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How to Stake ATOM in 2023
Staking cryptocurrencies is a way in which you can potentially generate passive income for yourself, while at the same time taking part in the development of your chosen blockchain.
Cosmos is an ecosystem of interoperable blockchains, apps, and services—and it is secured by staking its native cryptocurrency, ATOM.
In the article below, we will explain what staking is, how it works, and provide a guide on how best to stake ATOM in 2024.
Top ATOM Staking Platforms
What is ATOM Staking?
Staking represents a way for people to participate in the blockchain network. It’s a process where you “stake”, or “lock” a certain amount of a chosen crypto onto its blockchain. While the crypto is staked, or locked, you can only access it under certain conditions. Through staking you help secure and improve a network, by validating transactions being performed on it.
As an example, let’s consider ATOM, the cryptocurrency used in the Cosmos blockchain. To stake ATOM, you would need to hold a certain amount of it in a compatible wallet and delegate it to a validator or a group of validators. Validators are responsible for processing transactions on the network and maintaining the integrity of the blockchain.
By staking your ATOM, you are essentially contributing to the security and efficiency of the network. Validators require a certain amount of tokens to participate in the network, and the more they stake, the more likely they are to be selected to validate transactions. In return for staking, you can earn interest on your staked coin, in the form of more ATOM.
ATOM Staking Glossary of Terms
Block – A bundle of verified transactions that are linked up together to form a blockchain.
Stakeholder – An entity that holds and locks up a certain amount of cryptocurrency in order to participate in staking.
Validator – An entity that takes part in the staking process, responsible for validating new transactions.
Staking pool – A group of stakeholders that pool their resources together in order to increase their chances of being selected as a validator.
Staking Rewards – Extra crypto you gain by participating in the staking process.
Unstaking – The process of withdrawing staked cryptocurrency from the network.
APY – Annual Percentage Yield, the amount of rewards a stakeholder can expect to earn from staking. Often just Yield.
Slashing – A penalty imposed on validators who act maliciously or fail to validate transactions correctly.
Consensus Mechanism – The algorithm or protocol used to ensure that the network can come to an agreement about the state of the blockchain.
Staking vs. Mining – Consensus Mechanisms
Staking and mining are both consensus mechanisms used in blockchain networks to validate transactions and secure the network. However, they differ in their approach to achieving consensus and the rewards they provide to participants.
Mining is a consensus mechanism that involves solving complex mathematical puzzles using specialized hardware to validate transactions and add them to the blockchain. The first miner to solve the puzzle is rewarded with newly minted cryptocurrency, as well as transaction fees. Mining is commonly used in proof-of-work (PoW) blockchains like Bitcoin, where the computational power of miners is used to secure the network.
Staking, on the other hand, is a consensus mechanism that involves holding a certain amount of cryptocurrency and locking it up in a smart contract. This, in turn, is used to validate transactions and secure the network. Stakers are rewarded with newly minted cryptocurrency for their participation in the consensus process. Staking is commonly used in proof-of-stake (PoS) blockchains like Cosmos, where the economic stake of validators is used to secure the network.
How to Stake ATOM
Keep in mind that there are different approaches when it comes to staking any cryptocurrency. These approaches differ in the difficulty of their execution, as well as the required skills and (in some cases) hardware to take them on properly.
Most coins are staked in similar ways, through similar processes, but the devil is in the details. In the section below, you can find ways on how to stake ATOM.
Staking ATOM on a centralized exchange – Easy
ATOM staking on a centralized exchange (CEX) allows users to stake their ATOM tokens directly on the exchange, rather than setting up their own validator node, or going through a staking pool.
Using a CEX is probably the easiest way to stake ATOM. The platform does everything for you, keeps your atoms safe, and often comes with some extra benefits (in terms of rewards), depending on the CEX.
In general, staking through a CEX gives you:
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Security – By staking through a centralized exchange, your coins are secured, and sometimes even insured, by the platform. Quality platforms always have a robust security framework in place.
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Simplicity – Staking through a platform usually boils down to just a couple of clicks. No technical knowledge is required (except a familiarity with the cryptosphere, and ATOM itself).
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Easier Tracking – Many CEXs offer different approaches to tracking your staking endeavors. They often have in-built graphs providing information not only on your stake, but on the coin you are staking in general.
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Other Features – If you use a CEX, you’ll easily be able to sell or trade your ATOM when you unstake it. They might also provide useful educational materials.
However, it is important to note that there are some drawbacks to staking on a CEX. The APYs offered by CEXs are often lower than those available on decentralized exchanges or by running your own validator node (but not always). Additionally, CEXs are typically led by corporations that may not always be transparent in their operations. Furthermore, some exchanges may charge fees for staking or other related services.
Furthermore, staking on a CEX means that the user does not hold the private keys to their ATOM tokens, as the exchange holds the key on their behalf. This means that users must trust the exchange to properly secure their tokens and protect them from potential security breaches or other risks.
However, these issues are not as problematic for high-quality platforms. We will discuss the actual process of staking through a CEX below.
Joining an ATOM staking pool – Intermediate
The next approach, in terms of difficulty and complexity, is staking through a staking pool. Also known as delegation to an existing network, you stake your coin directly into a pool, instead of using a platform as an intermediary. It involves delegating your ATOM tokens to a pool operator who manages a validator node on behalf of multiple users.
In order to do this, you will need to use a wallet that supports ATOM.
To effectively stake within a staking pool, you first need to research different staking pools, and select one that fits your needs. This means finding one that has a good track record, that is transparent, and that offers an acceptable APY.
Once you find one, you just need to transfer your ATOM to the pool, through your wallet.
Note that a pool requires more work and research than a CEX. Furthermore, it does not offer the same amount of security, in terms of insurance. There is also the risk of slashing, in case the staking pool operator does not practice due diligence.
On the other hand, fees tend to be (but not always are) lower than a CEX, and rewards can be higher.
Liquid Staking – Intermediate
Liquid staking ATOM is a new way of staking that allows users to stake their ATOM tokens and still maintain their liquidity. This is done by tokenizing the staked ATOM and issuing a corresponding token, which can be used on Ethereum and other DeFi platforms.
It works by having users deposit their ATOM into a smart contract. The validator node then stakes the ATOM tokens on the Cosmos network, earning rewards in the form of more ATOM.
The staked ATOM tokens are then tokenized into another token, which is pegged to the value of the staked ATOM. This token can be freely traded on specific platforms, while the staked ATOM is locked and cannot be transferred until it is unstaked.
This approach requires more work than previous types, since you will first need to find a platform that offers liquid staking for ATOM. Then, you will let the liquid staking platform stake ATOM for you on the Cosmos network, and will also tokenize your crypto.
While the DeFi platform will do all the technical work for you, you still need to be smart with your tokenized ATOM. The obvious benefit here is that you get to increase your crypto amount through staking, while still being able to trade and lend your tokens.
The issue here, besides the increased amount of work, is having to trust the DeFi platform. Furthermore, you will need to research proper trading and lending with your tokenized ATOM if you want to make the most out of this approach.
Becoming an ATOM validator – Hard
By far the hardest, but also perhaps the most lucrative approach to staking involves running your own validator node.
By running your own node, you get the highest potential return on your staked ATOM, and have complete and total control of your crypto.
However, in order to set it up, you will need significant technical expertise and a solid investment in hardware.
In order to run a node, you will need, according to Cosmos network documentation, at least:
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32GB of RAM
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Between 500GB to 2TB of storage
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The appropriate software
You can also run a node through a cloud provider. However, this comes with a monthly fee, with respectable providers charging at least a couple of hundred dollars a month.
The biggest risk here is that if you make a mistake in setting it all up, you face significant slashing risk and penalties. You will also need to take active participation in governance on the Cosmos network, specifically voting on proposals regarding the network. Now, for some that might be a bonus, but for others it just entails extra work.
ATOM staking options compared
| Method | Requirements | Rewards | Risks |
| CEX | An account on a CEX | Staking rewards minus a fee | Trusting a third-party service |
| Staking pools | Private wallet, a little technical knowledge | Staking rewards minus a fee | Losing your private keys, trusting a third-party (pool operator) |
| Liquid Staking | Private wallet, a little technical knowledge, extra research | Staking rewards minus a fee, liquidity tokens | Losing your private keys, trusting a third-party service (DeFi platform) |
| Validator node | Hardware, software, technical knowledge | Maximum staking rewards, highest level of control | Penalties for any mistakes in node setup |
Where to stake ATOM
Through our research we have come to the conclusion that the following CEXs represent the best and easiest way to stake ATOM.
1. Coinbase – Overall Best Platform For Staking ATOM
Coinbase offers a user-friendly interface that makes it easy for users to navigate and manage their staking activities. Users can easily stake and unstake their ATOM, monitor their rewards, and track their staking history.
Its easy to navigate interface. The many tracking options and quality features it offers, along with its competitive fees, make it our top choice.
How to stake ATOM on Coinbase
In order to stake ADA through Coinbase, before you even begin, you need to create an account, set up the app on your phone, and transfer (or buy) ATOM and place it in your wallet.
Go to the Assets Tab
Log into your account, and find the My Assets tab. Then, scroll down and look for ATOM. Click on it and scroll down on the Cosmos page to find the Stake ATOM button.
Read the disclaimer
Once you have clicked on the “Stake ATOM” option, a disclaimer will show up. Read it thoroughly, don’t ignore it, and then click on “Continue”.
Enter the amount of ATOM you want to stake
Now an option will pop up that will give you the opportunity to stake a certain amount of ATOM. You get the choice on whether you want to input a direct amount of ATOM, or if you want to put an equivalent of ATOM by its USD value. Then, click on “Preview Stake”.
Confirm your stake
Finally, once you are sure about the amount you want to stake, look through the expected reward, read all the information on the popup, and then just click “Stake Now”.
2. Binance US – Largest Variety of Crypto
First of all, note that we are reviewing Binance US, which differs from the standard website when it comes to its staking offers.
Binance is a leading cryptocurrency exchange, with some of the lowest fees in the industry. The platform offers a user-friendly interface and mobile app, making it easy for users to navigate and manage their staking activities on the go.
Its security is top-notch, but we do need to mention that Binance.US does offer fewer staking options than the standard website. That being said, it’s an excellent choice for ATOM staking.
How to stake ATOM on Binance
First off, visit the Binance.us website and create an account, and fill your wallet with some ATOM.
Go to the Staking page
Once you are logged in, go to the staking page, and choose ATOM.
Read the disclaimer
A pop up explaining staking and its risk will show up. Read it, click on “Next”, then on “I Understand”.
Enter the amount of ATOM you want to stake
Type in how much ATOM you want to stake (or go with a percentage). Also note that you can use the Auto-Restake option, if you want your rewards to be automatically added to your stake. Or, you can just have your rewards be sent directly to your wallet. Then, just click “Preview Stake”.
Confirm your stake
Take a final look at your stake, double-check the info, and then just click “Confirm”.
3. Crypto.com – Highest rewards (if you stake CRO along with ADA)
Crypto.com is a very versatile cryptocurrency platform, with support for over 250 currencies. It’s very attractive for crypto traders, and holds a host of useful settings.
ATOM staking on Crypto.com offers an attractive APY, which is updated regularly to reflect the current market conditions. Users can stake their ATOM for different durations, ranging from one month to three months, with the option to extend the staking period.
However, it’s a bit complicated to use. While it does give the best yield, it’s very influenced by the amount of CRO, its utility token, you are willing to utilize. In other words, the longer you are willing to stake your ATOM, and the higher the amount of CRO you are willing to stake alongside it, the better your returns.
How to stake ATOM on Crypto.com
Step zero is creating an account on Crypto.com, downloading the app, and getting some ATOM into your Crypto.com wallet.
Open Crypto.com Earn
Log into your account and head to the Earn section.
Select ATOM from the list
Scroll down, find ATOM, and click on “Start Earning Now”.
Select the amount you want to stake, and term length
Select the amount you want to stake, the term limit, and the amount of CRO you want to stake as well (if any).
Confirm
Simply press Confirm, review your stake, and you are ready to stake.
ATOM Staking Platforms Compared
| Coinbase | Binance US | Crypto.com | |
| 🏆 Reward rate | 6.12% | 7.5% | 0.35% – 9% |
| ⌛ Payout frequency | Every 5 days | Weekly | Weekly |
| ⚠️ Staking limits | Minimum of $1 | 0.01 – 20,000 | 1.2 ATOM – $100,000 in token equivalent |
| 💰 Staking commision | 25% | Small commission | No information |
| #️⃣ No. of coins that can be staked | 5 | 26+ | 22+ |
How much can you make staking ATOM?
It is impossible to tell anyone exactly how much they can make from staking. It depends, significantly, on the knowledge and skill of the staker, the amount of time and money they are willing to invest, as well as simple luck and market fluctuations.
That being said, we can give you a rough estimate, as well as an overview of what you can expect.
First of all, the average annual percentage rate for the staking of any coin varies, depending on your approach. On average, staking ATOM through a pool gives you an APY of 9.7%. However, this will vary, depending on the staking pool, or the CEX you choose.
The ATOM staking APY varies dynamically with the total amount of ATOM staked. So you may find that this APY varies over time.
We also need to mention that the fiat value of ATOM will vary over time, as does the value of any cryptocurrency. This is dependent on market fluctuations, as well the implementation of any new regulations and laws concerning crypto.
Is there a downside to staking ATOM?
While staking can serve as an excellent source of potential passive income, there are, of course, some downsides. For example:
Unbonding Period – Unless you’re using a CEX that offers instant unstaking, the Cosmos blockchain has a 21-day unbonding period for any staking. In other words, you need to wait 21 days to unstake the crypto you already staked. You won’t be able to access them otherwise.
Slashing – As with most other crypto staking approaches, slashing is always a risk. For ATOM specifically, slashing can occur if the validator of a staking node goes offline or if double-signing occurs. This can then lead to the loss of crypto, as well as a loss of certain privileges (like proposing blocks or earning rewards).
Price Volatility – As with any other cryptocurrency, there is always a question of price volatility. The fiat currency value of a coin can, and does, change significantly over its lifespan and ATOM is no different.
Security – The Cosmos blockchain network (which hosts ATOM) has an excellent security framework in place, as do all the CEXs we listed out above. That being said, there is always a risk involved whenever you buy, sell, or stake crypto.
Should I stake ATOM?
Any type of investment and trading carries a certain amount of risk with it. Staking a cryptocurrency is no different. The final choice is always yours.
With that in mind, consider the following:
Your Experience With Crypto – The entire crypto “market” is famously volatile. While you do not necessarily need to understand the intricacies of how the blockchain actually works (unless you want to set up your own node), you still need to be familiar with basic concepts. Furthermore, you especially need to be familiar with the cryptocurrency you want to stake.
Taxes – In order to maximize your potential bottom line, and stay safe, you need to be aware of the regulations surrounding cryptocurrencies in your region. It’s best you talk to a professional accountant or attorney with experience in this area.
Risk – First, you need to be aware of the level of risk you can handle, both in terms of finance and stress, before you start staking. Next, you need to understand that the crypto market is still new, and changes within the blockchain, as well as new local regulations, are part and parcel for any type of crypto trading and investment.
HODLing or Trading – If you want to HODL, ie, simply hold on to ATOM as a long-term investment, then staking it can complement this strategy nicely. If you want to make regular trades or be able to sell at a moment’s notice, then staking ATOM is inconvenient due to the 21-day unbonding period.
Final Thoughts
Staking ATOM is a great way to assist in the further development and decentralization of the cryptosphere, and gain rewards at the same time. It’s an excellent example of the democratic nature of crypto – everybody and anybody can take part in the process, you just need to invest some time and effort.
FAQs
How long does ATOM need to be staked for?
While you can technically stake and unstake your ATOM whenever you want, you will need to wait 21 days before you get your coins back after commencing the unstaking process.
Is staking ATOM profitable?
By staking you should increase the amount of ATOM you hold, but whether you make a fiat profit when you sell will depend on how the price of ATOM changes in the meantime.
Is staking ATOM difficult?
Using a CEX is pretty easy, since the platform does most of the work. Staking through a staking pool is a bit more complicated, since it requires some additional steps, but still pretty straightforward.
Setting up your own node and pool, however, is vastly more complicated, requiring serious technical knowledge and expertise.
Why are ATOM staking returns so high?
The most likely reason behind ATOM’s high APY is the fact that the crypto is relatively new. This means that the high percentage is there to incentivize users to strengthen and develop their network.
ATOM’s ICO was released in 2017, but it only became ready to use two years later. Attracting more users, and having them stake as much ATOM as possible, leads to generation of more blocks, which then leads to better security and greater flexibility.
Is staking ATOM safe?
ATOM staking is only as safe as the avenue through which you do so. If you stake through a CEX, you are dependent on the protocols and frameworks the platform uses to protect you. The same is true for a staking pool or wallet.
However, we should point out that the Cosmos network is very secure, as are all the centralized exchanges we mentioned above.
Which coin gives the highest staking rates?
While staking APYs change very often, at the time of writing ATOM has one of the higher APYs, with 9.7%.
What is the minimum for staking ATOM?
It depends on your chosen manner of staking. However, for ATOM the most common minimum stake is 0.05.
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