Stake Pools are protocols that faciliate liquid staking. If you stake directly with a validator you are subjected to a cool down period which means your SOL will not be available until the end of the current epoch. To help get around this issue stake pools will exchange your SOL for a protocol token. The value of the protocol token is determined by the protocol itself. The value increases over time because of the gains they have made staking the SOL given to the stake pool. Right now most stake pool’s APY hovers around 6.7%
Stakers should consider utilizing stake pools as part of their overall staking strategy to help keep their stake SOL available for important opportunites (NFT mints, IDO’s, etc). It is also helpful that the stakepools automate the selecting of validators agaisnt goals such as increased decentralization, maximizing APY, and bootstrapping new validators.
Validators should read the overviews and read the docs of each of the stake pools to learn how to maximise their opportunities to get stake delegated to them from the various stake pools. The best stake pools for validators that are just starting out are Pool’s who’s delegation strategy is algorithmic and automated. e.g. Marinade and Socean for now. Your best chance of getting out of the losses stage of starting a validator is meeting and optimising towards the stake pool requirements.
Marinade’s delegation strategy is entirely protocol driven. They utlize a score function which looks at validator performance (anything below average recieves 0 score), commission charged, at least 100 self stake, not deliquent, and data center concentration. Marinade stakes anywhere from 10k to 100k SOL with its validators. Getting on this stake list by performing well in your first 5 or so Epochs can get your to break even quickly.
Marinade has the most intergrations and strong community values which makes Marinade one of the best choices for staking with as far as Stake pools go.
Socean’s delegation strategy out of the gate is quite simple. The top ~50 validators who are not above the halting line, and are not in the top 3 most concentrated data centers, then you get an equal split with the others.
Over time Socean will improve their algorithm and make it protocol based like Marinade. Their protocol as outlined in their delegation strategy docs differes from marinade but overall has a similiar effect.