🎯 Direct staking

Use direct staking to maximize APY, maintain transparency, and stake with control.

The Vault on Solana is a stake pool that allows users to stake their SOL in a decentralized and transparent manner. Users have the ability to delegate their stake to a specific validator through a process called direct staking. The validator does not need to be on The Vault's approved list. This document explains how direct staking works and its impact on the pool.

How direct staking works

Direct staking follows this step-by-step process: you direct your stake to a validator, and you can add leveraged staking for a higher APY.

Directing stake to a validator

The user goes to The Vault dApp, chooses a specific validator on the Direct Stake page and sets their wallet to it by approving a transaction. In this example, Validator X. For the steps, see How to direct stake.

All vSOL in the wallet that is set to Validator X will be used, including vSOL from that wallet in a supported location such as Kamino. The stake bot ensures that specific validator will receive the amount of vSOL that was directed to it (Figure 3.12).

Flow showing a user directing a wallet in The Vault dApp to the example Validator X, with all vSOL in the direct-staked wallet used and the stake bot ensuring Validator X receives the directed amount; the validator does not need to be on the approved list.

Figure 3.12: How direct staking works

Leveraged staking and APY

When users deposit vSOL into Kamino Multiply, they borrow SOL to multiply their staking position. This functions similarly to manual leverage, where users loop: deposit SOL → get vSOL → borrow SOL → deposit borrowed SOL → get more vSOL → repeat.

This results in a higher APY for the user, as their exposure to staking rewards increases (Figure 3.13).

Flow showing users depositing vSOL into Kamino Multiply and borrowing SOL for more exposure to staking rewards and higher APY, alongside the similar manual leverage loop of depositing SOL, getting vSOL, borrowing SOL, depositing the borrowed SOL, getting more vSOL, and repeating.

Figure 3.13: How leveraged staking works

The user will be able to see the Kamino amounts on their Direct Stake dashboard once they connect their wallet. There may be a delay in between updates for this data.

Impact of direct staking

Direct staking affects the pool in two ways: validator weighting and transparency.

Increased validator weighting

Large direct stake deposits (leveraged or not) will shift the percentage of total TVL assigned to a validator. However, the Direct Stake Leaders bucket and the Elite Performance bucket still give each qualifying validator an equal share of undirected stake (Figure 3.14).

Large direct stake deposits, leveraged or not, shift the percentage of total TVL assigned to a validator, while all validators receive the same base amounts from the Direct Stake Leaders bucket and Elite Performance bucket programs.

Figure 3.14: What direct staking changes

Transparency and on-chain data

The Vault maintains full transparency regarding validator stakes. Users can track stake distribution on the Validators page and in these public repositories:

Conclusion

Direct staking in The Vault provides users with enhanced control over their stake while maintaining a fair and transparent distribution model. Through leveraged staking via Kamino Multiply, users can maximize APY, and all staking activity remains fully on-chain and auditable.