Frequently asked questions¶

1. What is staking¶

Staking your digital assets is a great way to earn passive income in the form of staking rewards. Rewards are mostly paid out in the native tokens that you stake. You can see this as earning interest on your crypto holdings.

In general, staking means you agree to lock up an amount of assets of your choice for a period of time, during which it is unspendable. However, you can unstake your assets whenever you choose as they always stay in your possesion. You will only have to wait for the unbonding period to send or exchange your funds again.

2. How do I benefit from staking?¶

By staking your tokens, you actively support the network by allocating resources to it and contribute to the stability and safety of the network. In return for your support, you earn rewards!

Instead of just holding your assets in a wallet and waiting for its value to grow, you generate extra tokens in form of rewards without having to do anything by staking.

3. What is the minimum amount I need to start staking?¶

In many cases it is possible to start with as little as $1. So you don't have to put in large amount to start staking!

4. What are the risks of staking?¶

The biggest risk of staking is that crypto prices are volatile and can drop quickly. A large price drop could outweigh any rewards you earned on your tokens. Because of the unbonding period it is not possible to sell your assets immediately when prices would drop. Keep this in mind if you find cryptocurrencies offering extremely high staking reward rates.

5. How does unstaking work?¶

When you want to unstake your delegated tokens, they will not be immediately available in your wallet due to the unbonding period.

After unstaking your tokens, all you need to do is wait for your wallet to automatically withdraw the balance. This process allows your staked balance (plus any rewards) to become usable again inside of your wallet. Once it is complete, you can now send or exchange your tokens again!

6. Does the unbonding period applies when I want to redelegate to another validator?¶

No! When you redelegate your staked amount to another validator, there is no unbonding period. This means that you will keep on earning rewards. However, there are two things to keep in mind when you want to redelegate.

You can only redelegate 7 times to the same validator within a period of 21 days. When this period has passed from the day of your first delegation, you will be able to redelegate again to this validator. And secondly, once you've redelegated your funds to a new validator, you will not be able to redelegate from this validator to another validator for the next 21 days.

7. Will staking rewards be automatically re-staked?¶

There is no automatic re-staking of staking rewards for the guides you'll find in our docs. This means that you will have to claim your rewards and re-stake them manually if you want to do so.