The financial services sector these days is particularly fuelled by blockchain tech and cryptocurrencies. If you ever took an interest in investing and state-of-the-art passive income strategies, it’s high time to explore new goods this market offers. ATOM staking, which is often referred to as Cosmos staking, is one such product.
This extensive overview will tell you everything about how to stake ATOM (a popular cryptocurrency) and where to stake ATOM to earn tempting Cosmos staking rewards. So, without further ado, let’s get into it.
What Is Cosmos (ATOM) Staking
Before you get down to ATOM staking, it’s crucial that you understand what staking is. Essentially, the backbone of every blockchain is its consensus mechanism. This mechanism is what helps a group of peers — nodes — reach an agreement about which data is considered valid and should be added to the blockchain. On top of that, consensus ensures the security of the chain.
One such consensus mechanism is called proof-of-stake (PoS). In blockchains with PoS, anyone can lock their crypto assets for a specified period to help support the operation of the network. For this activity, so-called validators – dedicated actors providing network performance by staking their tokens – get rewarded with more crypto.
Cosmos Hub is one of many networks operating on a PoS consensus mechanism. If you want to participate in Сosmos staking, you must hold some tokens on your balance.
Cosmos highly relies on a set of validators to maintain network security and keep a full record of all historical activity on the blockchain in transactions that group in blocks. Though validators are an irreplaceable part of the ecosystem, they aren’t the only ones who can earn Cosmos staking rewards. But more on that later.
What Is Cosmos ATOM
First mentioned in 2016, Cosmos Network is an open-source blockchain project aiming to connect other blockchains to each other. The main idea lies in establishing an easily usable, fast, interoperable, and low-fee hub for any use of blockchain technology. ATOM is the primary token powering Cosmos Hub (yes, Cosmos Network and Cosmos Hub aren’t one and the same).
The foundation for the development of Cosmos was laid in 2014. Back then, Jae Kwon got inspired by the research on Proof-of-Stake consensus and invented Tendermint Core, an innovative blockchain consensus engine known as “Byzantine Fault Tolerance” (BFT). Cosmos Network emerged from Kwon’s technological findings and is now built on the Tendermint PoS consensus algorithm.
Put into layman’s terms, Cosmos Network is a decentralized ecosystem of parallel blockchains functioning independently of one another. This happens under the hood of a single community project to become “the Internet of Blockchains.”
Now you may be wondering how Cosmos Network could possibly achieve this ambition. If the Internet is a network of networks communicating with each other, how can one make blockchains do the same?
The answer lies in four words: Inter-Blockchain Communication protocol, or IBC for short. The IBC works like a communication standard for a decent part of the Cosmos-based blockchains united by Cosmos Network.
Essentially, the IBC allows for native cross-chain messages to pass without any limitations or security risks. With IBC, chains can freely transfer assets and exchange various data types.
The team behind Cosmos Network also created the Cosmos SDK framework. This framework makes it as easy as ABC for developers to build secure blockchains quickly. All chains built on Cosmos SDK can exchange value and data quickly & efficiently.
Note. A distinctive feature of the Cosmos ecosystem is its modular architecture, proposing Hubs and Zones as two separate blockchain classes. Zones are regular digital ledgers, while Hubs are chains designed to connect Zones. Cosmos Hub, with ATOM as its native token, is the first Hub blockchain launched within the Cosmos Network.
How Cosmos ATOM Staking Works
Now that you know the fundamentals, let’s clarify how ATOM staking works. The core elements of the Cosmos staking process are validators, delegators, and the security algorithm.
To put it briefly, ATOM staking is when you deposit your ATOM tokens and allow the Cosmos network to lock them for a certain period. While your tokens are locked, they directly contribute to the chain’s performance, and the network is more decentralized. Therefore, it’s more secure.
The Cosmos Hub is interested in maintaining a high level of security, which is where staking incentives come from. You’ll need to operate a node to start staking directly in this blockchain and become a validator. However, you can also join someone who’s already running one, delegate your ATOM to them, and pay a small commission for a fuss-free staking experience.
Validators Explained
As mentioned above, the Cosmos Hub chain is based on Tendermint. By running full-fledged nodes to add new blocks to the blockchain, validators also participate in this consensus protocol.
Before updating the data and the state of the digital ledger, validators verify the transactions included in each new block. It’s their responsibility to ensure only valid transactions pass through. Such efforts are exactly what node operators receive token rewards for.
The network maintains security in a decentralized way while devoted network participants earn incentives—it’s a win-win! However, active Cosmos validators are determined by the total number of ATOM consisting of their own staked tokens and given by delegators who have delegated them.
Now you may be wondering how to stake ATOM without puzzling over the requirements of setting up a full-fledged node. Well, it’s possible if you choose to become a delegator.
Delegators Explained
The role of delegators in the life of the Cosmos network is pretty self-explanatory—they delegate a certain amount of ATOM tokens to validators for use in the consensus mechanism and provide blockchain’s performance. Validators then share cosmos staking rewards earned by operating the nodes, taking usually a moderate commission for that.
To become a delegator, the ATOM token holder must acquire some ATOM and place them into a Cosmos-compatible wallet like Exodus or an exchange account supporting staking functionality. The staking process should be initiated by specifying the number of ATOM to be delegated to a specific validator selected from the list.
Note that validators can apply any commission on the revenue before distributing it among delegators. To be fair, it’s a well-deserved payment for the provided services and is needed to maintain the validator’s infrastructure up to the mark. Still, it doesn’t apply to validators with commissions going up to a shocking 100%.
As the validator’s total stake increases, so does its weight (i.e., voting power) in the blockchain. This measure is critical as it indicates the level of trust delegators have for designated validators and impacts how often this validator could be selected for producing a new block (the more voting power, the more probability).
You see, the validator’s total stake is impossible to counterfeit. This is because it’s calculated by adding up a self-delegated chunk (tokens of the validator) and the stake delegated by other token holders and regularly recorded into the blockchain. The takeaway? Validators at the top of the rating by total stake will always be the most reputable for delegators.
Security algorithm
As the Cosmos Hub is Tendermint-based, it can tolerate up to 1/3 of so-called Byzantine participants. In other words, the network will continue running even with 1/3 of faulty nodes (part of which can be malicious) while the rest do their work by computing and replicating the same state for a transaction. This demonstrates an extremely high level of security.
However, Tendermint’s stunning performance doesn’t completely eliminate the risks associated with ATOM staking. You can still be exposed to vulnerabilities even if you choose a reliable Cosmos wallet. Keep reading to learn more about such risks and the foolproof ways to avoid them.
How to stake Cosmos ATOM
Since you’re more Cosmos-savvy, it’s time to finally get down to the details of how to stake ATOM. Ready to find out what equipment may come in handy?
What do you need to start staking Cosmos ATOM
A straightforward and beginner-friendly way to hit the ATOM staking road is to create a Cosmos wallet with built-in staking functionality. Such wallets have intuitive designs to help you move along smoothly, and they don’t expose or transfer your assets to any third parties. You’ll find a brief overview of the most widely used Cosmos wallets in this article’s “Where to stake Cosmos ATOM” section.
Once your Cosmos wallet is ready, deposit as much ATOM to it as you wish, but no less than the minimum required by your wallet. The easiest ways to obtain ATOM are the following:
A step-by-step Guide on Staking Cosmos ATOM
The practice of ATOM staking is pretty easy to follow, even if it’s an entirely novel concept. As a rule, only four main steps are involved in the process, so let’s get into them immediately.
Step 1. Pick a convenient wallet
With many competing platforms and wallets supporting Сosmos staking, you can go for one or multiple services with the most enticing offers. When choosing where to stake ATOM, make sure to weigh up all the available options. Usually, Cosmos-compatible wallets differ in the number of tokens and chains they support, the minimum required ATOM staking amount, and the devices they provide software for.
Step 2. Select a Trustworthy Validator
ATOM staking requires you to chip into the total stake operated by a validator. You’re going to trust the validator with your money. Therefore, you should choose them very carefully.
As mentioned above, the rule of thumb is that validators with the most voting power are considered reputable. Still, a validator’s place in the general rating shouldn’t be the sole factor you’ll base your final decision on.
Staking ATOM in any Cosmos wallet inherently comes with its risks. The validator may misbehave and suddenly go offline or try to double-sign the same transaction with malicious intent. As a result, your tokens can be partially slashed without the possibility of recovering. Before delegating your coins, read through our dedicated article about crypto staking risks.
To avoid playing the hit-or-miss game, you can choose Everstake as your validator. The company is trusted by 625k+ users and manages over $6.2 billion in staked assets, which accounts for Everstake’s solid reputation.
However, if you want to research your validator thoroughly, here’s a list of the key metrics to look out for.
Step 3. Delegate Your ATOM
Once you’ve laid your eyes on a well-respected validator, select them from the list. From there on, enter the amount of ATOM you want to stake, and click “Delegate.”
After that, your coins will be delegated to the chosen validator. Bear in mind that staking will lock your funds. As soon as you decide to unstake your tokens, you’ll have to wait for 21 days until they unbond, and then will be available for use.
Step 4. Earn and Redeem the Rewards
That’s it; now you have the green light to sit back and relax while your rewards accrue. Just as Сosmos staking rewards rise to your desired amount, feel free to claim them. You can spend this money however you like or reinvest it to receive even more revenue.
Pros and Cons of Cosmos ATOM Staking
ATOM staking is associated with a few inherent drawbacks, despite offering lucrative rewards. So, we invite you to look at both sides of the crypto coin (pun intentional) and make an informed ATOM staking decision.
Pros of Cosmos ATOM Staking
Cons of Cosmos ATOM staking
Where to Stake Cosmos ATOM
The market offers a rich diversity of platforms with various ATOM staking conditions, but the common ones are wallets and exchanges. Below is an overview of widely used options where to stake ATOM.
Wallets for Staking Cosmos ATOM
Versatile non-custodial crypto wallets are the favorites of experienced crypto users since they give you complete access to your funds and private keys. Unlike wallets, cryptocurrency exchanges can’t boast the same level of security as they store user data on third-party servers.
If you live by the phrase “not your keys, not your coins,” then the following list of wallets supporting ATOM staking is for you.
Keplr is a non-custodial wallet that supports the core blockchain of the Cosmos Network — Cosmos Hub — and other blockchains built on Cosmos SDK. This wallet is a Chrome extension for your computer and a mobile application for Android or iOS.
With Keplr Wallet, you can send, receive, store, and delegate ATOM to validators in a few clicks. Besides, you can buy ATOM directly from your wallet with your credit card. Keplr allows you to vote on governance proposals, delivering changes to the chain. It’s an extremely popular wallet for interacting with the Cosmos Network due to its inbuilt IBC functionality, allowing one to fastly transfer tokens between Cosmos chains and connect to the wide range of Cosmos Decentralized applications. Click here to read a detailed guide on how to stake ATOM with Keplr.
Another advantage of using Keplr is an opportunity to enable automatic restaking of your rewards via special applications such as restake.app and yieldmos.com, which allow one to increase the total staking earnings by 2-4% per annum. The apps’ intuitive design allows one to do it in a few clicks.
Exodus is a great example of a visually stunning mobile, desktop, and browser wallet with advanced functionality and multicurrency support. It provides an intuitive user interface with built-in exchange and dApps access. On top of that, you can seamlessly earn staking rewards by delegating your ATOM holdings directly in the app. Read more about how to stake ATOM with Exodus in our dedicated article.
Guarda is a mobile multi-chain wallet with many advanced functions, including but not limited to in-app token exchange and ATOM staking. The wallet can be installed as a mobile, desktop, or web browser extension. You can download it directly from the App Store for iOS or the Google Play market for Android. Alternatively, you can install the app from AppGallery or as an APK file. Staking ATOM with Guarda will be a piece of cake for you after reading our guide on the topic.
The trust wallet built by Binance is a multi-coin non-custodial wallet that is available on both desktop and mobile devices. Support of 65 blockchains and amazing 6.5M tokens allows managing all your assets in one place. Being NFT compatible app allows you to upload NFTs directly to your Instagram. All transactions on your wallet can be tracked with notifications. Staking ATOM in this wallet is comfy and seamless.
ImToken is a wallet created to cater to various blockchain networks, which include Cosmos (ATOM), Ethereum (ETH), Bitcoin (BTC), Tezos (XTZ), and several others. Furthermore, the wallet supports eight stablecoins, which include USDT and USDC from Circle. Another noteworthy advantage of ImToken is that it provides access to ETH ecosystem Layer 2 protocols such as Optimism, Arbitrum, and zkSync. Users can use the wallet’s interface to manage, store, transfer, and stake their ATOM tokens.
Leap is a Web3-focused wallet that allows you to send, swap, store, stake ATOM, and switch between the Cosmos SDK chains. As of writing, you can download and install the wallet as the extension on your Chromium-based browser. If you want to start staking ATOM with Leap, check out our step-by-step instructions on how to do it.
Cosmostation is another non-custodial mobile wallet supporting multiple chains with the most significant features one may be looking for in a wallet. With Cosmostation installed on your device, it will be easy to receive, store, transfer, or delegate your ATOM coins to validators in exchange for Cosmos staking rewards. Before taking action, read our article How to stake Cosmos (ATOM) via the Cosmostation mobile wallet.
OMNI wallet is a new player in the market, promoting itself as a user-friendly entry point to the entire Web3. This mobile-only app is compatible with both IOS and Android operating systems. The product continuously evolves, with new tokens and features regularly added. Presently, OMNI wallet supports about 40 different cryptocurrencies, including for storage and staking purposes. To start staking ATOM via OMNI wallet, walk through our user guideline ‘How to Stake Cosmos (ATOM) using OMNI wallet’.
Rainbow is similar to other mobile wallets available on iOS and Android. Rainbow allows storing and transferring crypto assets across Cosmos and IRIS chains. Moreover, the Rainbow app allows you to stake ATOM to gain maximum profits. If you need a detailed explanation of how to stake ATOM with Rainbow, refer to our beginner’s guide.
Ledger is a hardware wallet that supports ATOM staking directly in the Ledger Live application. The distinctive feature of the Ledger Live app is that it’s available on many devices, such as Windows, Mac OS X, Linux, iOS, and Android.
The process of staking ATOM via Ledger is a bit more complicated than through the aforementioned non-custodial wallets. In this case, the trade-off between ease of use and installation time is acceptable due to the high-class security provided by the wallet.
The CoolWallet is a Web3 wallet that is protected by a hardware case that keeps your private keys offline, which means that it is impossible for your wallet to be compromised over the internet. It is an excellent tool for storing and staking various crypto tokens, including staking Cosmos ATOM.
This wallet stands out from other hardware wallets because of its advanced security features, such as biometric and physical verification, and a military-grade Bluetooth connection (AES 256). The private key is secured with EAL6+ secure element, which is an Evaluation Assurance Level for IT products. Additionally, all transactions, including staking, require a confirmation from the owner using both the hardware wallet and a smartphone, ensuring that only the owner has access.
Why Stake Cosmos ATOM with Everstake
Choosing a reputable validator is probably one of the most responsible stages associated with the ATOM staking process. If you already have a reliable staking platform in mind but are yet to dig through the list of available validators, look no further. Sticking to Everstake will save you tons of time on research and a bunch of money on commissions.
Everstake is equipped with high-performance servers, powerful hardware, and well-maintained software. It’s a trustworthy validator running 8,000+ nodes and serving 625,000+ unique users across 70+ blockchain networks, including Cosmos Hub. Everstake’s uptime remains at 99.99%, eliminating the risk of slashing due to going offline.
To start collecting revenue with Everstake, find and select it among other validators listed on the Cosmos staking platform of your choice. As another option, you can also copy & paste Everstake’s delegation address — cosmosvaloper1tflk30mq5vgqjdly92kkhhq3raev2hnz6eete3 — in the search bar.
Cosmos ATOM staking FAQs
1. What’s the Best Place to Stake Cosmos ATOM?
Cosmos-supported wallets are a great option for everyone to start their ATOM staking journey. This is because wallets have no control over your assets, so you always completely own your tokens.
Cosmos wallet will do the ATOM staking job perfectly. Besides, such wallets support delegating your ATOM to Everstake, which is in the top 10 of highly reliable validators. You can check the list of supported wallets here.
2. How Much Cosmos ATOM Do You Need for Staking?
While the Cosmos Hub blockchain itself envisages no restrictions in regard to the minimum ATOM amount for staking, which can be only 0.00001 ATOM (however, there is no economic sense with such a tiny delegation), exchanges and wallets can set such a limit on their own concern.
3. Is staking crypto safe?
The concept of staking itself is entirely safe, considering that your funds never leave your wallet — they simply get locked for a certain period.
Conversely, each step of the staking process is tied with risks. Hacks and security compromises don’t occur regularly, but it is advised to hold & stake your coins on multiple platforms simultaneously as a safety precaution.
4. Can I stake Cosmos ATOM with Everstake?
Yes, you surely can settle on Everstake to effortlessly start accruing Cosmos staking rewards with an APR ~20%. In exchange for such earnings, you’ll only need to pay a 6% commission on the revenue. Stake Cosmos with Everstake now and lay the groundwork for your passive income journey. To level-up the staking experience, Everstake designed an easy-to-go intuitive referral program, allowing delegators to earn extra rewards for staking ATOM.
