Solana (SOL) experienced a sharp decline following the FTX events. However, with the arrival of 2023, it started to rise and has become one of the best-performing cryptocurrencies of the year with over 200% increase. It is believed that the demand for staking coins to receive staking rewards has had an impact on the price.
Solana Staking and Current Situation
According to data shared by StakingRewards.com, Solana ranks as the second-largest cryptocurrency in terms of Staking Market Value. Data from October 24th shows that there were a total of 400.05 million SOL tokens locked by validators and investors on the Solana network, equivalent to $12.72 billion.
The protocol rewards investors based on the amount of SOL they have staked in order to create a secure environment on the Solana blockchain. A similar situation exists in Bitcoin (BTC) mining or Ethereum’s (ETH) staking system. However, the inflation caused by these rewards can affect the reward rate for Solana investors. An increase in circulating supply can also impact the price of SOL.
Solana Coin Staking and Its Future
Data obtained from StakingRewards.com reveals how much reward investors receive after locking their SOL tokens in the Solana staking protocol. The figures show that the network distributed a total of $905.03 million in rewards.
Interestingly, despite the estimated annual reward rate being +7.08%, the actual reward rate adjusted for Solana’s inflation is -0.29% per year. This can be interpreted as a $30,000 stake in 1,000 SOL tokens resulting in an annual loss of $87.
This stands out as one of the worst actual reward rates for cryptocurrencies with high market value. Compared to other leading cryptocurrencies, Ethereum, for example, has an estimated actual reward rate of +3% despite offering a +3.47% ETH stake reward.
At the time of writing, 71% of Solana’s market value was staked in 772,980 crypto wallets. Additionally, the SOL staking rate increased by 69% in the last 24 hours, despite the token’s estimated reward rate.
