We will have some introduction about staking, staking in block chain isn’t anything new. It has been talked for a while now , and also one of the top Block chains Ethereum are trying this to implement since 2016. So I will be staking some ATOM tokens on Cosmos block chain and will be showing how i am doing this. Cosmos is quite new block chain , or what people call in 3.0 block chain. Where they have some unique features where you basically can plug in any block chain into Cosmos network of block chains and make it more efficiently. In few words how I understand staking in simple way. In Proof of work chain security, you have capital , you buy for example Antminer S17. Than you connect it to mining pool, and by doing this you get block rewards depending on how big hash rate you have. So in the Cosmos Proof of stake security, very similar. You again invest your capital and buy Atom coins. Then there is these validators , similar as pow has mining pools. You send your coins to these validators trough smart contract, which is called delegation . And in this way you get part of the block reward depending on how much Atom coin you have, the more Atoms you have the bigger piece of “pie”.
So lets get in to in and stake some Atoms. First of all I would recommend you to use secure hardware wallet for this as ledger nano, what I will be doing. You want to download Cosmos app in ledger nano app store. If you don’t see it in app store you might need to enable developer mode in your settings, as it is still in development. For simplicity purpose i’m using web wallet where I will be using my ledger nano to access my wallet. You can find multiple cosmos wallets in here https://hub.cosmos.network/
For this tutorial ill be using web wallet from this list https://lunie.io .
The next steps are very simple :
- open this web wallet with your ledger nano device
- you will see your wallet address there, transfer some ATOM tokens to it.
- When ATOM tokens is in you wallet start staking
- Click on Staking tap, choose validator you want to Delegate.
- Enter amount of tokens you want to delegate and confirm transaction with your ledger nano.
It is very simple, check out the video down below this might help you more.
As soon as you will delegate your coins you will start getting block rewards on amount of coins you have. There is no fixed block reward on cosmos block chain, it will be an average 7-20% yearly. It is calculated compound interest as I would say. Depending on how many total Cosmos network ATOM tokens are staked, if they will be less then 2/3 of total amount Atom. Then the block rewards will be higher closer to 20%. If staked ATOMS will be more from total of 2/3 then you will get closer to 7%. Also you need to note that if you want to finish staking (delegating) your coins, it will take 3 weeks to arrive back in your wallet. But if you want to change to delegate your Atom to different validator it will be done without waiting. I hope it was easy to understand as it was for me 😊
Download compound interest calculator for Atom staking here.
|Atom staking profits|
|Compound end interest||11035.54902|
Checkout the video: