DeFi Staking 101: A Guide to Staking Crypto with Ledger
The Ledger Live app offers a secure and easy way to manage your cryptocurrencies with your Ledger device. Ledger Live stores your data on your phone or computer, requiring no email or password sign-ins.
Blockchain, learn
In the rapidly evolving world of cryptocurrency, staking represents a powerful shift towards decentralization, much like the move from traditional banking to peer-to-peer lending. Just as peer-to-peer platforms empower individuals by removing the need for a centralized bank, staking allows crypto holders to take control of their assets, participate in network security, and earn rewards without relying on centralized exchanges.
What is a staking reward?
Staking rewards are incentives given to people who participate in staking cryptocurrencies. This process helps secure and validate transactions on certain blockchain networks. In a proof-of-stake (PoS) system, validators are chosen to create new blocks and validate transactions based on the number of tokens they hold and stake.
By staking their tokens, participants support the network's security and consensus. In return, they earn staking rewards, usually in the form of additional tokens. These rewards motivate individuals to hold and stake their tokens, ensuring the network remains secure and trustworthy.
The amount of staking rewards can vary based on factors like the network's protocol, the number of tokens staked, and the staking duration.
Staking crypto involves locking up cryptocurrency in a blockchain network to help secure and maintain it. In return, rewards are earned in the form of additional cryptocurrency.
What is a validator?
Depending on the blockchain, a specific amount of cryptocurrency is required to operate nodes that validate transactions and secure the network. If you lack the necessary amount or prefer not to run a node yourself, you can delegate your crypto to a validator. The validator will pool the crypto, run the nodes, and share the rewards with you.
The difference between staking crypto on an exchange and using Ledger Live
When you stake your crypto with Ledger Live, you hold the private keys to your assets, giving you full control. This is different from staking on an exchange like Binance or Kraken, where the exchange holds the keys. With Ledger Live, you can choose the validator to delegate your crypto, a choice not available on exchanges. Additionally, you avoid the fees that exchanges charge for staking services.
Full control over your assets when staking with Ledger Live
When you stake through Ledger Live, you maintain full control over your assets. Even when you delegate them, you retain control of your private keys, which are secured by your hardware device.
One can withdraw their crypto whenever they want when staking with Ledger Live
You can unstake your crypto anytime with Ledger Live. However, some blockchain protocols have an unbinding period for unstaking and withdrawal, while others do not. Be sure to research the specific protocol before staking your crypto.
What is the Earn tab in Ledger Live?
The Ledger Live API’s dashboard's 'Earn Tab' displays various cryptocurrency earning options with detailed APY, minimum deposit requirements, and interactive 'Stake Now' and 'Deposit' buttons for easy investment management.
The Earn tab in Ledger Live lets you stake assets, track rewards, and find earning opportunities across different blockchains without using multiple platforms. In this section, you can easily view all your staked assets, assets eligible for staking, APR/APY, and earned rewards.
Disclaimer
Do not invest unless you are ready to potentially lose all the money you put in. This is a high-risk investment, and you should not count on any protections if things go wrong. CompoundY is not responsible for any losses or financial decisions based on our content. Conduct your own research and consult a financial advisor before investing. Our reviews of Ledger products are based on personal experiences and may include subjective opinions. Investing in cryptocurrencies and financial markets carries significant risks.
About the Author
Razvan Chiorean is a published author of compoundY and a cutting-edge researcher in quantum computing, AI-ML, and blockchain technology. Through his #AIResearch handle, Razvan continues to conduct research, blog, and educate, bridging cultures and inspiring technological progress while consistently sharing his findings and insights. He collaborates with leading tech companies, contributes to open-source projects, and is dedicated to fostering ethical standards and inclusivity in technology, ensuring a future where advancements benefit everyone.
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Unlike most apps, the Ledger Live crypto wallet app keeps your data directly on your phone or computer, so there’s no need to sign in using an email and password.