Are your ATOM tokens collecting dust? You can unlock their earning potential with staking!
Staking ATOM lets you actively participate in securing the Cosmos network's functionality. And, in return, you can increase your holdings by earning additional ATOM.
We are going to dive deep into ATOM staking, explore its options and help you pick the perfect method to maximize your rewards! Let's go ahead and help you enhance your income opportunities!
What is Cosmos ATOM Staking?
Cosmos (ATOM) aims to bridge the gap between different blockchains, enabling them to communicate and work together smoothly. Cosmos uses a proof-of-stake system where users can get rewards by staking their ATOM tokens.
Staking involves locking up your coins for a set period, making it unavailable for trading. This process helps secure the network while also generating rewards for participants.
Everyone having ATOM coins in the crypto wallet can participate in staking. You can stake Cosmos ATOM at any time, there’s no minimum amount required to do it. However, some validators may have such minimums, so it’s best to check twice.
Luckily, Cosmos staking is a relatively straightforward process. Here are several steps how to stake Cosmos ATOM:
- Pick a wallet
- Transfer your ATOM
- Choose a validator
- Delegate your ATOM
Cosmos can be staked in four different ways. We’ve prepared a list of places and methods where you can stake ATOM:
- Use Centralized Exchange
- Delegate to a Validator
- Use Liquid Staking Pool
- Run Your Own Validator Node
The choice of the best ATOM staking way depends on your priorities. If you’re a beginner, centralized exchange is the best way to stake ATOM, but it offers less returns. In case, if you have experience with staking, delegating to a validator gives you more control over rewards, but requires some thorough research. Liquid staking pools let you use staked coins but contain higher risks. Running validator nodes offer the most rewards, but it demands significant technical knowledge.
Make sure to read: Staking Strategies for Maximizing Returns.
ATOM has a base staking reward of 9.7% APY. Herewith, many platforms offer higher APY rates to attract users.
Cosmos pays staking rewards in real-time, roughly every 7 seconds. The ATOM staking rewards will be kept separate from your Cosmos ATOM stake and won't automatically increase your stake.
ATOM is considered to be good for staking. Current estimates suggest an APY in the range of 10-20%, depending on the validator. This APY is not fixed. It can be changed due to the network activity and the amount of staked ATOM.
As for the best place to stake ATOM, it also depends on your preferences and risk tolerance. Here are some of the best places to stake Cosmos:
- Keplr: around 14.4% APY
- Ledger: around 20% APY
- Kraken: around 18% APY
Cosmos staking isn't available on Cryptomus at this time, but we’re planning to include it in the future. Please, be aware that APY can go up and down, make sure to do your research and look up present rates beforehand.
How Do I Claim Cosmos ATOM Staking Rewards?
You can claim Cosmos ATOM staking rewards at any time on your account. To get ATOM back from staking, you need to unstake it. Following these actions you’ll understand how to unstake Cosmos Atom:
- Go to your ATOM assets
- Tap “Unstake”
- Enter the amount to unstake
- Review and confirm
Then, the unstaked amount will be displayed under “Unbonding”. It’s important to note that Cosmos has a 21-day unbonding period and you won’t be able to access these tokens before that. You can always check how much time has passed since you’ve unstaked the tokens, though.
Claiming ATOM staking rewards usually incurs a small network transaction fee. Make sure your accumulated rewards are sufficient to cover this fee before claiming.
Learn more about crypto staking here.
Is Staking Cosmos ATOM Safe?
Staking Cosmos is a safe way to contribute to the Cosmos network's security and get returns at the same time. However, it's important to follow essential practices to safeguard your ATOM stake:
- Use strong passwords and enable 2FA
- Choose only reputable platforms
- Regularly update your wallet software
Risks Associated with Staking Cosmos ATOM
Keeping in mind all the previous things, there are still some risks associated with staking ATOM. There are some potential risks to be aware of:
- Double-Signing: This validator misconduct causes a 5% slashing penalty.
- Downtime: If the validator goes offline for an extended period, it leads to 0.01% slashing.
- Smart Contract Risk: There's a risk of bugs or exploits in the code that could lead to the loss of your ATOM.
- Exchange Risk: There's always a possibility of exchange hacks or platform issues leading to potential loss.
When you’re acquainted with the risks and take specific measures to mitigate them, you can stake ATOM in the most secure way.
Tips for Maximizing Your Cosmos ATOM Staking Rewards
To start you off, we have some useful tips that will set you on the path. Follow these instructions to attain the best staking experience and gain the maximum ATOM reward:
- Research Your Platforms: Don't just go for the highest advertised returns. Look for validators with a solid reputation and reasonable fees.
- Use Validators with High Uptime: The higher it is, the more rewards you'll likely earn.
- Recompound Rewards: Some platforms let you re-stake the rewards for higher effective APY. It comes with some risks, though, do your research beforehand.
- Diversify Your Staking: Use several validators to spread the risks and protect your funds.
- Research Commission Rates: Most platforms charge fees for rewards. It’s best to pick platforms with fair commissions that balance profitability.
In summary, staking Cosmos ATOM is a straightforward process that allows you to accumulate rewards for contributing to network security. In this article, we’ve made a roadmap for navigating the ATOM staking process, from platform selection to reward claiming. While there are risks involved, following some practices and conducting research can definitely help you minimize possible troubles and maximize your rewards.
Thanks for reading! Let us know what you think about the topic in the comments below!
