The NEAR Protocol stands out as a user-friendly, efficient, and scalable Proof-of-Stake blockchain that enables the efficient development of decentralized applications. Its unique design simplifies the lifecycle of dApp development and management, thereby promoting community-led innovation on a global scale. NEAR is dedicated to making the power of blockchain technology accessible to everyone.
In this guide, we will provide a comprehensive, step-by-step breakdown of how to stake NEAR tokens. Additionally, we will explore the various wallets compatible with the NEAR Protocol. Understanding these aspects will empower you to participate fully in the NEAR ecosystem and gain the most from your NEAR tokens.
What is NEAR staking
NEAR Protocol utilizes a Proof-of-Stake (PoS) consensus mechanism, which enables token holders to earn rewards by staking their tokens. Staking involves committing tokens to the network, enhancing the security and integrity of the blockchain while rewarding token holders for their participation.
The distinct feature of the NEAR Protocol is its proprietary PoS consensus mechanism known as Nightshade. Nightshade is designed with the core objectives of enabling dynamic scalability and stabilizing transaction fees, thus enhancing overall network efficiency.
Nightshade innovates on the traditional sharding model (a method of splitting the blockchain into smaller parts, or "shards", each capable of processing transactions and smart contracts). Instead of operating shards independently, it works on the principle that each shard collaborates to produce data "chunks". These chunks collectively form a single block in the blockchain. Importantly, the production of blocks is maintained at a steady pace, irrespective of whether every individual shard has created its chunk for the particular block height (a specific location in the blockchain). This unique approach allows for seamless and efficient block creation, improving the performance of the NEAR Protocol.
What is NEAR Protocol
NEAR is a decentralized development platform that uses a Proof-of-Stake (PoS) consensus mechanism and plans to implement a sharded architecture for increased transaction speed and volume. A sharded architecture is a type of database design principle in blockchain technology where the data is broken up into smaller pieces known as "shards". NEAR Protocol offers unique features that assist developers in transforming systems and crafting innovative dApps.
NEAR's primary goals include addressing certain challenges posed by other platforms, namely:
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Low throughput: This refers to the limited number of transactions a system can process per unit of time.
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Slow speeds: Many blockchain platforms face issues with slow transaction processing times.
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Poor cross-compatibility: The ability for different systems to interact seamlessly is often lacking in existing platforms.
NEAR's blockchain employs a novel consensus algorithm and a sharding architecture to boost performance and achieve higher throughput.
Today, NEAR is positioned as a Blockchain Operating System, which allows for smooth, one-time user onboarding. It eliminates common pain points, such as needing to create new accounts for each different application, while enhancing development with a library of over 1,800 components.
To find out more about the NEAR Protocol, how it works, and what makes it so unique, read our article about NEAR and how it makes developing blockchain applications simple and efficient.
How does NEAR delegation work
NEAR delegation is a way for all NEAR token holders to participate in network security, earn rewards, and influence the NEAR community, even if they do not run a validator node themselves. Here's a simplified explanation:
- Staking and Validators: In the NEAR Protocol, users can stake their NEAR tokens, meaning they can lock them up in the network to participate in transaction validation, which helps secure the network. Validators are the nodes in the network that produce new blocks and validate transactions. They are selected based on the amount of NEAR tokens they have staked.
- Delegation: Not all users have the technical capacity or desire to run a validator node. That's where delegation comes in. Delegation allows NEAR token holders to 'delegate' their tokens to a validator. In other words, they lend their tokens to a validator who stakes them on their behalf. This way, even if you don't run a validator node yourself, you can still participate in the network's PoS consensus mechanism.
- Rewards: Validators earn rewards for their services in the form of newly minted NEAR tokens. When a user delegates their tokens to a validator, they share in these rewards proportionally to the amount they have staked.
- Security and Decentralization: By encouraging users to stake or delegate their tokens, the NEAR Protocol ensures the network remains secure and decentralized. The more tokens staked, the more secure the network becomes, because a potential attacker would need to acquire a significant number of tokens to attempt a network attack.
- Community Involvement: Delegation also encourages NEAR token holders to stay involved in the community. By choosing which validators to delegate their tokens to, users can influence the direction and security of the network.
Near tokens explained
The NEAR token is the fundamental asset of the NEAR ecosystem, and it's accessible to all users. It serves as the engine for economic coordination among all network participants and facilitates unique functionality within applications built on the NEAR network.
NEAR as the Native Utility Token
NEAR is the native utility token of the NEAR ecosystem, playing a crucial role in its operations.
Genesis and Supply of NEAR Tokens
At the creation or 'genesis' of the NEAR blockchain, 1 billion NEAR tokens were minted. A large portion of this initial supply is under a long-term lock-up agreement.
Network Support and Inflation
Each year, to sustain the network, an additional 5% of NEAR tokens are introduced. Of this, 0.5% is allocated to the NEAR treasury, while the remaining 4.5% contributes to the annual inflation rate. This inflation rate represents the rate at which new tokens are minted to compensate the network operators, also known as validators.
Usage of NEAR Tokens
Primarily, NEAR tokens are used to cover transaction fees and serve as collateral for data storage on the blockchain. Several stakeholders within the blockchain ecosystem are rewarded with NEAR tokens for their contributions.
Rewards for Validators
Validators, who maintain the network and validate transactions, receive a reward in NEAR tokens for their services. Every epoch, which is a set period, validators receive a reward equivalent to 4.5% of the total NEAR supply, calculated on an annual basis.
How to stake Near
What do you need to start staking Near
Before you can start staking NEAR, the first step is to ensure that you have a wallet where you can store the tokens. Below you will find some of the widely used wallet options available for staking NEAR. You can select the wallet that best aligns with your requirements and preferences.
Once you have decided on a wallet, the next step is to deposit your NEAR tokens into it. You can either purchase NEAR tokens directly within the wallet app using your bank card or utilize the built-in exchange functionality to swap other tokens for NEAR.
After successfully depositing your NEAR tokens into the chosen wallet, you are all set to embark on your staking journey.
A step-by-step guide to stake Near
Step 1: Choose Your Wallet
To start, you need a wallet that supports NEAR staking. For this guide, we will use the NEAR Wallet.
How to Create a Wallet
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Visit the NEAR Wallet website or download the mobile app.
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NEAR Wallet was designed for simplicity, featuring a flexible account model and human-readable accounts. This means you can choose any username instead of a random sequence of letters and numbers.
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During the setup, you'll be provided with a seed phrase. Be sure to write it down and keep it in a secure location.
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Finally, deposit at least 2 NEAR tokens to your new wallet address, and it will be ready for use.
Step 2: Select a Staking Pool
The next step is to select a staking pool, also known as a validator, who will stake your tokens on your behalf and distribute your rewards.
How to Choose a Validator
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Open the staking section by clicking on the Staking tab.
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When choosing a validator, it's crucial to select one with a good reputation, maintained by a professional team.
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Monitor the validator's uptime, check if they have enough staked NEAR tokens to avoid being removed from the validator set, and confirm they regularly update their node. This information can be found on the NEAR Explorer and Nearscope Explorer.
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One example of a reliable validator is Everstake. At Everstake, we regularly update our delegators about any changes, ensuring they receive their rewards on time. Our team is readily available on Discord, Twitter, or Reddit for any staking-related inquiries.
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After careful consideration, choose your preferred validator from the list, input their name (for instance, 'everstake.poolv1.near' for Everstake), and confirm that you agree with their fee structure. You're now set to start staking your NEAR tokens!
Step 3. Delegate
Choose the amount of tokens you want to stake (or choose the “Max” option). Once you’ve selected a validator and entered the NEAR amount you wish to delegate, proceed to confirm the transaction.
Step 4. Get rewards
By default, rewards in Near are auto-compounded, implying that they get included in your staking balance every epoch. You can withdraw your rewards as soon as the “Withdraw” option is available. However, you’ll need to wait a certain amount of time for security reasons before withdrawing (approximately 52-65 hours).
Pros and Cons of Near staking
Advantages of Staking NEAR Tokens
Security and Fraud Prevention
One of the key strengths of NEAR's staking mechanism is its innate security and fraud prevention system. Validators, or the operators of nodes, participate in a process called "Proof-of-Stake." They voluntarily lock up a portion of their NEAR tokens as a type of deposit, which they risk losing if they're found to have acted inappropriately or maliciously. This principle is designed to deter fraudulent behavior. The idea is simple: as long as validators stand to lose more from their deposit than they could gain from acting dishonestly, they have no incentive to cheat.
However, the question remains: could a validator cheat their way to more than they risk? This is one of the crucial concerns within the Proof of Stake system. It's a topic worth exploring further, and industry expert Andreas Antonopoulos offers some valuable insights into this matter.
Disadvantages of Staking NEAR Tokens
Unbonding Period
A potential drawback of staking NEAR tokens is the unbonding period. This is a set period during which staked tokens cannot be moved or transferred. This limitation can pose a challenge for users who wish to stake their tokens but also engage in other DeFi activities.
In the context of NEAR staking, the unbonding period serves as a safety measure to prevent sudden, large-scale unstaking, which could destabilize the network. Nevertheless, users should carefully consider this aspect and how it aligns with their overall crypto strategy.
Where to stake NEAR
The two main ways of staking Near is through wallets and exchanges. However, staking NEAR through wallets is considered more secure as your funds remain in your full custody.
Staking NEAR using a crypto wallet provides a higher level of security compared to staking on cryptocurrency exchanges. This is because your private keys, which are used to log into your wallet, are not stored on a third-party server (exchange). Instead, you have full ownership and confidentiality, ensuring that only you have access to your assets. Our comprehensive article about Near Protocol wallets provides detailed information.
Below you'll find a detailed overview of wallets where to stake NEAR.
Near Wallet for NEAR staking
The NEAR Wallet is a non-custodial, web-based wallet for the NEAR blockchain. Users can access the NEAR DeFi ecosystem, send and receive NEAR or NEP-141 tokens. This simple and convenient wallet allows users to manage, store, and stake NEAR assets.
Our guide:
Near Mobile Wallet for NEAR staking
NEAR Mobile is a simple, secure and convenient wallet developed by Peersyst. NEAR Mobile allows you to manage and import multiple accounts on your phone, giving you the much needed control and flexibility over your assets all the time.
Our guide:
My Near Wallet for NEAR staking
The MyNearWallet is a simple and secure wallet covering all primary functions, such as storing, transferring, and staking NEAR tokens.
Our guide:
Sender Wallet for NEAR staking
The Sender Wallet, a non-custodial wallet built on NEAR, delivers a user-centric and unique product that grants users complete control of their private crypto keys and does more than hold their assets.
Our guides:
Nightly Wallet for NEAR staking
The Nightly Wallet is a multi-chain wallet currently working on NEAR and Solana. It allows you to send and swap tokens and display NFTs, all in a single place. Nightly has already been integrated into the NEAR Wallet Selector.
Our guide:
Math Wallet for NEAR staking
Math Wallet is a feature-rich cryptocurrency wallet available on mobile and web platforms. The wallet supports over 150+ cryptocurrencies. Math Wallet users can store and transfer cryptocurrencies, plus delegate them in order to receive staking income.
Our guide:
Meteor Wallet for NEAR staking
Meteor Wallet was founded by an all-star team that has equally founded top-notch projects like Near Tinker Union and Enleap Near on NEAR Protocol. Meteor is a simple and secure wallet: everything is encrypted, and nothing sensitive is logged. The wallet allows users to collect NFTs, access DeFi, and explore everything Web3.
Our guide:
Omni Wallet for NEAR staking
Omni is a full-service, self-custody cryptocurrency wallet, which makes it seamless to stake various tokens, manage assets cross-chain, and collect and display NFTs. This next-generation cryptocurrency wallet is currently available on mobile for iOS and Android, making it incredibly simple for Web3 users to manage their cryptocurrency portfolios directly from their mobile devices.
Our guide:
Moonlet Wallet for NEAR staking
Moonlet is a convenient multi-currency mobile wallet designed based on taking into account the specifics of each platform specifically for NEAR holders and a number of other blockchains. The wallet supports the storage, transfer, and staking of NEAR (Near Protocol) tokens.
Our guide:
Opto Wallet for NEAR staking
The Opto Wallet is a mobile wallet for the NEAR Protocol and the Octopus Network. It is a secure, open-source, and non-custodial wallet that allows users to transfer and stake their NEAR tokens.
Our guide:
Ledger Live for NEAR staking
Ledger Live is a platform to buy crypto, stake your assets, and manage NFTs. It functions as a secure gateway to the crypto ecosystem. The Ledger Live app allows you to manage and transact different tokens. In addition, you can grow your crypto using the staking and lending process available at the Ledger Live app.
Our guide:
Why stake NEAR with Everstake
Staking enables token holders to generate passive income by holding their tokens in their wallets. However, acting as a validator - a node that verifies and includes new transactions into blocks - is technically demanding, requiring proficiency in secure IT systems and cryptography. The security and stability of the network, crucial to staking profitability, rest on validators' shoulders.
Everstake, a trusted validator serving over 625,000 users across more than 70 blockchain networks, bridges this technical gap. Our team's dedication extends beyond staking; we are committed to fostering the development of various cryptocurrency projects and enhancing the ecosystems we support. We believe in the value of a robust blockchain community and take pride in our active role within it.
Choosing Everstake as your staking partner means benefiting from our team's expert knowledge, commitment to superior results, and our unwavering priority of client fund security. Stake with Everstake to potentially amplify your yields, secure in the knowledge that your tokens are in reliable, competent hands.
NEAR staking FAQs
What’s the best place to stake NEAR?
Opting for wallets as a means of staking is widely regarded as a safer choice due to the inherent control it affords over your funds. By staking via wallets, you gain the ability to select your preferred validator, which comes with a multitude of advantages surpassing those offered by exchanges. These advantages include heightened security measures, the potential for increased rewards, and enhanced flexibility in managing your staked assets.
How much NEAR do you need for staking?
There are no limitations.
Is staking crypto safe?
The process of adding your tokens to a validator's stake weight is referred to as "delegating" your tokens. It's crucial to understand that this act of delegation does not transfer ownership or control of your tokens to the validator. You maintain full control over your staked tokens, even after they have been delegated. This ensures that you have the ultimate authority and decision-making power over your assets, providing you with peace of mind and security in the staking process.
Can I stake NEAR with Everstake?
Certainly! If you're interested in earning passive income and contributing to the security and reliability of the Near blockchain, staking your NEAR tokens with Everstake is a great option. To get an idea of potential rewards and explore different staking methods for NEAR with Everstake, you can visit our dedicated page on the website.
By choosing Everstake as your staking service provider, you'll receive personalized support and exclusive benefits, especially if you're delegating a significant amount of tokens. Staking with Everstake ensures a seamless staking experience while actively participating in the growth and safeguarding of the NEAR Protocol.
