How to stake with Tezos, for example on Coinbase, Binance or other exchanges and platforms?
Tezos is a cryptocurrency based on Proof of Stake and allows users to earn money by simply depositing tokens and actively participating in the transaction validation process on the Tezos network.
However, it is necessary to use special platforms in order to earn money from simply holding Tezos (XTZ) tokens.
To earn interest through staking, a node must lock a number of tokens on the network. The possibility that the node is chosen to validate the next blockchain block is proportional to the number of tokens locked, hence the more tokens staked the more blocks it will validate.
When the node is called to validate a block, it will be rewarded with tokens once correctly validated, whereas if it approves an incorrect transaction it loses part of the locked tokens.
In theory, anyone can stake their own tokens, but from a technical point of view, it is not easy to do it independently, considering that it is necessary to install, configure and manage a node.
This is why there is the Delegated Proof of Stake (dPoS), which allows token owners to delegate the staking of their funds to a node.
Tezos staking on Coinbase and Binance
This service is offered by Coinbase, for example, but only to US customers, with the exception of those residing in the states of New York and Hawaii and only after completing the identity verification by providing a verified address and a social security number (SSN) or tax identification number (TIN).
It is very easy to stake XTZ on Coinbase because all it takes is to buy them on the exchange or deposit them in a wallet and leave them there.
This allows XTZ tokens to remain in the user’s Coinbase wallet at all times and can be used whenever required. Once an initial storage period is completed, as long as they remain unused on the exchange wallet, interest is earned every 3 days or so at an estimated annual rate of 5% which varies over time depending on the stake rewards distributed by the Tezos network.
Binance also offers this service, though also in other countries and with rewards calculated on a daily basis. However, the distribution of rewards only takes place on the 20th day of each subsequent month.
Another exchange that offers XTZ staking is Kraken, which offers a return at a fixed rate of 6%, with payments every Monday and Thursday.
However, to stake XTZ tokens on Kraken it is necessary to use a special procedure on the Spot Wallet that transfers the tokens to the staking wallet, from which it is also possible to exit quickly by transferring the tokens back from the staking wallet to the Spot Wallet.
Staking via Ledger
In addition to exchanges, there are also some wallets that allow staking XTZ.
One example is the Ledger hardware wallets. The current annual rate of return is around 6%, minus validation fees, but it takes at least five weeks to receive the first rewards. These are also paid out every 3 days.
To stake XTZ tokens with Ledger it is necessary to choose a validator, verify and confirm the delegation directly on the wallet.
Another wallet that allows doing this is the Trust Wallet, where the rewards are distributed every cycle. Unlocking the rewards requires 7 cycles, and each cycle is equivalent to 4,096 blocks, or about 3 days. Furthermore, it takes at least 21 days before the rewards are received.
In order to stake the XTZ tokens on Trust Wallet, it is necessary to access the Staking Menu, click on Stake to start the procedure, choose a validator, send the tokens and confirm the transaction.
To remove the tokens from the staking it is enough to click the Unstake button.
Staking Tezos is thus very simple, and there are several platforms that allow it.
Some of them also allow buying XTZ tokens by paying in crypto or fiat currencies, but it’s always advisable to store tokens on proprietary wallets, since storing them on third-party managed wallets doesn’t protect against hacking, violations or service closures.