How much can you earn by staking your Cosmos (ATOM)?
What is Cosmos (ATOM)?
Cosmos is an ecosystem of blockchains that can scale and interoperate with each other. The goal of Cosmos is to create an internet of blockchains – a network of blockchains that can communicate in a decentralized way.
Cosmos allows individual blockchains to maintain sovereignty and process transactions quickly while also communicating with other blockchains in the ecosystem. It is an open source community project initially started by the Tendermint team.
The Cosmos network was founded by developers Jae Kwon and Ethan Buchman in 2014, who at the time created Tendermint. the consensus algorithm that would go on to power the Cosmos network. The Interchain Foundation, a Swiss non-profit that funds open-source blockchain projects, helped to launch and develop by the Cosmos project.
Each new independent blockchain or “zone” created within Cosmos is tethered to the Cosmos Hub, a proof-of-stake blockchain which maintains the state of each zone. The ATOM token powers the Cosmos Hub and is used to maintain interoperability between all zones in the Cosmos Network.
What is ATOM staking?
Since the Cosmos Hub is a proof-of-stake blockchain, users holding ATOM tokens can earn staking rewards in exchange for using their holdings to secure the blockchain. Staking is the process of locking up your ATOM tokens to provide economic security to the Cosmos Hub blockchain. Through the process of staking, the Cosmos ecosystem ties its security to the honesty of the majority who are incentivized as token holders to maintain the integrity and value of the Cosmos Hub.
How do I stake my ATOM?
To earn staking rewards with the Cosmos network, you must first buy ATOM tokens from an exchange and then choose a validator to delegate your ATOM tokens to. Validators are special full nodes that take part in the consensus algorithm to collectively add blocks to the blockchain. Some crypto exchanges like Coinbase offer staking services directly on their platform, so you can earn a yield on your ATOM tokens without transferring it off of the exchange.
Coinbase is the top US-based crypto exchange and offers buying/selling and staking of your ADA all in one place.
Alternatively, you can transfer your ATOM from your exchange to one of the many ATOM wallets and then from your wallet you can choose a validator to delegate your ATOM to.
