How To Stake Cosmos With Validators
If you're looking to earn passive income while securing the Cosmos network, staking ATOM (Cosmos) is a great option. This guide will walk you through the process of staking Cosmos with validators, which allows you to keep your crypto safe and in your own custody. You can participate in network security by delegating your stake to validators and earning rewards.
What Is ATOM Staking?
ATOM staking is the process of holding and locking up a number of ATOM tokens (the native cryptocurrency of the Cosmos network) over a period of time. The goal of staking is to participate in the network Proof-of-Stake consensus mechanism, help secure the network, and earn rewards.
Staking ATOM tokens helps secure the Cosmos network while earning rewards through additional ATOM tokens. These rewards are distributed to validators in proportion to the amount of ATOM they have staked and the length of time they have been staking.
Cosmos Delegators
A delegator is a token holder who delegates cryptocurrencies to a validator or a staking pool on a Proof-of-Stake (PoS) blockchain.
When you delegate stake to a validator, you specify:
- The ID of the node you're delegating to.
- When you want to start/stop delegating stake (must be while the validator is validating).
- How many ATOM you are staking.
- The address to send any rewards to.
Cosmos Staking Requirements
- The minimum amount that a validator must stake is 1 ATOM.
- There is no minimum amount of ATOM to stake for delegators. Validators set their own minimum delegation amount, which can range from as low as 1 ATOM to as high as several thousand ATOM.
- There is no minimum staking period for validation. However, it's noteworthy that once you delegate your ATOM to a validator, you are unable to unstake or transfer it to another validator for at least 21 days.
- There is no maximum staking duration for validation.
- The minimum time to stake ATOM tokens for delegation is 21 days.
- There is no maximum amount of time to stake ATOM tokens for delegation.
- The protocol does not set the minimum delegation fee rate for Cosmos validators, and it is up to each validator to decide on their own delegation fees.
- The maximum weight of a validator for Cosmos is not fixed and can vary based on the total amount of staked ATOM tokens on the network.
Staking Rewards
The annual percentage rate (APR) that is paid in return for staking ATOM to a validator is currently about 10.6%.
Get the latest Cosmos staking APR info with the below link:
Validators | Earn Staking Rewards | Run Cosmos Node
How To Stake ATOM Validator: Step-by-Step Guide
The below guide will provide details on the staking process, delegating staked tokens & how to get node id for ATOM holders.
Step 1: ATOM wallet
Numerous wallets support staking ATOM. To get started, navigate Wallets & Block Explorer Cosmos Ecosystem and select one that matches your preference.
In this guide, we will use the Keplr wallet to stake ATOM. You will need to add Keplr to your Chrome extension, set up a password, and write down your seed phases. The process is similar if you choose other web wallets.
Step 2: Buy ATOM
You will need to have ATOM in your wallet to join staking. There are two options - buying or depositing tokens.
Note: Ensure you set up the Cosmos Hub chain before making any deposits.
You can buy ATOM through Kado, Transak, and MoonPay.
Step 3: Choose Cosmos Validator
On the Kelpr dashboard, scroll down to select a Validator after purchasing ATOM; you will need to choose a validator to delegate your ATOM tokens.
Validators are responsible for validating transactions on the Cosmos network and maintaining the network's security. You can choose a validator from the list of validators available on the Cosmos website or use a Cosmos wallet like the one provided by Ledger.
What are validators?
What is a blockchain validator node? - Blockchain Guide
Step 4: Delegate ATOM
Specify the staking period and stake amount. Pay attention to the end time of the selected validator. The delegation period cannot be set to end past the end date that the validator has set.
Delegate Your ATOM
Once you have chosen a validator, you can delegate your ATOM tokens to the validator. This process involves sending your ATOM tokens to the validator's staking address. This is done from within your Cosmos wallet by selecting the validator and delegating your tokens.
If the validator you delegate tokens to is sufficiently correct and responsive, you will be rewarded when you are done delegating. Delegators are awarded according to the same function as validators. However, the validator that you delegate to keeps a portion of your reward specified by the validator's delegation fee rate.
Wait for Confirmation After delegating your ATOM; you will need to wait for the delegation to be confirmed. This can take up to 24 hours, depending on your chosen validator.
Earn Staking Rewards
Once your delegation is confirmed, you will earn staking rewards. The rewards are paid out in ATOM and are based on the amount of ATOM you have delegated and the length of time you have been staking.
Step 5: Unstaking ATOM
If you decide to unstake your ATOM, you will need to go through a similar process to delegating your ATOM. You will need to select the validator and then unstake your tokens. It is important to note that there is a cooldown period after unstaking, during which you cannot withdraw your ATOM.
Best ATOM Validators For Staking
Not sure about choosing the proper validator for staking your tokens? Check out our guide on the top five validators for staking Cosmos tokens based on their staking rewards, node uptime, and the number of ATOM tokens available to stake.
Our staking validator guides are released monthly to reflect the changing dynamic nature of validator nodes and to provide the best up-to-date validating node info.
Start staking your Cosmos tokens today!
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