If you’re looking for a guide on how to stake your Atom tokens on a Ledger hardware wallet, you’ve come to the right place! In this blog post, we will walk you through the process step-by-step. Staking your Cosmos (Atom) coins is a great way to earn rewards and support the network. Not to mention, it’s a lot easier than you might think! Let’s get started.
How does Cosmos stake work?
The Cosmos network is powered by a Proof-of-Stake (PoS) consensus mechanism, meaning that users can stake their coins to validate transactions and earn rewards. By staking you lock up your ATOM and can’t use those. Staking ATOM grants the right to vote on proposals and make decisions on the future of the network. Once the transaction is completed, You will start to get rewards in your atom wallet until you choose to unstake it. Note: Atom has a 21-day unstaking period for which you will not receive any reward and can’t use it as well.
Before staking ATOM, consider the following factors:
It is better to choose a validator with low voting power in order to maintain the decentralization of the network. It will not affect your rewards. Before staking, Check the % of commission as it will affect your rewards. 1-5% is a good choice according to me. Also, check for their hardware configuration and reputation. Be aware that, You may lose some part of your staked Atom if your validator does not behave appropriately. As of now, the ATOM yield is around 18% yearly.
Why Should You Use Ledger Hardware Wallet to Stake ATOM?
A hardware wallet is a cryptocurrency wallet that stores the user’s private keys in a secure manner. The private keys never get out of the device nor get connected to the internet and therefore less susceptible to hacks. Using a Ledger hardware wallet is the safest way to stake your ATOM. It also comes with a number of security features, such as a PIN code and Manual Buttons to approve transactions.
If you’re ready to stake your ATOM on Ledger Live, Let’s Do it step by step
How to install Cosmos Wallet and Add ATOM account on Ledger Hardware Wallet
Before we get started, you will need to have the Cosmos Wallet installed on your Ledger device. If you don’t have it already, you can find instructions on how to do that here.
- Connect your ledger Wallet with Ledger live then Click on My Ledger
- Approve The ledger Manager by Clicking Both the buttons on the ledger device
- Install Atom Apps by Searching Atom in the App catalog section
- Once the Cosmos Wallet is installed, Open the app on the Ledger and go to the Account tab. Click “Add account”
- Then Search for Atom and Click on Continue
- Open COSMOS App in ledger Then Add the account and Give it a Name, As I did “Cosmos-1”
To receive Atom on your ledger wallet, Click on Receive and Verify your wallet address with the ledger device. Then Send atom to the address.
How to Stake Cosmos(ATOM) with Ledger Live
Once you have ATOM in your wallet,
- Click on the Stake button below to your Cosmos Account Name balance and you’ll be taken to the stake page with a caution page, Click continue on that.
- Here, you can search for your preferred validator and the amount of ATOMs you want to stake. For Example, I choose SG-1
- Once you’re happy with your settings, click on the Continue button at the bottom of the page.
- Ledger Live will now generate a stake transaction and sign it with your Ledger Nano S or X.
That’s it. Your atom has been staked and accruing rewards as we speak. To claim your staking rewards open the stake page and select Claim rewards from the top menu. Click Continue at the bottom of the page and confirm the transaction on your Ledger device. Tada, Your rewards have been added to the balance.
What is Redelegation in ATOM?
If you want to change the validator you are delegating your stake to, this is called redelegation. The process is very similar to delegation, but on the stake page, you select Redelegate instead of Delegate. By doing this you are not losing any rewards but can change to your prefer or better validators of ATOM. There are 2 Rules you need to remember
- You can only redelegate from one validator to another validator up to seven times in a twenty-one-day period. This means that if you staked with validator X, you can only redelegate to validator Y up to seven times in a twenty-one-day period.
- Once you redelegate from a Validator to another Validator, you will not be able to redelegate those atoms to another validator for the next 21 days. Eg. you redelegate from Validator X to Validator Y, You can’t redelegate Validator Y to Z for 21 days. This means that the validator who receives a delegation will be on a 21-day cooldown period.
How to Redelegate Atom on Ledger Live
To redelegate your ATOM, open the stake page and select Redelegate from the top menu.
From here, you can search for a new validator and enter the number of ATOMs you want to redelegate. Click Continue at the bottom of the page and confirm the transaction on your Ledger device
How to Unstake ATOM on Ledger
- If you want to unstake your ATOM, open the stake page and select Undelegate from the top menu.
- From here, you can enter the amount of ATOMs you want to unstake and click Continue at the bottom of the page.
- Confirm the transaction on your Ledger device
Your ATOM will be unlocked after 21 days and you can use it as you want.
FAQs | Stake/Unstake COSMOS (ATOM) On Ledger
Here are some FAQs, related to Staking and unstaking Cosmos on Ledger Hardware Wallet
Q: Can I stake ATOM with the Ledger wallet?
A– Yes, Of course, Ledger Live, Native Wallet of Ledger support ATOM staking. In fact, Ledger has their own Validator. You can delegate to them as well. But they take a little bit more commissions.
Q: How much can I earn from staking my ATOM?
A- It’s 18% but It’s changeable. To get the latest APY you can check on Staking Rewards.
Q: How many ATOMs should I stake?
A-The amount you stake, the more ATOM you will get. The minimum amount to stake is 0.05 ATOM.
Q: When will I start earning rewards?
A- You will start to earn rewards on the staked amount instantly after the transaction get confirmed, usually 1-5 seconds.
Q: How often should you claim staking rewards?
A- You can claim whenever you want, but I prefer a weekly basis.
Q: Is Cosmos ATOM inflationary?
A-Yes, The annual inflation is capped at between 7% and 20%.
Q: What is COSMOS Inflationary model?
A-Every block, Atom recalculates its targeted annual inflation rate. The amount of inflation depends on the desired staking participation ratio, which is currently set at 67%. However, the annual inflation is capped between 7% and 20%. If more than ⅔ of Atoms are being staked, atom block rewards will decrease incrementally until it reaches a floor of 7% annualized inflation. On the other hand, if less amount of Atoms are being staked, atom block rewards will increase little by little until it hits a ceiling of 20% annualized inflation.
I hope this guide was helpful in understanding how to stake and unstake Cosmos on the Ledger hardware wallet. Staking is a great way to earn rewards and support the Cosmos network. Be sure to check out our other blog posts for more information on Cryptocurrencies.
If you have any questions, feel free to leave a comment below and I will try my best to answer them.