When one engages in Tezos baking, earning money becomes the main priority. Depending on the amount of XTZ staked, there is some good money to be made in a passive manner. 

Baking Tezos is Passive Income

Given the opportunities to stake Tezos, there is a lot of information to take into account. Those who are new to this concept may want to check out the basics first and foremost. Afterward, it is a matter of staking solo, or delegating one's baking rights to collect rewards that way.

Regardless of the option chosen, most users care about how much they can earn in the process. Staking or delegating larger amounts will increase one's earnings, which is only normal. That being said, the percentages are virtually the same for all users, regardless of how they decide to bake. 

Currently, the average reward sits at roughly 5.76% per annum. This figure can change if one decided to delegate baking rights to a service provider with high fees. As mentioned in the previous post, some providers can charge up to 50% in fees. That means the user will earn half of the normal rewards. 

Moderate Earnings can add up

Baking Tezos is not a get-rich-quick scheme. While users can earn some good money in a passive manner, the "income" remains limited.

Assuming one has 1,000 XTZ to stake - currently valued at $32,200 - the monthly earning is roughly 4,799 XTZ, or $15.45. On a yearly basis, one would earn 57.58XTZ, or $185.43. 

Should the Tezos price go up significantly, everything changes. With one XTZ valued at $20, for example, these earnings increase by 500% across the board. If one firmly believes the price will rise, baking XTZ is always an option worth exploring. 

Payment Cycle Knowledge

Most proof-of-stake currencies will issue network rewards fairly quickly. In the case of Tezos, things are done a bit differently. That is a good thing, yet it also introduces a minor learning curve for both novice and somewhat experienced users alike. 

XTZ Rewards are paid out in the form of cycles. Every cycle spans 4,096 blocks, or roughly 4,096 minutes. It takes about 2.85 days to complete one cycle successfully.

Assuming one delegates baking rewards, it takes until the 8th cycle before rights are delegated to the baker. On cycle 15, rewards for cycle 8 begin to accumulate. By the time cycle 22 comes around, rewards for cycles 8-15 will be paid out accordingly. 

That means it takes 62.577 days to see the first baking rewards come in. A two-month waiting period may not be ideal, but it is how the system works right now. Subsequent payments will follow every seven cycles, or 22 days.