Staking Tezos (XTZ): A Step-by-Step Guide to Earning Double Rewards
Darius Baruo Jul 29, 2024 08:59
Learn how to stake your Tezos (XTZ) tokens and earn double rewards with this detailed, step-by-step tutorial.
Tezos Spotlight has released an in-depth tutorial guiding users through the process of staking their Tezos (XTZ) tokens to earn double rewards. This step-by-step guide is designed to help both new and experienced users navigate the staking process using the Tezos staking app interface.
Understanding Staking and Delegating
Staking and delegation are two key components of the Tezos Proof-of-Stake mechanism. While both actions serve to secure the network, they have different implications for users and bakers. According to Tezos Spotlight, staking allows users to earn double the rewards compared to delegating, albeit with some differences in terms of reward distribution, lockup periods, and slashing exposure.
Staking was introduced with the release of adaptive issuance following the Paris protocol upgrade. Delegation, on the other hand, has been available since the beginning. The main differences between staking and delegating include:
- Rewards factor: Staked funds accrue double the rewards of delegated funds before baker fees.
- Rewards recipient: Staked rewards are minted directly into the user's account, while delegated rewards go to the baker who then transfers them to the user.
- Lockup period: Staked funds are frozen for a specified period when unstaked.
- Slashing exposure: User funds might be subject to penalties if the chosen baker misbehaves, though such events are rare.
How to Stake Your Tez
To stake your Tezos tokens, follow these steps using the Tezos staking app interface:
1. Connecting Your Wallet
First, navigate to stake.tezos.com and connect your wallet. Supported wallets include Kukai, Temple, Trust Wallet, and Umami Wallet. Ensure you're on the correct URL and never share your private seed phrase.
2. Delegating Tez to a Baker
Before staking, you need to delegate your tez to a baker. If you're not yet delegating, select a baker from the list. If your current baker does not accept external stakers, you'll need to choose a new one. When selecting a baker, consider their staking capacity, free space, and fee percentage.
3. Staking Your Delegated Tez
Once your tez are delegated, you can proceed to stake them. Click on 'Stake,' agree to the terms of use, enter the amount of tez to stake, and confirm the transaction. Your tez will now be staked and earning rewards.
Unstaking Your Tez
To unstake your tez, click on 'Unstake' and submit your request. You must wait approximately 10 days (4 cycles) for your funds to unlock before finalizing the process. Confirm the operation in your wallet, and once the lockup period is over, you can start using your funds again.
For a more detailed description of the staking and delegation processes, including the implications for end-users and bakers, visit the official Tezos Spotlight guide here.
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