Staking Tezos (XTZ) presents a powerful opportunity to fortify the security of the Tezos blockchain while earning rewards for your valuable contribution. This guide will show you how to stack Tezos with validators to make impressive returns.
Staking with validators is one of the best ways to keep your crypto safe and within your own custody compared to staking with an exchange chain or other platforms where you may not have complete control of your crypto.
What is Tezos Staking?
Tezos staking is the process of holding and locking up a number of XTZ tokens (the native cryptocurrency of the Tezos 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 XTZ tokens helps the Tezos network's consensus mechanism and helps secure the network while earning rewards through additional XTZ tokens. These rewards are distributed to validators in proportion to the amount of XTZ they have staked and the length of time they have been staking.
Fun fact: Tezos' validators are known as "bakers."
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 XTZ you are staking.
- The address to send any rewards to.
Tezos Staking Requirements
- The minimum amount a validator must stake in Tezos varies depending on the validator.
- There is no minimum amount that a delegator must delegate.
- The minimum staking period for validation is 7 cycles, which equals approximately 20.5 days.
- There is no maximum staking duration for validation. Bakers can continue to validate blocks as long as they continue to meet the staking requirements.
- Tezos minimum delegation fee rate varies depending on the validator. For instance, Atomic Wallet charges a delegation fee of 0.1 XTZ.
Tezos staking rewards are divergent based on your choice of a validator. The annual percentage rate (APR) paid in return for staking AVAX to a validator is around 6%.
How to Stake Tezos Validator: Step-by-Step Guide
The below guide will provide details on the staking process, delegating staked tokens & how to get node id for XTZ holders.
Step 1: Get a Tezos wallet
To stake Tezos, you'll need a Tezos wallet that supports delegation. You can check available wallets in the Tezos store & use page.
Popular options include Ledger Live, Galleon, and Temple Wallet. Choose a wallet you are comfortable with and follow the instructions to create a Tezos wallet if you don't have one. In this guide, we use Temple Wallet as an example.
Step 2: Buy XTZ
Stake Tezos With Validators. You can buy XTZ on various cryptocurrency exchanges such as Binance, Bitfinex, or Kraken. Use our guide on how to buy Tezos XTZ on the Binance exchange to get started.
Step 3: Choose Tezos Validator
Click on Delegate.
Step 4: Choose Tezos validators (bakers)
After clicking "Delegate," you will be directed to the Delegate board with a list of recommended validators (bakers). Already had your choice? Simply put the baker's address in the blank box.
Delegate Your XTZ
Once you have chosen a validator, you can delegate your Tezos tokens to the validator. This process involves sending your Tezos tokens to the validator's staking address. This is done from within your Tezos wallet by selecting the validator and delegating your tokens.
If the validator you delegate tokens to is sufficiently correct and responsive, you will receive a reward when you are done delegating. Delegators are rewarded 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 Tezos, 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
After you have delegated your XTZ tokens to a validator, you can monitor your staking rewards. Validators typically distribute staking rewards to their delegators periodically, which can vary depending on the validator's terms. You can track your rewards through your Tezos wallet or through the validator's website or dashboard.
Step 5: Unstaking XTZ
Unstaking Your XTZ If you decide to unstake your XTZ, you will need to go through a similar process to delegating your XTZ. 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 XTZ.
Best Tezos Validators for Staking
Unsure how to choose the right validator for staking your tokens? Check out our guide on the top 10 validators for staking Tezos tokens based on their staking rewards, node uptime, and the amount of Tezos tokens available to stake.
Our staking validator guides are released on a monthly basis to reflect the changing dynamic nature of validator nodes and to provide the best up-to-date validating node info.
Start staking your avalanche tokens today!