Comparing Proof-of-stake Mechanisms: Solana vs other top L1 blockchains

By Jack the Pine of Pine Analytics, winner of Marinade’s Solana Scribes Hackathon bounty

The essence of Proof of Stake (PoS) contrasts sharply with the Proof of Work (PoW) mechanisms employed by blockchains like Bitcoin, where mining is essential for earning block rewards. In PoS blockchains, the process of staking plays a central role. Here, the likelihood of validating a block and earning its rewards is directly linked to the number of tokens — such as ETH or SOL — that participants have committed to the protocol. This staking mechanism enables token holders to generate income by securing the network through rewards.

Numerous PoS networks exist, each adopting unique parameters to tailor how staking is implemented, optimizing for various objectives. Let’s explore some of the parameters utilized by leading PoS networks and how they diverge.

Delegation of stake

Delegation permits individuals who do not operate a validator node, but who possess tokens, to allocate their tokens to a validator. This increases the validator’s chances of validating a block and receiving its rewards. In exchange for their delegation, delegates earn a share of the rewards proportional to their staked tokens, after deducting any commission claimed by the validator. Notably, most major PoS networks, with the exception of Ethereum, support delegation.

Slashing stake

When validators misbehave by double signing, are frequently offline, or engage in other behaviors deemed unacceptable by the network, they can lose some or all of the tokens staked to them. Additionally, individuals who delegate to such validators risk losing their tokens as well. Each blockchain sets different rules regarding behaviors that warrant slashing, the enforcement of slashing, and the extent of token loss for offending validators. Strict slashing parameters ensure network security by heavily penalizing misbehavior, thereby fostering a reliable blockchain environment. Conversely, lenient parameters can boost participation by mitigating the fear of penalties for minor mistakes, though they risk undermining security if validators believe they can act without significant consequences.

Unbonding

All PoS networks implement restrictions on how validators or delegators can withdraw their staked tokens. These restrictions are in place to deter rapid withdrawals that could destabilize the network and to ensure that staked tokens remain available for slashing in the event malicious actions are detected. Typically, these restrictions include a mandatory waiting period during which the individual who staked must wait before receiving their tokens back. However, some networks, such as Ethereum, impose limits on the number of withdrawals per block rather than having an unbonding period.

Staking Models Across Major Blockchains

Solana

Staking on Solana introduces an accessible and flexible approach for both validators and delegators, characterized by its lack of a minimum SOL requirement for participation. Unique to Solana are stake accounts, designed to hold, manage, and delegate SOL for staking purposes, distinct from regular wallet accounts. One useful feature in Solana’s staking architecture is that stake accounts are designed with separate permissions, enabling distinct control over delegation management and fund withdrawal. platforms like Marinade Native, which automate the staking process without relying on smart contracts, use these separate permissions to provide users a secure way to achieve optimal returns and risk mitigation while retaining full custody of their SOL.

Solana’s documentation suggests a manual slashing mechanism to enhance network security. Yet, as it stands, such a mechanism hasn’t been integrated into Solana’s codebase. This highlights a more lenient security posture in practice, despite the theoretical robustness of manual slashing to deter malicious validator behavior. Additionally, Solana features a notably short unbonding period of one epoch (2–3 days), striking an effective balance between safeguarding network integrity and offering users flexibility. This approach, coupled with the platform’s user-friendly staking process — supported by most wallets for easy stake account setup, SOL depositing, and delegation — underscores Solana’s commitment to making staking accessible and convenient, thereby enhancing the overall user experience in staking.

Ethereum

To qualify as a validator within the Ethereum ecosystem, one must commit a minimum stake of 32 ETH, a requirement aimed at ensuring validators are heavily invested in the network’s well-being. For those unable to meet this substantial threshold, Ethereum offers an alternative through Liquid Staking Tokens (LSTs), such as Lido’s stETH or Rocket Pool’s rETH. These innovative solutions allow individuals to pool smaller amounts of ETH, effectively participating in the staking process by delegating their assets to validators overseen by these platforms. In exchange, participants receive LSTs, which reflect their contributed ETH and any rewards earned, thereby broadening the accessibility of staking rewards on Ethereum. However, this method introduces the complexity of dealing with smart contracts, which, despite rigorous audits, are susceptible to vulnerabilities that pose risks not encountered with direct staking methods.

The process for withdrawing staked ETH on Ethereum also distinguishes itself from other blockchains, particularly in its approach to handling withdrawal transactions. Ethereum limits the processing of withdrawals to 16 per block, resulting in variable waiting times for unstaking ETH based on the backlog of validators in the queue. Furthermore, Ethereum implements a stringent penalty system for behaviors detrimental to network integrity, such as double voting or the issuance of conflicting blocks within the same slot. These measures include slashing a portion of the staked ETH of violators, with penalties escalating in severity based on the collective misconduct of validators within a given timeframe, ensuring a robust framework to maintain network security and validator accountability.

Avalanche

Avalanche offers a distinctive staking experience by setting a minimum requirement of 2,500 AVAX for validators, while also allowing users to delegate their stake to a validator with a minimum of just 25 AVAX. This inclusive approach enables a broader range of participants to contribute to network security without the necessity of operating a validator node. When staking AVAX, users commit to a lock-up period that can range from 14 to 365 days, during which they cannot withdraw their tokens early. This commitment mechanism not only secures the network by ensuring a stable supply of staked tokens but also aligns with users’ interest in maximizing their staking rewards, which increase with the length of the lock-up period. The introduction of Liquid Staking Tokens on Avalanche further enhances this model by offering users the flexibility to access liquidity without sacrificing the benefits of longer-term staking rewards.

Avalanche’s staking model has an absence of slashing for validator downtime or incorrect validations, diverging from the punitive measures seen in other PoS blockchains. Instead of penalizing validators through slashing, Avalanche adopts a reward-based incentive system where validators must be online and responsive for more than 80% of their validation period to receive rewards. This approach encourages validators to maintain high performance while minimizing the risk of losing staked assets due to minor infractions. Additionally, Avalanche requires careful planning from stakers, as the initial investment exceeds $1,000, and the chosen lock-up period is final, with no option for early withdrawal. The lack of automatic compounding of staking rewards necessitates a strategic assessment of staking frequency to optimize returns, highlighting the need for active management in Avalanche’s staking ecosystem.

Cosmos

To join the Cosmos’ active validator set, individuals must amass enough ATOM to be among the top 180 validators by stake, a competitive process that ensures only the most committed participants secure a validator position. However, Cosmos lowers the barrier to network participation for ATOM holders by allowing them to delegate their tokens to any validator in the active set, without imposing a minimum delegation amount. This flexibility fosters broader community involvement in network security and consensus, making it straightforward for users to contribute to the ecosystem’s strength.

Moreover, Cosmos implements strict measures to maintain network integrity, including slashing of up to 5% for validators who engage in serious infractions like double signing a block. This is coupled with the possibility of being “jailed” for detrimental behavior, emphasizing the network’s zero-tolerance policy towards actions that could compromise security. Validators and delegates must also navigate the 21-day unbonding period, a waiting time designed to stabilize the network’s staking dynamics. During this period, staked ATOMs do not earn rewards, underscoring the importance of commitment when participating in Cosmos staking. This blend of inclusivity, security measures, and the unbonding period encapsulates Cosmos’ approach to creating a secure, participatory blockchain ecosystem.

Sui

Joining the Sui Validator set necessitates the accumulation of at least 30 million SUI in one’s staking pool, setting a high bar for entry but ensuring that validators are significantly invested in the network’s success. Once admitted, validators are required to maintain a minimum of 20 million SUI staked to stay active within the network. With over 100 validators currently active on the Sui network, this framework cultivates a competitive yet inclusive atmosphere, encouraging broad participation in enhancing the network’s infrastructure. This participation can take the form of operating a validator node directly or supporting the network’s security indirectly through delegation. Furthermore, Sui differentiates itself with a remarkably fast 1-day withdrawal period for staked tokens, a feature that significantly enhances liquidity compared to the longer lock-up periods often seen in other blockchain networks.

The Sui network also implements a unique slashing system through the Tallying Rule, a mechanism designed to promote community involvement in monitoring and ensuring the integrity of its validator set. Validators are tasked with assessing each other’s performance and commitment to the network’s best interests, fostering a culture of accountability and mutual oversight. This approach not only serves as a deterrent against negligence or misconduct but also encourages a collaborative effort to uphold high standards of operation across the board. Validators receiving low scores from their peers are subject to slashed stake rewards, a measure that underscores the importance of maintaining exemplary performance within the Sui ecosystem.

Comparing Staking Models: Solana in Focus

Solana presents a uniquely accessible and flexible approach, setting it apart from Ethereum, Avalanche, Cosmos, and Sui. Each blockchain has developed its staking mechanisms with distinct features aimed at enhancing network security, user participation, and reward optimization. However, when juxtaposed with Solana’s staking model, several differences become evident, emphasizing the platform’s commitment to lowering entry barriers and streamlining the staking process for its users.

Technological and Operational Considerations: Solana’s staking model, enhanced by its integration with platforms such as Marinade Native, simplifies and optimizes the staking process by utilizing stake accounts with separate permissions. This streamlined approach stands in stark contrast to the complexities and inherent risks tied to Ethereum and Avalanche’s reliance on Liquid Staking Tokens (LSTs) and smart contracts. These contracts are pivotal for users seeking staking exposure on these blockchains, introducing a layer of technicality and potential vulnerability not present in Solana’s more user-friendly system. This distinction underscores the varied landscape of staking opportunities across blockchains, where Solana offers a more accessible and potentially less risky avenue for users aiming to maximize their staking rewards.

Entry Threshold: Solana sets itself apart in the blockchain space with its notably accessible validator requirements, contrasting sharply with the substantial entry barriers seen on platforms like Ethereum, which demands a 32 ETH stake, and Avalanche, with a 2,500 AVAX minimum for validators. Similarly, Cosmos introduces a competitive edge, requiring validators to secure a spot among the top 180 by stake to be active, while Sui sets a high bar with a requirement for validators to accumulate at least 30 million SUI. This divergence highlights Solana’s unique position in democratizing network participation, as it does not impose a minimum SOL holding to become a validator, thereby lowering the threshold for participation and fostering a more inclusive ecosystem for network security and consensus processes.

Security and Incentive Mechanisms: Solana currently employs a manual approach to enforce network integrity, notably without activating its slashing mechanism. In contrast, blockchains such as Ethereum and Cosmos adopt automatic slashing to penalize validator misconduct, applying a range of penalties based on the severity of violations. Meanwhile, Avalanche aligns more closely with Solana’s current stance by prioritizing a reward-based system over slashing. This approach obliges validators to achieve high-performance standards without the imminent threat of asset forfeiture. Additionally, Sui introduces a unique, community-driven Tallying Rule, enhancing blockchain security through a system of peer assessment and promoting a culture of mutual accountability.

Unbonding Period: Solana’s staking model features a notably short unbonding period of just one epoch (2–3 days), sharply contrasting with the longer lock-up periods on blockchains like Avalanche, with 14 to 365 days, and Cosmos’s 21-day requirement. This focus on liquidity and convenience is further highlighted when compared to Sui’s rapid 1-day withdrawal period, positioning Solana as a platform offering greater flexibility for users to access their assets swiftly, albeit slightly longer than Sui’s almost immediate unlock.

Final thoughts

In the landscape of blockchain staking mechanisms, Solana sets itself apart with its emphasis on accessibility and streamlined participation, contrasting with the more complex and restrictive models of Ethereum, Avalanche, and others. Unlike Ethereum’s high entry barriers and Avalanche’s Inflexible token locks, Solana facilitates ease of entry without a minimum staking requirement and adopts a lenient approach by not implementing a slashing mechanism. This strategy not only simplifies the staking process but also encourages wider participation by reducing the risk and complexity often associated with staking on other platforms. While Sui also offers distinctive features, Solana’s combination of a short unbonding period and user-friendly staking options positions it as a uniquely attractive choice for users seeking to engage with blockchain ecosystems without the deterrents of high thresholds and severe penalties.

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