Osmosis is a Layer-1, Proof-of-Stake (PoS) blockchain built using the Cosmos SDK that has optimized its design to be a sandbox for automated market makers (AMMs). The chain enables developers to design and deploy customized AMMs by using its various modules and leveraging Osmosis' on-chain governance system. Osmosis' native token, OSMO, grants holders the right to vote on proposed network changes and earn rewards for helping secure the network. Its first application, also called Osmosis, is an AMM that features ATOM and OSMO as its initial base trading pairs, with many more having been added since launch, making Osmosis one of the main options for swapping tokens in the Cosmos ecosystem.
Why should I stake my OSMO?
Staking is the process of locking up a digital asset (OSMO) to provide economic security for a public blockchain, therefore staking your OSMO helps secure the PoS Osmosis network. Further, most PoS blockchains are initially inflationary in nature, so staking your OSMO prevents you from getting inflated out of your position as you earn rewards for helping secure the network and validate transactions. Lastly, you can participate in network governance.
- Secure the network – With OSMO, you have the power to contribute to the security and governance of Osmosis through staking and voting on governance proposals.
- Earn rewards – When you stake to a validator, you are contributing to the security of the network and are rewarded with OSMO through staking rewards.
- Vote for the future – Staking OSMO allows you to vote on governance proposals and contribute to making decisions on the future and direction of the network.
What happens when I stake my OSMO?
As Osmosis utilizes a PoS consensus mechanism, you can delegate an amount of OSMO you hold to a "validator", making you the "delegator". Validators on the Stargaze blockchain (and most other PoS blockchains) validate the network by approving transactions. The more OSMO a validator holds the more powerful they are and the more "vote" they have in the network, which allows them to validate more transactions, thus earning more rewards. By delegating your OSMO, 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 OSMO to them.
That's how you earn rewards.
How much can I earn from staking my OSMO?
At the time this post was published, the APY (Annual Percentage Yield) for staking OSMO is 108%.
For the most up-to-date rewards rate, you can check out the Steakwallet app.
What is the minimum amount of OSMO I can stake?
To stake OSMO, a minimum of 0.05 OSMO is required. This ensures you can stake and also pay the Osmosis network transaction fee. You should always make sure to have enough OSMO available to pay for network fees, as all blockchain interactions (such as sending a transaction, staking, unstaking, or interacting with other dApps) require them.
How do I stake my OSMO?
When you stake your OSMO, you are able to choose how much of your OSMO you want to delegate to the validator. You can stake any amount of OSMO, for which you immediately start accumulating rewards. You will not be able to use the staked OSMO for anything else or sell them during the period the OSMO are staked.
Make sure you have enough OSMO 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 OSMO staked to?
Currently, if you stake your OSMO 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 OSMO?
When you unstake your OSMO, you can decide on the amount you want to unstake. Once you confirm the amount, your OSMO will now be "unbonding" from the validator. This process takes 21 days, during which your unstaked OSMO is not earning any rewards. When you unstake your OSMO, any unclaimed rewards you may have will be auto-claimed.
Please note: When you unstake OSMO from any given validator, you can unstake at most 7 times in a 14 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 OSMO and the delegation is confirmed, you will start earning rewards on the staked amount instantly.
How do I claim my staking rewards?
On Cosmos SDK based blockchains, you need to manually claim earned rewards. Unless you have enough OSMO to cover network fees for claiming your rewards, you will need to wait until you have earned enough OSMO 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 fee?
No. Steakwallet never charges a fee on your staking rewards.
Is OSMO staking safe?
Given that you always maintain custody of your assets (as Steakwallet is non-custodial), you always remain in full control.
While staking OSMO is relatively safe, and while we work together with Figment (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 OSMO.
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.
However, this is a very rare occurrence. Staking is one of the safest way to earn rewards in crypto.