Did you know that you can stake coins directly from your Ledger hardware wallet? Read on to find out more
What is staking?
Proof-of-stake (PoS) is a consensus algorithm for blockchain networks that generates trust through randomly selected validators who stake their native tokens by locking them into the blockchain to produce and approve blocks.
Coins based on the proof-of stake protocol allow owners to stake as a validator, or through a validator, to earn rewards as a return on investment.
Where can I stake coins?
Coins can be staked though multiple platforms including dedicated staking platforms, custodial wallets on crypto exchanges (e.g. Binance), non-custodial hardware wallets and DeFi platforms.
Ledger Wallets allow you to secure your crypto assets by taking them offline and at the same time stake them through the Ledger Live user interface app for the Ledger Nano S and X hardware wallets. At present, you can stake seven crypto coins on Ledger. They are Polkadot (DOT), Tezos (XTZ), Algorand (ALGO), Cosmos (ATOM) and Tron (TRX).
What are the benefits?
Firstly, the Ledger hardware wallet allows you to take your crypto assets offline making them secure from online theft. Instead of coins sitting dormant in your wallets, you can earn rewards similar to earning interest on fiat (traditional currency).
Secondly, no additional steps are required. You can earn rewards directly in to your hardware wallet. You will get paid in the same coin at different percentages based on the type of coin, number of coins held, and length of staking period. The reward rate is determined by the protocol and sent to you through an on-chain transaction.
What are the risks?
Whilst Ledger Wallets allow you to stake your coins via Ledger Live, there may be risks associated with the platforms (validators) you select to stake upon. Further, the risks vary based on the coin type and the staking configuration of that particular coin. So be sure to check the credentials of the validators and review the Coin Wiki or Github pages to DYOR.
How do I stake coins on my Ledger Wallet?
Select the coin you want to stake and install the coin application on the hardware wallet and move the coins to the wallet. Ledger will give you access to a list of available validators, and allow you to chose your preferred validator.
For more information have a look at the following pages:
Get your Ledger Nano S here
Get your Ledger Nano X here