Learn how to stake Cosmos (ATOM) and consistently earn rewards in native tokens
If you've been wandering through the web like a confused Vincent Vega, asking the search engine, "Where can I stake ATOM?" your virtual roaming might end here. In the following blog post, you will learn that Cosmos (ATOM) staking can be easy, secure, and done with minimal risk.
Perhaps you have already visited the Cosmos official website and found out that it isn't easy to stake ATOM solo as doing it properly requires expertise and research, for instance, to be able to choose a reliable and profitable validator with adequate fees.
Perhaps you don't own a Ledger wallet required for solo staking and don't plan on buying one, but you would settle for a non-custodial staking solution that offers the level of funds protection closest to that a cold wallet ensures.
Or perhaps you are screening all staking providers for the best annual percentage yield (APY) on staked ATOM.
Whichever the reason, CryptoStake has the answer to it in terms of user-friendly simplification of the staking process, top-notch security, a 'no-access' policy with regard to users' funds, and an industry-competitive APY that ensures fair earnings in ATOM, the network's native utility token, not its wrapped or synthetic versions.
This blog post reveals not only how to stake ATOM with little to no knowledge of its mechanics, but also how to do so in a fully protected environment. CryptoStake goes beyond offering reliable means for establishing passive income in crypto. We also strive to educate users about these mechanisms, empowering them to create their own staking strategies to maximize yield in ATOM or other Proof-of-Stake (PoS) cryptocurrencies on our staking menu.
What happens when you stake ATOM?
Staking ATOM, the native token of the Cosmos Hub, allows you to participate in the security and validation of transactions on the Cosmos network. In return for staking your ATOM, you earn Cosmos validator rewards in the form of additional utility tokens.
But before explaining in detail how to stake ATOM and earn Cosmos validator rewards, let’s take a quick detour to break down key concepts for the beginners, who may also be reading this blog post right now.
In blockchains, a consensus mechanism acts like a voting system to validate transactions and secure the network. These are several consensus mechanisms utilized in blockchains, namely Proof of Work (PoW), Proof of Stake (PoS), Proof of Authority (PoA), and Proof of Elapsed Time (PoET).
Traditionally, blockchain security relied on Proof-of-Work (PoW), a computationally intensive process where miners compete to solve complex puzzles. While effective, PoW suffers from drawbacks like high energy consumption and scalability limitations. Cosmos adopts the innovative Proof-of-Stake (PoS) consensus mechanism, offering a more sustainable and efficient alternative.
In Proof-of-Stake blockchains, crypto staking resembles a secure deposit system where users contribute their holdings to validate transactions and earn rewards in proportion to their stake, similar to traditional banks offering interest on deposited funds.
In PoS, validators are chosen based on the amount of ATOM they have staked. These key network participants are responsible for verifying transactions and securing the network. The process of choosing validators is similar to a lottery, where the winner gets to validate the next block, but there is a catch. The more ATOM a validator stakes, the higher their chance of being selected to validate a block and earn rewards for its flawless execution.
While running your own Cosmos validator requires technical expertise, CryptoStake offers a low-risk alternative. You can participate in staking as a nominator, delegating your ATOM to our secure and reliable validators. With over $2.8 million committed in ATOM and a validator duplication strategy across three data centers, CryptoStake boasts a 99%+ reliability rate, maximizing your uptime and minimizing risk.
Where to stake ATOM for high yields
Here comes a spoiler alert: users confirm that CryptoStake app is the best place to stake Cosmos. Now that we’ve announced the “specialty,” let’s study the entire menu. There are several ways to engage in Cosmos (ATOM) staking, and it's essential to familiarize yourself with each method to determine which one aligns best with your staking objectives and risk tolerance level. Remember, "staking" refers to putting your holdings at stake, literally. It's crucial to recognize that there's also a possibility of being penalized for errors or malicious behavior. Therefore, understanding each staking approach is vital to making informed decisions and managing risks effectively.
Centralized Exchanges (CEXs): A convenient option for beginners, CEXs like Binance or Coinbase offer staking directly on their platforms. This is a user-friendly approach, but you relinquish control of your ATOM to the exchange. Additionally, CEX staking rewards may be lower compared to other methods.
Solo Staking: For experienced users, running your own validator node offers the highest potential rewards and maximum control. However, this requires significant technical expertise and infrastructure setup. Maintaining a validator node also comes with the responsibility of ensuring network uptime and security, which can be a daunting task.
Non-Custodial Staking with CryptoStake: CryptoStake represents an excellent option for crypto enthusiasts who want to strike a balance between security, control, and convenience. As a non-custodial staking provider, CryptoStake allows you to delegate your ATOM to secure validators on the Cosmos Hub network without surrendering control of your tokens. This means you retain ownership of your ATOM throughout the staking process and can withdraw it anytime.
To summarize, staking on CEXs offers certain convenience for those who also trade crypto on the same platform, but you are basically giving them control over private keys. It's a classic 'not your keys, not your ATOM' situation. Going solo is most profitable, but not as risk-averse as non-custodial staking where, as in the case of CryptoStake, you get access to state-of-the-art Cosmos (ATOM) staking setup without sharing private keys. Hopefully, your conclusion regarding the best place to stake Cosmos aligns with ours.
Unveiling the ATOM wallet staking
Wallet staking is a way for ATOM holders to earn rewards on their holdings without actively participating in the validation process of a Proof-of-Stake blockchain. CryptoStake offers a secure and convenient option in the form of our mobile and desktop application, downloadable from app stores as well as the official website.
Mobile App: Convenience Meets Security. Manage your staking portfolio from anywhere with our user-friendly mobile app. Fingerprint authentication ensures every transaction is secure, giving you peace of mind while you're on the go.
Desktop Version: Power Up Your Staking Experience. For the more technical user, our desktop application provides a comprehensive suite of advanced features. Gain in-depth analysis of your staking activity and reward allocation, allowing you to optimize your strategy and maximize your returns.
Our "Hacken-tested" wallet environment provides unparalleled security for staking your ATOM. As a registered user, you'll gain access to a diverse selection of top Proof-of-Stake blockchains, allowing you to stake various cryptocurrencies and earn high APYs. Crucially, CryptoStake prioritizes your control - you retain full ownership of your staked assets, ensuring they remain accessible and never at risk of compromise.
How to stake ATOM on CryptoStake
We strongly recommend having both CryptoStake mobile and desktop applications. This would allow you to stay on top of your crypto earnings wherever you are. Once you've chosen your preferred version, or both, follow these easy steps to begin Cosmos (ATOM) staking.
Effortless Account Setup: We ditch lengthy forms and excessive personal information requests. Simply create a secure password and safeguard your randomly generated 12-word recovery phrase (think of it as a master key to your crypto!). This phrase is crucial for regaining access, so store it carefully!
Fuel Your Staking Engine: Once your account is set up, fund your staking wallet with ATOM. The ATOM minimum stake amount can fluctuate, but currently sits at 100 tokens. Adding funds is as easy as any standard crypto transaction. We never charge deposit fees, and your transferred assets (including ATOM and other supported cryptos) remain firmly under your control. We don't touch your private keys or access your funds – ever.
Begin Staking: Head to the dedicated staking section within the CryptoStake app (look for the "S" icon). Here, you'll find all the essentials: minimum stake amount, unstaking period (how long it takes to withdraw your ATOM), estimated Annual Percentage Yield (APY), yearly inflation rate, and reward activation time. Don't forget to leverage our powerful ATOM staking calculator to estimate your future ATOM rewards and solidify your investment strategy. Once everything is in order, simply hit "Stake" to join the network. The activation period is swift, so you'll be earning rewards in no time.
Reap the Rewards: With your stake activated, you'll start collecting rewards directly in ATOM within your CryptoStake wallet. The app provides complete transparency, allowing you to monitor your staking progress and track your rewards in real-time. Our service fee of 3% is deducted before rewards hit your wallet, but the choice is yours: transfer your ATOM elsewhere, hold them securely within CryptoStake, or reinvest them for even greater returns through compounding.
Prior Considerations for Cosmos (ATOM) Staking
Engaging in Cosmos (ATOM) staking offers enticing possibilities for generating passive income. However, before embarking on this venture, a prudent investor should carefully consider several essential factors to ensure optimal alignment with their financial objectives and overall staking strategy.
Minimum Stake Requirement: Cosmos maintains a minimum staking requirement of 100 ATOM tokens. This threshold acts as a safeguard for network stability by ensuring a sufficient number of participants actively contribute to the ecosystem's security.
Unstaking Period: It is crucial to acknowledge the existence of an unstaking period associated with ATOM staking. Currently, a 21-day lock-up period applies to staked tokens. This period necessitates meticulous planning, particularly for investors who may require immediate access to their holdings.
Projected Annual Percentage Yield (APY): A significant benefit of ATOM staking lies in its attractive APY. As of the time of writing, the estimated APY stands at 15.97%. This figure represents the potential annual return on investment accrued through staking rewards.
Inflationary Impact: Investors must be aware of the potential impact of inflation on their staked ATOM holdings. The yearly inflation rate for ATOM fluctuates within a range of 7% to 20%. This continual introduction of new ATOM tokens into the circulating supply can have a dilutive effect on the value of individual tokens over time.
How does Cosmos work?
Now that you know how to stake ATOM, perhaps you'd be interested in looking behind the curtains, in other words, finding out how Cosmos works to understand its fundamental value to the blockchain industry.
Imagine a world of independent nations, each with its own currency and language, unable to trade or communicate. This is the current state of blockchains – isolated islands of innovation struggling to interact. Enter Cosmos, a project founded in 2014 by visionary computer scientists Jae Kwon and Ethan Buchman. Their ultimate goal is to build the "Internet of Blockchains," a network where independent blockchains can finally connect and collaborate.
Named after the ancient Greek concept signifying order and harmony, Cosmos tackles the interoperability problem with its innovative Inter-Blockchain Communication (IBC) protocol, which can be compared to a universal translator that allows different blockchains to understand each other. This unlocks a future where applications built on one blockchain can seamlessly leverage the strengths of another and finally achieve mass adoption. For instance, apps that communicate through Cosmos can utilize Ethereum's secure payments but also tap into a specialized blockchain for faster loan processing and a specialized logistics chain for efficient coordination – all thanks to the IBC protocol.
Critical role of Cosmos in building the Internet of the future
Interoperability acts as the missing link for Web3, a decentralized internet built on blockchain technology. Web3 promises a more democratic and user-controlled Internet compared to the centralized data ownership model of Web2.
With IBC, developers can create applications that leverage the strengths of multiple blockchains. This protocol allows Internet users to move their assets freely between different blockchains, fostering greater flexibility and control within the Web3 ecosystem. As the Web3 user base grows, individual blockchains might face scalability challenges. By enabling communication and resource sharing between chains, Cosmos helps lay the foundation for a scalable and future-proof Web3 infrastructure.
What about the competition?
While Cosmos is a pioneer in interoperability, competition is fierce. Polkadot offers a rival vision, using a central relay chain to facilitate communication. Chainlink, on the other hand, focuses on connecting blockchains to the outside world through its oracle network.
However, Cosmos holds a strong hand – a thriving ecosystem. The IBC protocol powers well-established projects like Osmosis (decentralized exchange), Juno (smart contract platform), and dYdX (decentralized margin trading). This established network effect positions Cosmos as a frontrunner in the race for the future of blockchain interoperability.
Bottom line
In conclusion, while Cosmos may not receive as much media attention as Ethereum or Bitcoin, it is undeniably a significant player in the blockchain industry with the potential to drive global adoption of this transformative technology. With its solid technological foundation, relatively stable cryptocurrency (ATOM), and attractive staking APY, Cosmos presents itself as a promising candidate for inclusion in your crypto investment portfolio.
Moreover, staking ATOM with CryptoStake offers a reliable source of passive income, supported by their non-custodial staking service. By understanding how to stake ATOM and appreciating the underlying principles of Cosmos, you can position yourself to benefit from both the financial rewards and the advancement of decentralized technology.
FAQ:
How often does Cosmos pay staking rewards?
Cosmos pays staking rewards approximately every 7 seconds.
Is staking ATOM worth it?
Staking ATOM offers a great opportunity to earn passive income while supporting a groundbreaking blockchain network. With lower volatility compared to some cryptocurrencies, it can be a great way to grow your holdings over time.
How profitable is staking ATOM?
ATOM staking boasts a double-digit APY, lower volatility, and compounding potential, making it a lucrative option for passive income generation.
How much Cosmos do I need to stake?
The current minimum staking amount on CryptoStake is 100 ATOM.
