The Cosmos ecosystem has been growing at a rapid pace, with ATOM stakers often being rewarded with Airdrops from projects launching in the ecosystem. You can find answers to the most frequently asked questions below, as well as a step-by-step guide on how to stake your ATOM through Steakwallet at the bottom of this post.
You can check the latest airdrops on our open source airdrops website here: https://airdrops.steakwallet.fi
Staking is the process of locking up a digital asset (ATOM) to provide economic security for a public blockchain. You can learn more about staking ATOM in its official documentation.
What is Cosmos?
Cosmos dubs itself the "The Internet of Blockchains", as the project’s goal is to make blockchain technology less complex and difficult for developers through a more modular framework. This allows new projects on the Cosmos SDK to be built more easily using code blocks that already exist. In the long run, the hope is that this will result in complex applications being more straightforward to construct. The Interblockchain Communication protocol (IBC) was also established to make it easier for blockchain networks to communicate with each other, preventing fragmentation in the industry. Scalability is another priority, meaning substantially more transactions can be processed per second than more old-fashioned blockchains, like Bitcoin and Ethereum.
Cosmos’ origins can be dated back to 2014, when Tendermint, a core contributor to the network, was founded. In 2016, a white paper for Cosmos was published — and a token sale was held the following year. ATOM tokens are earned through a hybrid proof-of-stake algorithm, and they help to keep the Cosmos Hub, the project’s flagship blockchain, secure. This cryptocurrency also has a role in the network’s governance.
Why should I stake my ATOM?
Staking your ATOM helps secure the Proof-of-Stake (PoS) network. Further, most PoS blockchains are initially inflationary in nature, so staking your ATOM prevents you from getting inflated out of your position as you earn rewards for helping secure the network and validate transaction.
What happens when I stake my ATOM?
As Cosmos utilizes a Proof-of-Stake consensus mechanism, you can delegate an amount of ATOM you hold to a "validator", making you the "delegator". Validators on the Cosmos blockchain (and most other PoS blockchains) validate the network by approving transactions. The more ATOM a validator holds the more powerful they are and the more "vote" the have in the network, which allows them to validate more transactions, thus earning more rewards. By delegating your ATOM, you trust the selected validator to be a good network participant. From the earned rewards, the validator gives a certain percentage (stipulated by the network) back to the delegators that have delegated (staked) their ATOM to them.
That's how you earn rewards.
How much can I earn from staking my ATOM?
At the time this post was published, the APY (Annual Percentage Yield) was: 10.42%.
For the most up-to-date rewards rate, you can check the Steakwallet app or visit a website such as Staking Rewards.
What is the minimum amount of ATOM I can stake?
To stake ATOM, a minimum of 0.05 ATOM is required. This ensures you can stake and also pay the Cosmos network transaction fee. You should always make sure to have enough ATOM available to pay for network fees, as all blockchain interactions require them (such as sending a transaction, staking, unstaking, or interacting with any other dApps).
How do I stake my ATOM?
When you stake your ATOM, you are able to choose how much of your ATOM you want to delegate to the validator. You can stake any amount of ATOM, for which you immediately start accumulating rewards. You will not be able to use the staked ATOM for anything else or sell them during the period the ATOM are staked.
Make sure you have enough ATOM in your wallet to pay for network transaction fees.
Please note: You will need to manually claim your rewards and re-stake them to earn the maximum possible rewards. More on claiming your rewards below.
Which validator is my ATOM staked to?
Currently, if you stake your ATOM with Steakwallet your stake gets delegated to validators run by Figment. Figment is a reliable partner and one of the most trusted validator providers in the industry. We plan to offer more optionality in the future.
How do I unstake my ATOM?
When you unstake your ATOM, you can decide on the amount you want to unstake. Once you confirm the amount, your ATOM will now be "unbonding" from the validator. This process takes 21 days, during which your unstaked ATOM is not earning any rewards. When you unstake your ATOM, any unclaimed rewards you may have will be auto-claimed.
Please note: When you unstake ATOM from any given validator, you can unstake at most 7 times in a 21 day period. If you try more, the unstake will fail. You must wait for one of the previous unstaking entries to expire.
When will I start earning rewards?
When you start staking your ATOM and the delegation is confirmed, you will start earning rewards on the staked amount instantly.
How do I claim my staking rewards?
On the Cosmos network, you need to manually claim earned rewards. Unless you have enough ATOM to cover network fees for claiming your rewards, you will need to wait until you have earned enough ATOM to cover the network fee.
On Steakwallet, there is a "Claim Rewards" button right below your staked balance that shows your earned rewards available for claiming.
Does Steakwallet take a cut of my rewards or charge a few?
No. Steakwallet never charges a fee on your staking rewards.
Is ATOM staking safe?
Given that you always maintain custody of your assets (as Steakwallet is non-custodial), you always remain in full control.
While staking ATOM is relatively safe, and while we work together with Figment as they are one of the most reliable validators in the industry, there's always a risk of slashing. If a slashable event happens, you can lose a portion of your staked ATOM. However, this has not happened on the Figment validator in all its years of existence.
There are two ways you can be slashed:
- If you delegate to a validator that is offline for over 20 hours (assuming a 7.22s block time), you will lose 0.01% of the tokens you have delegated to that validator.
- If you delegate to a validator that signs the same block twice with the same key, you will lose 5% of the tokens you have delegated to that validator.
For a step-by-step guide on how to stake your ATOM via Steakwallet, please click here.