It seems like Atomic Wallet is getting popular and everybody is loving it because of the ease of use, "security", and staking.
I don't love it, but I don't hate it. It's got some good stuff going but I got it only because I wanted to test Cosmos (ATOM) staking.
ATOM staking on Atomic wallet is very simple and 10% ROI is pretty good, and the value ATOM itself is decent in my opinion.
So I really wanted to try and see how it actually works.
Staking process and the UI are pretty intuitive so you really don't need a tutorial but they have a great staking guide so if you are interested, you should definitely check that out before staking.
Unlike Tezos staking, ATOM staking takes effect immediately so that you don't have to wait 35-40 days to start receiving staking rewards which I really like.
On the other hand, ATOM's unstaking process takes 21 days. Although you can unstake ATOM anytime you want like Tezos, they (Cosmos) will freeze the stake for 21 days before the funds become available in your wallet. Also during this period, you will not receive any ATOM. If I want to move my fund, I want it done right away so I don't love this feature.
There is always some sort of risk involved in dealing with cryptocurrency and ATOM staking is no different...
You could lose everything for staking ATOM 😱
Because Cosmos staking uses "Hard Slashing" model which means if they find any kind of fraud, violation, hack or validator goes down, staking fund gets slashed for punishment. The slashed stake gets burned so that worst case scenario, you could lose all your staking ATOM.
Validator is doing the actual work but the decelerators are also responsible and get penalized for their mistakes seem a bit unfair...
I think picking the right validator is the most important thing for ATOM staking.
10% reward for potentially losing all your staking investment sounds too much of a risk.
How does that actually happen?
Main slashing conditions are double signing and availability. (Intentionally or unintentionally, penalty is imposed)
Double signing: If someone reports on chain A that a validator signed two blocks at the same height on chain A and chain B, and if chain A and chain B share a common ancestor, then this validator will get slashed by 5% on chain A.
Downtime: If a validator misses more than 95% of the last 10.000 blocks, they will get slashed by 0.01%. (With an average block time of 5 seconds, a validator would need to miss 95% of the blocks over a period of 13 hours and 54 minutes.)
Whitepaper doesn't actually specify the penalty amount and there is a
ValidatorTimeoutPenalty (DEFAULT 1%) for being inactive.
But anyway, my point is that if your validator is "maliciously"? double signing every single block or their server explodes and gone for good then your ATOM will also be gone forever. Otherwise you might get slashed a little bit sometimes, but probably not the whole thing... that is my take from my little research.
When I stake something I just stake it and forget about it for a long time. That's how I HODL. I do not want to check the validator status all the time and then I get penalized here and there for whatever they did or didn't do sounds too high maintenance and not rewarding to me.
For that reason, I am slashing ATOM stake before I get slashed hard.
Who gets banned