Earn crypto passively with staking on the recently released service on Ledger. Ledger is a company that develops security and infrastructure solutions for cryptocurrencies as well as blockchain applications for individuals and companies, by leveraging proprietary technology. Tezos has been used to power the staking mechanism.
When staking, you can earn a passive income by participating in the Tezos network via delegation. The current annual yield on Tezos is around 6%, minus a validator’s fees. You can use Staking Reward’s calculator to estimate your monthly earnings. When you first start delegating, it will take roughly five weeks for you to receive your first rewards from your validator. After this, you can expect rewards about every 3 days.
“Ledger offers users more control over staking: Unlike on exchanges where users are giving up their rights to choose who to delegate to, by using Ledger Live you are able to select from a wide list of validators based on your own preferences,” said the press release.
Why stake Tezos assets
In Tezos, the current consensus mechanism is known as Liquid Proof-of-Stake (LPoS). Token holders can delegate their validation rights to other token holders (called validators) without transferring ownership of their tokens. Contrary to other DPoS protocol, in Tezos you delegate your whole account.
When delegating, your XTZ are completely liquid. You are free to move your tokens anytime as there are no freezing periods when delegating to a validator.
There are no direct risks of delegating XTZ. The only risk you take is not earning the potential rewards. Carefully choose your validator to ensure quality of service and rewards.
What is Staking?
Staking is the process of holding funds in a cryptocurrency wallet to support the operations of a blockchain network and, in return, holders are rewarded for their contribution. This can be compared to earning interest in a traditional bank.
Tezos is a multi-purpose blockchain which uses a Proof-of-Stake protocol to secure its network. Token holders can delegate their accounts to a validator, who will be in charge of securing the network on their behalf. The user may then earn the rewards generated minus validator’s fees.
How long do I need to wait before receiving rewards?
You will have to wait roughly five weeks for your first rewards.
• It takes 21 days (7 cycles) until your XTZs are eligible to earn rewards
• Then you need to wait another 15 days (5 cycles) until they become liquid and can be paid out.
• After the initial waiting period of five weeks, you can expect payout every cycle (~ 3 days).
What the difference between mining & Baking?
The difference between Bitcoin & Tezos is that the validation capacity depends on the amount of delegated tezos and not on the hardware calculation power like Bitcoin mining process. Earn crypto passively with staking on the Tezos blockchain.
Different ways to earn Tezos rewards:
Delegate your staking power:
Tezos token holders who are not interested in being a baker themselves can “delegate” their tokens to a validator to bake on their behalf. When performing a delegation operation, you only send your baking rights to a validator: your XTZ stay on your wallet and remain yours. As you retain ownership of your assets, you can keep your XTZ on your hardware wallet while staking via delegation. This is the best way to keep your assets safe.
Baking on your own:
You can bake on your own by setting up a node and having at least 8.000 XTZ (8.000 XTZ is called a « roll »). Baking yourself requires you to run a Tezos node, a baker & endorser client. You should have a reliable Internet connection and high-availability servers. The more delegated funds a baker receives, the greater the chance it has to produce blocks and earn rewards.