Staking BTC, ETH, and SOL – How to Earn Without Selling

Staking has become one of the most popular ways to earn passive income in crypto, enabling long-term holders to generate yield without selling their assets. While Ethereum (ETH) and Solana (SOL) have built-in staking mechanisms due to their proof-of-stake (PoS) consensus models, Bitcoin (BTC), which runs on proof-of-work (PoW), has traditionally lacked native staking opportunities. However, with new innovations such as Wrapped BTC, the Lightning Network, and Runes, BTC holders can now participate in DeFi staking in ways that were previously unavailable. Understanding the staking landscape for each of these assets allows investors to maximize returns while maintaining exposure to their holdings.

BTC: Runes, Wrapped BTC Staking, and Lightning Network Strategies

Bitcoin, as the first and most decentralized cryptocurrency, does not support traditional staking due to its reliance on proof-of-work. However, recent advancements have introduced alternative staking-like mechanisms for BTC holders.

One such method is Wrapped BTC (WBTC), an ERC-20 token that represents Bitcoin on the Ethereum blockchain. By converting BTC into WBTC, users can participate in DeFi staking on Ethereum-based platforms like Aave, Curve, and Compound. This allows BTC holders to earn interest and liquidity rewards, providing passive income opportunities similar to traditional staking.

Another emerging strategy is Runes, a protocol that introduces fungible token functionality on the Bitcoin network. Though still in its infancy, Runes may pave the way for new BTC staking models that integrate natively with Bitcoin’s infrastructure.

Additionally, the Lightning Network enables BTC holders to earn fees by acting as liquidity providers. By opening payment channels and facilitating fast, low-cost transactions, Lightning Network participants can generate yield from transaction fees without converting their BTC into other assets.

ETH: ETH Staking and Liquid Staking Solutions (Lido, Rocket Pool)

Ethereum’s transition to proof-of-stake (PoS) with Ethereum 2.0 has made staking ETH one of the most attractive ways to earn passive income. ETH staking involves locking up tokens to support network security and validate transactions, with rewards distributed to participants based on their contributions.

The primary way to stake ETH is by running a validator node, which requires a minimum of 32 ETH. While this option offers the highest rewards and direct participation in network governance, it also involves technical expertise and infrastructure setup.

For those unable to meet the 32 ETH requirement, liquid staking solutions like Lido and Rocket Pool provide an accessible alternative. These platforms allow users to stake any amount of ETH while receiving liquid staking tokens—stETH (Lido) and rETH (Rocket Pool)—that can be used in DeFi for additional yield opportunities. Liquid staking enables users to retain liquidity while earning staking rewards, making it a flexible and capital-efficient option.

SOL: Solana Staking Advantages and Top Validators

Solana (SOL) operates on a proof-of-history (PoH) and proof-of-stake (PoS) hybrid model, allowing users to stake their SOL to earn rewards while securing the network. Unlike Ethereum, Solana’s staking process is highly scalable, offering fast transactions and low fees.

Staking SOL is straightforward and does not require a high minimum balance. Users can delegate their SOL to validators through wallets like Phantom and Solflare, earning rewards without needing to operate their own validator node.

Validators play a critical role in Solana’s ecosystem, and choosing a reliable validator with high uptime and low commission fees ensures maximum staking rewards. Some of the most reputable validators include Everstake, Marinade Finance, and SolFlare, each offering secure and competitive staking options.

Solana also offers liquid staking through Marinade, allowing users to stake SOL and receive mSOL, which can be used in DeFi applications while still earning staking rewards.

Providing Liquidity for BTC, ETH, and SOL

Beyond staking, another lucrative way to earn passive income is liquidity provision. By supplying assets to decentralized exchanges (DEXs), users can earn rewards from trading fees and liquidity incentives. However, this strategy comes with impermanent loss risks, making it essential to choose the right assets and platforms.

How Liquidity Pools Generate Earnings

Liquidity pools are the foundation of automated market makers (AMMs), the primary mechanism behind decentralized exchanges like Uniswap, Curve, and Raydium. Instead of relying on traditional order books, AMMs allow users to trade directly against a pool of assets supplied by liquidity providers (LPs). In return, LPs earn a percentage of the trading fees generated within the pool.

BTC, ETH, and SOL can be provided as liquidity on various cross-chain DEXs, enabling users to earn passive income without selling their assets. Wrapped BTC (WBTC) is commonly used for liquidity provision on Ethereum-based protocols, while ETH and SOL have deep liquidity pools on native and multi-chain platforms.

Best DeFi Platforms for BTC, ETH, and SOL Liquidity Provision

Choosing the right DeFi platform is crucial for optimizing liquidity provision earnings. Each protocol has different fee structures, incentives, and impermanent loss protection mechanisms.

• Uniswap (Ethereum, Polygon, Arbitrum) – Best for ETH-based liquidity pairs with high trading volume.
• Curve Finance (Ethereum, Avalanche, Fantom) – Ideal for stablecoin liquidity and WBTC-ETH pools.
• Raydium (Solana) – The go-to platform for SOL liquidity provision, offering deep liquidity and low transaction fees.
• Balancer (Ethereum, Polygon, Optimism) – Suitable for custom-weighted pools that allow diverse asset allocation.

Understanding Impermanent Loss and Mitigating Its Impact

Impermanent loss occurs when the price of assets in a liquidity pool fluctuates significantly, leading to unrealized losses compared to simply holding the assets. This risk is particularly relevant for volatile crypto pairs like BTC/ETH or SOL/USDC.

To mitigate impermanent loss:

• Use stablecoin pools: Liquidity pairs like WBTC/DAI or ETH/USDC reduce volatility risks.
• Choose high-fee pools: Pools with higher trading fees help offset impermanent loss by increasing earned revenue.
• Utilize liquidity mining incentives: Platforms like Curve and Balancer offer governance token rewards that can counteract impermanent loss.