# Protected Staking Rewards Marinade's validator protection system has three distinct components: * **Protected Staking Rewards (PSR):** The overarching framework ensuring stakers are compensated when validators underperform. * **Bonds:** Collateral posted by validators. SOL deposited into a bond account stays delegated to that validator and covers any compensation owed to stakers. * **Stake Auction Market (SAM):** A separate system that determines how Marinade allocates stake across validators based on bids. SAM participation requires a bond, but SAM and PSR serve different purposes: SAM is about stake allocation, PSR is about protecting staker yield. *** Marinade introduced Protected Staking Rewards to its delegation strategy in April, 2024. PSR serves as performance protection for Marinade stakers by covering the balance of any unexpected underperformance of a validator in the the stake pool. This is done through an on-chain bond created by Marinade and each validator in the pool. By implementing PSR, Marinade can fulfill its mission to decentralize Solana as best as possible by staking to more validators in the cluster without affecting the performance for stakers. ### **How Protected Staking Rewards work** PSR uses an on-chain program to cover staker losses caused by two specific validator events: **LowCredits** (extended downtime causing missed rewards) and **CommissionIncrease** (a validator raising their commission mid-epoch). When either occurs, the validator's bond is used to compensate stakers for the shortfall. Note: Solana does not have a slashing mechanism yet. PSR is a bond-funded compensation system, not a penalty. Validators retain full control of their bond and it remains delegated to them at all times. **PSR Coverage Allocation:** * **Validator’s Responsibility**: Validators cover **100% of the rewards lost when their uptime falls between 50% and 99%**. * **Marinade’s Coverage**: Marinade covers the lost rewards corresponding to the **lower 50% of uptime**. * **1% Grace Period**: The first 1% of validator downtime and the first 1 percentage point commission increase are ignored. {% hint style="info" %} **Example: PSR Coverage Adjustments** * **Scenario 1**: Validator's uptime is 99.5% during an epoch. * **Validator's Responsibility**: No action is required as the downtime is within the 1% grace period. * **Marinade's Coverage**: None. * **Scenario 2**: Validator's uptime is 90% during an epoch. * **Validator's Responsibility**: Validator covers the lost rewards corresponding to the upper 50% of uptime, which is 9%. * **Marinade's Coverage**: None, as the validator's uptime is above 50%. * **Scenario 3**: Validator's uptime is 40% during an epoch. * **Validator's Responsibility**: Validator covers the lost rewards corresponding to the upper 50% of uptime, which is 49% of the total amount of expected rewards in the epoch. * **Marinade's Coverage**: Marinade covers the lost rewards corresponding to the lower 50% of uptime, which is 10% of the total amount of expected rewards in the epoch. {% endhint %} ### **Setup for Validators** Validators can set up and fund their bond by following the CLI instructions in the Github: [Funding Bond Account](https://github.com/marinade-finance/validator-bonds/tree/main/packages/validator-bonds-cli#funding-bond-account). **Audit**: The bond program was audited by Neodyme and can be viewed here: [Audit Report](https://docs.marinade.finance/marinade-protocol/security/audits#audit-reports-1). {% hint style="info" %} ### **Track PSR events** Each epoch, Marinade posts the results of PSR in Discord. You can see which validators fell below the performance threshold and will have SOL removed from their bond. Visit Discord and view the [**#psr-feed**](https://discord.com/channels/823564092379627520/1223330302890348754) channel for details. Or view epoch-by-epoch reports in this Google Cloud link: [PSR Reports](https://console.cloud.google.com/storage/browser/marinade-validator-bonds-mainnet/). \ \ View each validator's current bond amount and validator stake here: [PSR Dashboard](https://psr.marinade.finance/). {% endhint %} ### **Validator FAQ for PSR bonds** **Q: I am a validator. Can I receive stake from Marinade?** Yes! You can refer to our [Stake Auction Market](https://docs.marinade.finance/marinade-protocol/protocol-overview/stake-auction-market) to see how we delegate to validators. **Q: How much SOL do I have to supply for my bond?** The more SOL that is supplied, the more stake you will be eligible for from Marinade. **Q: What happens if my validator bond is not funded?** If your validator bond is not funded, your validator will lose eligibility for Marinade stake. Stake will be redistributed away from your validator over subsequent epochs. Under normal conditions, roughly **0.7% of total TVL** is redistributed per epoch, so unstaking from unfunded validators happens gradually. However, if multiple validators lose eligibility at once due to expired bonds, auction exits, or other eligibility failures, redelegation can temporarily accelerate well beyond this baseline, redistributing stake much faster than usual. To avoid losing stake, ensure your bond remains funded at all times. **Q: Are funded bonds required for enhanced stake?** Yes, validators must set up a bond to participate in the Stake Auction Marketplace (SAM) and be eligible for SAM stake allocations. **Q: Is there a deadline to create and fund a bond?** You can fund the bond anytime but as of Epoch 608 you will not be eligible for Marinade stake if you have not yet supplied a bond. Full Detailed instructions can be viewed on [GitHub](https://github.com/marinade-finance/validator-bonds/tree/main/packages/validator-bonds-cli#funding-bond-account). **Q: Will the stake account in my bond be redelegated to other validators?** No, the stake accounts in your bond will always stay delegated to your validator and can be considered self-staked. **Q: Does the PSR bond count for the self-stake requirement of the Solana Foundation Delegation Program?** Yes, the SOL in your bond counts towards the self-stake requirement of the [Solana Foundation Delegation Program](https://solana.org/delegation-criteria#self-stake) (SFDP). --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. 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