TOP Things You Should Know About Staking Of Tezos

By PupazzoInnevato | Pupazzo Tricks | 23 Feb 2020


How can you stak with Tezos, for example on Coinbase, Binance or other exchanges and platforms?

Tezos is a cryptocurrency based on Proof of Stake and allows you to earn simply by leaving the tokens on deposit and actively participating in the process of validating transactions on the network of the same name.

However, it is necessary to use special platforms to be able to earn from the simple deposit of Tezos tokens (XTZ).

To earn interest with the stake, a node must immobilize a certain number of tokens on the network. The possibility that the node is chosen to validate the next block of the blockchain is proportional to the number of immobilized tokens, therefore the more tokens it keeps immobilized the more blocks it will validate.

When the node is called to validate a block, once validated correctly it is rewarded with tokens, while if it approves an incorrect transaction it loses part of the immobilized tokens.

In theory, anyone can stak their own tokens, but from a technical point of view it is not easy to do it independently, since it is necessary to install, configure and manage a node.

For this there is the Delegated Proof of Stake (dPoS), which allows token holders to delegate the staking of their funds to a node.

 

Tezos staking on Coinbase and Binance

Coinbase, for example, offers this service but only to U.S. customers, except those who reside in the states of New York and Hawaii and only after completing identity verification by providing a verified address and social security number (SSN) or a tax identification number (TIN).

On the other hand, on Coinbase it is very easy to stak XTZ, because it is sufficient to buy them on its exchange or deposit them in its wallet and leave them there.

In this way, the XTZ tokens always remain in the user's Coinbase wallet and can be used at any time. Once an initial retention period is completed, as long as they remain unused on the exchange wallet, interest is earned every approximately 3 days at an estimated annual rate of 5% which, however, varies over time based on the stake premiums distributed by the network. Tezos.

Binance also offers this service, although also in other countries and with premiums calculated on a daily basis. However, the distribution of prizes takes place only within the 20th day of each subsequent month.

Another exchange that offers staking on XTZ deposits is Kraken, which however offers a return at a fixed rate of 6%, with payments every Monday and Thursday.

However, to stak XTZ tokens on Kraken it is necessary to use a special procedure to the Spot Wallet that transfers the tokens to the stake wallet, from which it is also possible to quickly exit by transferring the tokens from the staking wallet back to the Spot Wallet.

 

The staking on Ledger

In addition to the exchanges, some wallets also allow the staking of XTZ.

For example, this is allowed on Ledger hardware wallets. The current annual rate of return is around 6%, less the fees for validation, but it takes at least five weeks to receive the first prizes. They are also delivered every 3 days.

In order to be able to stak XTZ tokens with Ledger it is necessary to choose a validator, verify and confirm the delegation directly on the wallet.

Another wallet that allows you to do this is the Trust Wallet, where prizes are distributed at each cycle. Unlocking the rewards requires 7 cycles, and each cycle equals 4,096 blocks, or approximately 3 days. In addition, it takes at least 21 days before you start receiving prizes.

To be able to stak XTZ tokens on Trust Wallet it is necessary to access the appropriate Staking Menu, click on Stake to start the procedure, choose a validator, send the tokens and confirm the transaction.

To remove tokens from staking just use the Unstake button.

Putting Tezos in staking is therefore very simple, and there are several platforms that allow you to do it.

On some of them it is also possible to buy XTZ tokens by paying in cryptocurrencies or fiat currencies, but it is always advisable to keep the tokens on proprietary wallets, since storage on wallets managed by third parties does not protect against any hacking, violations or service closings.

 

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