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Protected Staking Rewards (PSR)#

PSR is a novel protection mechanism invented by Marinade that ensures stakers receive their expected yields even when validators underperform. It functions as performance insurance backed by validator bonds.

Feature Value
Protection Type Automatic, no action needed
Bond Ratio 1 SOL per 10,000 SOL delegated
Coverage Range 50-99% uptime
Unique to Marinade (industry first)

What PSR Protects Against#

Risk Protection
Validator downtime Bond covers missed rewards
Commission changes Unexpected increases compensated
Underperformance Yield shortfalls reimbursed

How PSR Works#

graph TD
    A[Validator Performance] --> B{Meets Target?}
    B -->|Yes ≥99%| C[Normal Rewards]
    B -->|No 50-99%| D[Bond Covers Shortfall]
    B -->|No <50%| E[Marinade Covers Rest]
    D --> F[Staker Receives Full Yield]
    E --> F

Step 1: Bond Creation#

Validators receiving Marinade stake must deposit collateral into a SOL bond:

Requirement Amount
Bond ratio 1 SOL per 10,000 SOL eligible for staking
Coverage Losses between 50-99% uptime
Marinade covers Shortfalls below 50% uptime

Bond Calculation

A validator eligible to receive 1,000,000 SOL from Marinade must maintain a bond of at least 100 SOL.

Step 2: Automatic Compensation#

When underperformance occurs:

  1. System detects validator missed expected rewards
  2. Bond automatically compensates stakers
  3. SOL is distributed to cover the shortfall
  4. No action required from stakers

Step 3: Reward Consistency#

The settlement process ensures: - Projected yields match realized returns - Stakers receive expected APY regardless of individual validator issues - Protection is automatic and transparent

Coverage Tiers#

Validator Uptime Who Covers Notes
≥99% No coverage needed Normal operation
50-99% Validator bond Validator responsible
<50% Marinade + bond Shared responsibility
1% threshold Uninsured Minimum variance accepted

Bond Requirements#

Validators must maintain sufficient bond to participate in SAM and receive Marinade stake:

Coverage Type Requirement
Downtime reserve 1 SOL per 10,000 SOL delegated
Yield coverage One epoch of maximum yield obligation
Bid costs One epoch of bidding costs

See the Bond Calculator to estimate requirements.

Benefits for Stakers#

Benefit Description
Consistent yields Less variance from validator performance
Automatic protection No monitoring or action required
Risk reduction Validator issues don't impact your rewards
Peace of mind Stake with confidence

Benefits for Validators#

Benefit Description
Trust building Demonstrate commitment to stakers
Competitive edge Offer protected yields
Stake attraction PSR coverage attracts more delegations

How PSR Differs from Insurance#

Aspect PSR Traditional Insurance
Premiums Validator bonds Staker pays
Claims Automatic Manual filing
Coverage Performance-based Event-based
Settlement Same epoch Delayed

Technical Details#

Monitoring#

Marinade continuously monitors: - Validator uptime and vote success - Commission rate changes - Block production performance - Credits earned vs expected

Settlement#

When underperformance is detected:

  1. Calculate shortfall = Expected rewards - Actual rewards
  2. Deduct from bond = Min(shortfall, available bond)
  3. Distribute to stakers = Proportional to stake
  4. Log settlement = Transparent on-chain record

Bond Recovery#

Validators can: - Add to bond at any time - Withdraw excess bond (above requirements) - Exit properly to recover full bond

FAQ#

Does PSR guarantee my exact APY?

PSR protects against validator underperformance but doesn't guarantee a specific APY. Network-wide conditions (inflation rate, total stake) still affect base yields.

Do I need to do anything to get PSR protection?

No. PSR is automatic for all stake delegated through Marinade (both liquid and native staking).

What if a validator's bond is depleted?

Validators with depleted bonds are removed from SAM and their stake is rebalanced to other validators. Marinade covers remaining shortfalls.

Is PSR available on other platforms?

No. PSR is a Marinade-invented feature unique to the Solana staking market.

Resources#

Next Steps#

Action Link
Learn about SAM Stake Auction Marketplace
Become a validator Onboarding Guide
Start staking Quickstart