Staking OSMO tokens opens the door to appealing rewards while also supplying trading pools with essential liquidity. Moreover, it empowers holders to participate in governance decisions — an approach that encourages people to actively participate and contribute to the development of the platform. This helps to build a sense of community and propels the Osmosis platform forward.
However, to start reaping the benefits of OSMO staking, it's crucial to learn how to stake OSMO tokens. In this guide, we'll outline the steps, beginning with a brief description of Osmosis, wallet installation, and then the staking process using the Keplr wallet.
What is Osmosis?
Osmosis operates as a decentralized exchange (DEX) and an Automated Market Maker (AMM) on the Cosmos SDK, enabling safe and direct cryptocurrency trading. It stands out for its cross-chain capabilities via the Inter-Blockchain Communication (IBC) protocol, which allows it to serve beyond just the Cosmos ecosystem.
Automated Market Maker (AMM)
The Osmosis AMM is a tool used in decentralized exchanges to set asset prices through mathematical formulas. Unlike traditional exchanges, which rely on matching buyers and sellers to determine prices, the AMM uses liquidity pools to facilitate trades and set prices. Liquidity pools on decentralized exchanges like Osmosis are like shared reservoirs where users deposit their assets. These pooled assets facilitate trades anytime, without needing a matching buyer or seller, as required in traditional exchanges.
Superfluid Staking
Superfluid Staking on Osmosis allows users to engage in liquidity pools and stake their Liquidity Provider (LP) tokens to blockchain validators concurrently. This dual participation enables users to earn rewards from both liquidity provision and staking, enhancing network security.
What is OSMO token?
OSMO is the native token of the Osmosis network, serving primarily as a staking asset to help secure the Osmosis blockchain. It operates under a Proof of Stake (PoS) mechanism, which characterizes it as an inflationary token. This means that over time, new OSMO tokens will be created and introduced into circulation. The total supply of OSMO tokens is capped at 1 billion.
What is Keplr wallet?
Keplr Wallet, designed for the Cosmos and Inter-Blockchain Communication (IBC) ecosystem, is a non-custodial cryptocurrency wallet where users retain full control over their private keys, enhancing security by eliminating centralized data storage.
By integrating with the IBC protocol, Keplr facilitates asset transfers and interactions among different blockchains, broadening interoperability and collaboration. Users can effortlessly deposit, receive, and stake assets like OSMO tokens, with a handy list of validators aiding in staking decisions.
Beyond these, Keplr offers a range of features, including staking for rewards, participating in blockchain governance, tracking transaction history, and conducting basic token operations. Its easy-to-use dashboard brings together all of a user's on-chain data, making it simpler to manage assets and interact with different blockchains and serving as a friendly gateway to the wider interchain ecosystem.
Why Stake OSMO?
Staking Osmo tokens on Osmosis allows users to control their assets, participate in on-chain governance, and earn an estimated Annual Percentage Yield (APY) of 9.96% on staking rewards. Osmosis also appeals to many due to its low transaction fees on staking products and the benefit of quick compounding without any lock-up periods, which is favorable for short-term holders.
Moreover, staking OSMO is an entry point to the wider decentralized finance (DeFi) arena, enabling users to delve into blockchain-based financial systems. Additionally, if the value of OSMO increases over time, the value of staked tokens could also rise, offering a combination of staking rewards and capital appreciation.
How to Stake OSMO via Keplr Wallet
In this section, we’ll provide the steps on how you can stake OSMO. However, let's begin by showing you how to download the Keplr wallet.
Step 1: Download The Keplr Wallet
Click Keplr Wallet extension to navigate to its page on the Chrome Web Store. Once there, click the Add to Chrome button. A dialog box will pop up, asking if you would like to add ‘Keplr’ as an extension. Confirm the installation by clicking Add extension.
Step 2: Create a Wallet
Step 3: Top Up your wallet
Once your Keplr wallet is set up, click on the option Buy on the main page. You will be redirected to a third-party platform (like Kado, Moonpay, or Transak) to top up your Wallet. Alternatively, you can fund your wallet by buying ATOM tokens from exchanges like Coinbase or Kraken, then depositing these tokens into your Keplr wallet. After you acquire these tokens, you can swap them for OSMO tokens.
One way of swapping your ATOMs for OSMO tokens is to use the Osmosis platform. But make sure you have Cosmos ATOM tokens first. Here is how to execute it:
Step 4: How to Stake OSMO
Step 5: Monitor your rewards
Monitoring your staking rewards on the Keplr wallet is a straightforward process. Here's how you can monitor your staking rewards on the Keplr wallet:
Osmosis Blockchain Explorers
Today, various tools known as Blockchain explorers can be used for navigating through blockchain networks. They provide a visual interface to track transactions, blocks, validators, and other on-chain activities. By using a blockchain explorer, you can obtain detailed information about the state and performance of a blockchain, including data like transaction histories of specific addresses, the status of individual blocks, and much more.
For the Osmosis blockchain, there are several explorers, each offering a unique set of features to enhance the user's understanding and interaction with the blockchain. Here are some of the notable explorers of Osmosis:
Mintscan
Mintscan, known for its user-friendly interface, provides a comprehensive overview of the Osmosis blockchain. It allows users to explore the latest blocks, transactions, and the current status of validators. It also provides statistical data like the total staked amount, voting power, and more, giving a well-rounded view of the network's health and activity.
Atomscan
Atomscan is another useful tool for exploring the Osmosis blockchain. It provides detailed information on transactions, addresses, and tokens. Users can also track the price of OSMO tokens in real time, making it a good platform for those interested in the financial aspects of the blockchain.
Ping.pub
Ping.pub has a specific focus on staking activities within the Osmosis blockchain. It provides insights into staking statistics, validator performances, and rewards distribution. Users interested in the staking aspect of Osmosis might find Ping.pub to be a valuable resource for managing their staking operations.
Summary
Staking OSMO tokens on Osmosis through Keplr Wallet is rewarding and opens doors to the wider decentralized finance realm. In this context, Blockchain explorers aid in demystifying on-chain activities, making it easier to track rewards and grasp network dynamics.
As Osmosis grows, engaging through staking and exploring blockchain activities enhances your experience. This active involvement in staking makes decentralized finance more approachable and allows you to contribute significantly to the network's security and governance, showcasing the decentralized ethos in action.
For any inquiries or updates, users can reach out to the Osmosis Blockchain Manager on X, ensuring a continuous flow of communication and support.
