Each LST has its own DEX pools, its own depth, and its own exit path. When markets get volatile, that fragmentation turns into real cost for stakers trying to get out.

Sanctum connects those fragmented pools into a shared liquidity layer. When you swap one LST for another or convert back to SOL, Sanctum routes your trade through its reserve pool and the Infinity pool (INF) instead of relying on a single LST's standalone DEX pair. You get deeper liquidity and tighter execution than any individual LST could offer on its own.

This has a direct benefit for long-tail LSTs. Solana has over a thousand branded LSTs, many tied to individual validators or smaller projects. Without shared liquidity, those tokens would have dangerously thin DEX pools and wide spreads. Sanctum gives them access to the same liquidity layer that the largest LSTs use, making it safer for you to hold smaller validator-specific tokens if you want to support independent operators.

INF makes this work as a positive-sum system. INF holds a diversified basket of LSTs and maintains a reserve of unstaked SOL. That reserve provides the liquidity that other LSTs draw on for swaps and exits. In return, INF holders earn the staking rewards from the underlying basket plus the trading fees generated every time someone swaps through the pool. The more LSTs that use Sanctum's liquidity, the more swap volume flows through INF, and the better INF performs for its holders. At the same time, every LST in the ecosystem gets access to deeper exit liquidity. Overall, this means INF’s continued growth is good for INF holders and good for every other LST on Solana. Everyone wins!

Staking SOL is one of the lowest risk ways to earn yield on Solana, but the risks vary depending on how you stake. Native staking is simpler but locks your SOL for 2 to 3 days and concentrates your rewards on a single validator. Liquid staking removes those constraints but introduces smart contract, governance, and liquidity risks. Both carry market risk and exposure to declining yields as Solana's inflation schedule continues to compress.

The biggest practical risk most stakers underestimate is exit liquidity. How easily can you get out when you need to? Sanctum's shared liquidity layer and INF are designed to make that exit faster, cheaper, and more reliable across the entire LST ecosystem. If you're staking SOL or considering it, explore how Sanctum works and see how INF fits into your strategy.

Can I lose SOL by staking?

With native staking, your principal is not at risk. Solana has no active slashing implementation today, though the capability exists in the protocol and could be activated by a future governance vote. The realistic loss paths are wallet compromise, signing a malicious transaction that changes your stake authority, or (for liquid staking and DeFi) smart contract exploits or liquidation events.

How long does it take to unstake SOL?

Native unstaking takes approximately 2 to 3 days, aligned with Solana's epoch timing. With liquid staking, you can sell the LST on a DEX or swap through a liquidity layer like Sanctum for near-instant exit, subject to available liquidity.

Is liquid staking riskier than native staking?

Yes, because it adds smart contract risk, depeg risk, and (if used in DeFi) composability risk on top of the baseline native staking risks. The tradeoff is flexibility: liquid staking gives you a tradeable, composable token instead of a locked stake account.

What should I check before choosing a validator?

Look at uptime and vote success rate, commission rate and its history, total stake concentration (to avoid over-concentrated validators), and whether the operator publishes infrastructure details. Any reputable Solana staking dashboard will surface these metrics.

What is depeg risk for LSTs?

Depeg risk is the chance that an LST trades below the value of the SOL it represents. It happens when liquidity is thin, redemption is slow, or selling pressure spikes. During the October 2025 crash, several LSTs temporarily lost their pegs as $19.5 billion in liquidations hit the market. Sanctum's INF pool helped stabilize prices by providing SOL liquidity from its reserve to meet withdrawal demand, earning a 26.12% epoch return from swap fees in the process.

Will staking yields keep dropping?

Solana's inflation schedule is designed to decrease over time, and governance proposals like SIMD-0411 could accelerate that decline. Protocol changes that affect block space competition (like SIMD-207 and SIMD-256) also compress the MEV and priority fee revenue that LSTs capture. Yields will fluctuate, but the long-term trend is downward from current levels.