Mar 31
Lesson 2 — Staking $Atom
Earn passive income using your Cosmos Ecosystem assets by staking them to Validators across different Cosmos chains and earn daily compoundable rewards.
So now that you have some $Atom on your Keplr wallet, one of the most popular activities in the Cosmos Ecosystem is “Staking”.
Staking is the act of depositing your funds in a smart-contract or a Validator node in order to gain rewards. Lets focus more on Staking to a Validator, also called “Delegating”.
Since Cosmos chains are based on a technology called Proof-Of-Stake, to secure the network, people can “Stake” or “Delegate” their coins ($Atom for example) to Validators. Validators are servers that are used to process blocks on the blockchain using the voting rights of the funds that were staked/delegated to them. A more in-depth guide on this can be found here.
In this article, we will focus on the basics.
For users, Staking is a very nice activity as its none custodial, meaning you keep control of your coins and can be quite lucrative. Here are some of the benefits of staking :
- Earn passive income averaging between 10% and thousands of % depending on the $coins you are staking.
- Vote in the governance of the chain, participating in the decision making and workings of the blockchain where you are staking your funds.
- Qualify for airdrops and other incentives. By staking, you might sometimes receive other tokens from projects that are looking to bootstrap users from the different Cosmos chains and interest them in their project. These incentives are usually passively gained by Staking.
How to Stake $Atom using Chrome explorer and Mobile
Chrome & keplr extension :
Head to https://wallet.keplr.app/ and connect using your Keplr wallet.
By selecting Cosmos Hub on the left side list of supported chains, you will see your $Atom balance. Hit “Stake”, and you will see the Validators list. In this example, we are staking our $Atom with Posthuman, a great Cosmos Validator. In order to best choose your validator, you can tackle this read here.
Once you have selected your validator, by pressing “Manage”, you will get the following windows :
All you have to do now, is hit “Delegate”, you will be prompted by Keplr wallet to validate the transaction by hitting “Approve” and pay the “gas fee” which is a small transaction fee the blockchain charges to process the transactions.
Very important : when you delegate your tokens, you always want to leave some remaining tokens to cover 2 or 3 transaction fees in order to be able to undelegated or redelegate your rewards. As such, each time you redelegate your rewards, make sure you leave some token dust for the next transaction.
Once your delegation is done, you can check your Keplr Wallet dashboard and you should have something similar to :
Your will never need to worry about the “MEMO” field when Staking your coins using Keplr Wallet.
Staking $Atom using Keplr Mobile app :
Head to your Keplr Mobile app, On the main page hit “Stake”
Your will get the list of all validators as shown below :
If you know the name of the validator you want to delegate to, you can use the search field to look for him. We want to delegate to Posthuman, so we will search for his Validator.
Once you found your validator, to Stake your $Atom, you can select him and hit “Stake”.
Input the amount to “Stake” and and confirm by hitting “Stake” again
Again, we have to confirm the transaction on chain and pay for the gas fee. Same warning as before when using Keplr Wallet. All staking, unstaking, redelegating and transfer of funds are on chain transactions and need a small gas fee to be paid for them to be processed by the blockchain.
Very important : when you delegate your tokens, you always want to leave some remaining tokens to cover 2 or 3 transaction fees in order to be able to undelegated or redelegate your rewards. As such, each time you redelegate your rewards, make sure you leave some token dust for the next transaction.
You should have a screen showing a successful transaction.
If you check your Staking Dashboard, you can see your Delegation to your Validator of choice and claim your rewards or restake them daily to take advantage of the compounding effect.
This concludes this guide about Delegating/Staking your $Atom.
On Lesson 3, we will see how we can “Swap” coins yo exchange our $Atom for other Cosmos Ecosystem coins such as $SCRT, $LUNA, $UST, $OSMO or $JUNO, and go through what is called an IBC transaction (cross chain transactions). Once you swap your $ATOM for another coin, you can delegate/stake said coin with a Validator of that specific chain using the same process as shown here.
