The world of decentralized finance (DeFi) has evolved rapidly since the "DeFi Summer" of 2020, when Ethereum-based protocols like Compound and Uniswap ignited a wave of innovation through liquidity mining. While Ethereum laid the foundation, its limitations—low transaction throughput and high gas fees—have made it increasingly difficult for both new and experienced users to participate meaningfully.
Enter Solana, a high-performance blockchain designed for speed, scalability, and low-cost transactions. Built on a unique technological foundation known as Proof of History (PoH), Solana supports up to 7,000 transactions per second (TPS) with block times as fast as 0.4 seconds. This makes it one of the most efficient public blockchains available today—ideal for real-time DeFi applications.
This guide will walk you through the core components of the Solana ecosystem, often referred to informally as the "SBF universe" due to the influential role played by Sam Bankman-Fried and his associated projects. We’ll focus particularly on Raydium (RAY), one of the most popular platforms for yield farming and staking on Solana.
Whether you're new to crypto or transitioning from Ethereum, this article provides a clear, step-by-step introduction to getting started with liquidity provision and staking in Solana’s thriving DeFi landscape.
👉 Discover how to start earning yield on high-speed blockchains today.
Understanding Solana’s Architecture and Performance Edge
At the heart of Solana’s breakthrough performance is Proof of History (PoH)—a cryptographic clock that sequences events before they’re recorded on-chain. Unlike traditional blockchains that rely solely on consensus to order transactions, PoH embeds time into the protocol itself. This innovation drastically reduces synchronization overhead, enabling faster confirmation times and higher throughput.
Solana operates with a layered design:
- The base layer handles simple transfers and consensus.
- The application layer manages smart contracts and complex operations like decentralized exchanges (DEXs), lending protocols, and yield farms.
One of the key enablers of Solana’s DeFi ecosystem is Serum (SRM), a decentralized exchange built specifically for speed and efficiency. Serum acts as the backbone for many Solana-based financial applications, offering order book trading directly on-chain—a rare feat in the DeFi space.
From Serum emerged a constellation of integrated projects forming what many call the SBF ecosystem, including:
- FIDA: The flagship frontend for Serum DEX; also serves as a launchpad for new token pools.
- MAPS.me: A geo-focused app integrating Solana wallets and payments, aiming to onboard millions into DeFi through everyday utility.
- OXY: An alpha-stage lending and synthetic asset platform designed to power financial services within MAPS.
- Raydium (RAY): A liquidity aggregator that connects multiple Serum frontends and enables automated market making, liquidity mining, and single-sided staking.
These interconnected tools create a robust infrastructure where speed, usability, and composability come together—making Solana an attractive alternative to congested chains like Ethereum.
Getting Started with Raydium: Liquidity Mining (Yield Farming)
Liquidity mining allows users to earn rewards by providing assets to a trading pair on a decentralized exchange. On Raydium, this process is streamlined and cost-efficient thanks to Solana’s ultra-low transaction fees.
Here’s how to begin:
Step 1: Set Up Your Wallet
Use Sollet, a browser extension and web wallet compatible with Solana. It supports hardware integration via Ledger, but always ensure your private keys are securely backed up.
Once installed, fund your wallet with at least 1 SOL to cover future transaction fees. Due to Solana’s account model, each token type requires a separate account, which must be initialized using SOL. Sending tokens to the wrong address can result in permanent loss—so double-check all transactions.
Step 2: Add Liquidity to a Pool
Navigate to Raydium.io and go to the Farm section. Select a liquidity pool—for example, the SRM/RAY trading pair.
You’ll need both tokens in equal value to add liquidity. Currently, Raydium does not support single-asset deposits (“ZAP” functions), so you may need to swap small amounts using a DEX like Orca or Step Finance first.
After depositing, you’ll receive an LP token (Liquidity Provider token), representing your share of the pool.
Step 3: Stake LP Tokens and Earn Rewards
Return to the Farm page and stake your LP tokens in the corresponding farm. Once staked, you’ll start earning RAY tokens as rewards—the current APY can exceed 150%, though yields fluctuate based on market conditions.
👉 Learn how top traders maximize returns across high-performance chains.
Important Note: Providing liquidity exposes you to impermanent loss (IL)—a temporary reduction in value caused by price divergence between the two assets in a pool. Newcomers should study IL mechanics before committing larger sums.
You can harvest rewards daily; given minimal gas costs, frequent claiming is practical and encouraged.
Raydium Staking: Earn Without Liquidity Risk
If you prefer to avoid impermanent loss altogether, Raydium offers single-sided staking through its Stake portal.
Simply navigate to the Single Stake section, connect your wallet, and deposit RAY tokens. There’s no need to pair assets or manage LP tokens.
As of now, annual percentage yields (APY) for staking RAY remain competitive—often above 120%—with rewards paid out in additional RAY tokens. These earnings are funded by platform transaction fees, giving stakers long-term alignment with Raydium’s growth.
Keep in mind: After staking, your balance might not update immediately due to frontend lag. Solana’s chain processes transactions faster than some interfaces can render them—so wait a few moments or refresh your wallet connection if needed.
For tracking your positions across multiple protocols, consider using Step Finance, a portfolio dashboard that integrates seamlessly with Sollet and displays your holdings, yields, and historical performance across Solana DeFi.
Frequently Asked Questions (FAQ)
Q: Is Solana safer than Ethereum for DeFi activities?
A: Solana uses a different consensus mechanism and has fewer smart contract audits compared to Ethereum. While its speed is impressive, users should exercise caution and start with small amounts when interacting with new protocols.
Q: Can I lose money yield farming on Raydium?
A: Yes. Risks include impermanent loss, smart contract vulnerabilities, and token volatility. Always do your own research and never invest more than you can afford to lose.
Q: Do I need a lot of money to start?
A: No. Thanks to low fees on Solana, even $100 can allow meaningful participation in liquidity pools or staking.
Q: Why is it called the “SBF universe”?
A: The term refers to the network of projects linked to Sam Bankman-Fried (SBF), including FTX, Alameda Research, Serum, and Raydium. Though SBF's influence has diminished, the technical infrastructure remains active and widely used.
Q: What happens if I send a token to the wrong address on Solana?
A: Funds are likely lost permanently. Unlike Ethereum’s single-address model, Solana uses separate accounts for each token type—so accuracy is critical.
Q: How often should I claim my farming rewards?
A: You can claim daily without significant cost due to low gas fees. Frequent harvesting helps compound returns over time.
With its blazing speed and growing ecosystem, Solana presents a compelling alternative for those seeking accessible, high-performance DeFi experiences. Platforms like Raydium make it easy to earn yields through liquidity mining or low-risk staking—ideal for beginners and seasoned users alike.
As always, proceed with caution: verify addresses, test with small amounts first, and stay informed about market dynamics.
👉 Start exploring high-yield opportunities on next-gen blockchains now.