–Skip to the steps below if you’re looking to get down to business right away.–
Upfront catch so you don’t waste your time You need at least 25 AVAX tokens ($1,350 at the time of writing) to delegate your stake. You cannot stake AVAX for anything smaller than this amount.
Staking is a fantastic risk-free way to build your balances of the coins you’re holding. The only way to stake your AVAX coins is through the Avalanche Wallet UX. This is true even if you’re using a hardware wallet, which I highly recommend. Current staking rewards on Avalanche Wallet right now are averaging between 8 and 11%. This is double that of what you’d be able to get with Cardano or lending your ETH or BTC on platforms like BlockFi. These types of guaranteed returns are unheard of in the world of traditional finance! But there is a catch– the price of Avalanche (like other cryptos) is volatile. The coins you earn from staking could be worth much less tomorrow than they are today. But let’s be real- we’re all here because in this technology and what it can do for the world. I have a feeling that someday we’ll be looking back at this moment and gawking at how high the returns on staking were. As the asset class grows, the staking pools will become more saturated, and the APY will decrease. In 2021, only ~2% of the world’s population have adopted or invested in cryptocurrency. Imagine what prices would look like if that figure reached 10-20%! Einstein once stated that compound interest is the eighth wonder of the world. If you’re earning an extra 8-10% on an asset like Avalanche Coin that’s already going to appreciate a ton…….you get the idea. If you hold at least 25 AVAX tokens, I recommend staking it in one of the pools on the Avalanche Wallet. The time is going to pass anyway- might as well earn more with what you have. For each crypto that you hold, you need to be asking yourself how you can earn on top of that be it with lending or staking. Believe me- the difference it makes over time is unreal.
I’ve written an entire piece on why Avalanche is awesome and where you can buy it. Avalanche is one of the more undervalued smart contract cryptos right now- only $9 billion market cap. The Avalanche Consensus Protocol can run more transactions per second than Ethereum and Polkadot. Both of these competitors already have 10x the market cap. If you live in the US, the fastest and easiest way to buy AVAX that you can move off of an exchange to stake is through KuCoin. For most all other countries, AVAX is available via Binance.
Staking rewards & lockups
Avalanche staking is unique in that you’ll earn your first staking rewards exactly 21 days after you delegate your stake. There’s no guesswork about what epoch you actually joined in or when you’ll get paid like there is with Cardano staking. Lockup periods can differ, as you’ll see. Some nodes expire within a month- others in a year or more. Based on your investment time horizon (which should be long) you can choose which node you’d like to stake with.
Based on this 21-day period return shown above, I calculated that my APY would be around 8.8% if I continued staking for an entire year. Given this figure and that Avalanche is a top-20 coin that I think has massive growth potential, I think it’s a pretty good deal. Keep in mind smaller coins further down the list may have higher APYs (I know because I have staked them as well), but the smaller the coins are, the more violent the price swings are. If you earn 80% APY on a coin but that coin’s price drops 50%, you still have a really big negative return on your investment.
This tutorial will focus on the delegator part of staking, since while I know there are some whales out there, I’m assuming you don’t hold at least 2,000 AVAX ($100k+). Here are the steps for staking:
- Create a wallet on Avalanche Wallet’s web interface. You can ONLY do this by going to the proper url:
On the right-center side of the page, select Create New Wallet if you will not be using a hardware wallet to stake your AVAX and you have not yet made a software wallet with Avalanche Wallet. Hit Generate Key Phrase and write you phrase down in a safe place (or two or three!). Check the box for I wrote my phrase down in a safe location and hit Access Wallet. You’re likely to be prompted to enter some items from your key phrase. Do so and continue to your wallet.
Hardware Wallet (Nano S/X only at time of writing)
- Within the Ledger Live interface, go to Manager on the bottom left hand side of the home window and search for the Avalanche application and download the most recent version. This will make it so your Ledger device can interact with the Avalanche Wallet UX. Yes, your Avalanche private keys will still be stored on your hardware device and you’ll have to use your hardware device to authorize any transactions. Select Access Wallet on the Avalanche wallet homepage. When prompted on how to access your wallet, select Ledger. Your device will ask you a couple of questions about sharing your public keys. Scroll right on your device and hit Accept.
- Now you’re in your Avalanche wallet and you’re ready to move your coins there that you have purchased on Kucoin (if in the US or UK) or on Binance (most other countries). In the top right corner, you’ll see a QR image that will have your X-address underneath. Copy the address and use this on your respective exchange to send your coins to your Avalanche wallet. Like Ethereum, the network may take 5-10 minutes to confirm your transaction and the funds to appear in your wallet.
- This step is important: in order to stake your AVAX your coins need to be on the P-chain and not on the X-chain. If you’ve just sent your coins over from an exchange, it’s likely they’re still on the X-chain. Select Cross-Chain on the left side menu. Set the X chain as your source and P chain as destination. Set the transfer amount, minus a 0.002 AVAX fee. Keep in mind that you still need at least 25 AVAX on the P chain to delegate and earn rewards. Once you’ve entered your amount. Click Confirm.
- Now you’re ready to stake that stuff! On the left side menu click Earn. The menu option that says Add Delegator that was previously grayed out should now be visible since you have at least 25 AVAX on the P-Chain. Select Add Delegator.
- This next part is what trips a lot of people up- and that’s choosing the right validator node to delegate to. In general, here’s what you want:
- The ‘validator stake’ to have a high amount of coins staked
- The number of people in the staking pool to be low
- The end time is compatible with when you want to unstake coins or restake coins
- The fee is low
Based on these criteria, choose a node, and hit Select.
7) Enter the amount of coins you’d like to delegate, keeping in mind that the minimum amount is 25 AVAX. On the right hand side you’ll see how much you’ll earn in the next 21-day period based on the amount you entered. Hit Confirm. On the right side of the screen after a moment you’ll see a message saying Delegation transaction sent.
Now your coins are staked! It’s time to relax and watch some cat videos on instagram while your coins earn you extra money. Remember to please only invest in crypto what you’re able to lose and be patient- and HODL on. If crypto’s brief history has taught us anything, it’s that ‘to the HODLers go the spoils.”