Osmosis is a proof of stake blockchain that serves as an automated market maker (AMM) protocol for the Cosmos ecosystem. Osmosis utilizes Inter-Blockchain Communication (IBC) to enable cross-chain transactions and allow users to provide liquidity in pools and swap the native tokens of others that use the Tendermint IBC. Osmosis serves as the liquidity gateway into the Cosmos ecosystem by enabling IBC deposits and withdrawals from one simple interface. The token that powers the Osmosis network is OSMO and it is exclusively used for trading, staking, delegating, paying transaction fees, and governance votes on the network. This tutorial will show you how to stake your OSMO tokens on the Osmosis network.
TL;DR
- View the current OSMO staking APR here
- Use the OSMO Staking Calculator to estimate your rewards
- Lockup: 14 days
- Average commission: 5%
- Minimum stake: 1 OSMO
- Recommended Osmosis staking wallets: Ledger, Keplr
- Steps to stake:
- Go to the Osmosis Staking Dashboard on Keplr and connect to your wallet.
- Select a validator from the list at the bottom of the page. Check our FAQ on how to choose a validator if you are unsure who to delegate to.
- Once you have chosen a validator and decided on the number of tokens you would like to stake, click ‘Manage’ and then press ‘Delegate’.
- Finalize by entering the amount of tokens you want to stake, then click ‘Delegate’ and confirm the transaction in your wallet.
Prerequisites
Where to buy OSMO
You can get OSMO tokens at a centralized cryptocurrency exchange, at a DEX, or within select wallets. You should always do your own research when selecting a reputable cryptocurrency exchange. For best security, it is not recommended to leave your tokens on an exchange, but transfer them to your non-custodial or cold/hardware wallet after procuring them.
Osmosis (OSMO) wallets
Osmosis has a variety of non-custodial wallets for you to choose from. We recommend that you use a hardware wallet such as Ledger otherwise we suggest using Keplr wallet. Compatible wallets include:
How to connect Osmosis (OSMO) to Keplr
When setting up your Keplr wallet, click on the network name at the top of the wallet and toggle the drop down options. Select Osmosis and it will automatically create an Osmosis wallet for you.
Selecting Osmosis validators
Please refer to the FAQ section titled ‘How do I choose Osmosis validators’ on this page when selecting Osmosis validators. Also, you may want to utilize our criteria for verifying providers through the Staking Rewards Verified Staking Provider (VSP) Program.
How Staking Rewards for Osmosis (OSMO) are Generated
Learn how rewards are generated in the FAQ section titled ‘How are the rewards generated’ here.
How to Stake Osmosis (OSMO)
Step 1: Make sure you have a Keplr wallet
Stake your OSMO tokens using Ledger, Keplr, Exodus, amongst others. We will use the Keplr wallet in this staking tutorial.
As a popular wallet in the Osmosis ecosystem, Keplr offers users the ability to stake tokens, access blockchain apps, and manage multiple tokens in one wallet. Simply connect your Ledger (if applicable) to Keplr wallet or use Keplr wallet directly to stake OSMO. Install the Keplr browser extension and deposit your tokens into this wallet before continuing onto step 2.
Step 2: Go to the Osmosis staking portal and choose a validator
After entering your wallet, start staking and select validators. We recommend choosing validators from our VSP Program. VSPs have a blue tick on their logo here.
If you are unsure of how to choose a validator, please see the FAQ section named ‘Selecting Osmosis validators’ above this one to help you decide.
Go to the Osmosis staking dashboard and follow the steps below:
- Click the ‘Connect Wallet’ button in the top-right hand corner of the page
- Choose validators and click on the names of the ones you have chosen
Step 3: Finalize the transaction
Enter the amount of OSMO you want to stake, press delegate and approve the transaction in your wallet.
Congratulations! You have now staked your OSMO tokens and will start earning those juicy staking rewards.
Step 4: Track staking portfolio
- Track your OSMO staking rewards on the Osmosis staking dashboard.
- Monitor governance proposals on the Osmosis network that may impact the staking mechanism.
- Track the current and historical reward rates, validator count, number of unique Osmosis staking wallets, and staking ratio of the Osmosis network by visiting the Osmosis asset page. To make better staking decisions, it’s essential to understand these relevant data points. To learn how these data points could impact your staking rewards, please read more in the FAQ sections named “How do I choose Osmosis validators” and “How are the rewards generated” on the Osmosis asset page.
Step 5: How to Unstake Osmosis (OSMO)
To unstake your OSMO tokens, follow the steps below:
- Go to the staking dashboard
- Click on the arrow on the right-hand side of the validator APY
- Click ‘Undelegate’
- Enter the amount to unstake
- Sign the transaction
Maximizing Staked Osmosis (OSMO)
Now that you have staked your OSMO, you have four options which can be used to change your position. These options appear on the Osmosis Staking Portal. The options are:
- Stake more
- Redelegate
- Compound your rewards
- Claim reward
- Unbond
Stake more
You can add to your current delegation by clicking on the validators name and staking more OSMO with them or any other validator.
Redelegate
Firstly, delegating from one validator to another can be done without waiting for the unbonding period. You might consider redelegating if your current validator raises their commission rate or gets jailed for misbehaviour on-chain. Once redelegated, you have to wait for 14 days before you are able to redelegate again.
Compound your rewards
Rewards are not auto-compounded. To get the most out of your tokens, you should consider claiming and staking your rewards more frequently, but consider that each transaction will cost you some gas. By using our Osmosis staking calculator, you can calculate the optimal re-stake frequency for your amount of OSMO. Some tools, such as restake.app, will enable you to pick a validator who will auto-compound your rewards for you, so keep this in mind.
Claim reward
The amount of accrued rewards will be available and shown in your dashboard. To receive your staking reward when it is credited, simply click Claim Reward on the wallet home screen.
Undelegate
You can unstake your delegated OSMO immediately, but tokens will be available in your wallet only after the end of the period of unbonding, which lasts 14 days. If you want just to change the validator, then there is no need to unstake, since you will not receive rewards throughout the entire unbonding period — just use the Redelegate function. In this case, the unbonding period does not apply.
Conclusion
Staking is essential to Proof-of-Stake blockchains and comes with many benefits for investors and the network:
- Investors earn yield from token emissions and/or transaction fees.
- Stakers become eligible for airdrops as many networks prioritize granting these benefits to them.
- Staking helps to secure the network
- Staking from multiple participants helps decentralize the network
- Stakers can participate in governance, as many PoS networks allocate governance rights based on the amount of tokens staked.
Congratulations! You are now not only getting the most out of your investment with compounded returns. YOU are also (in-)directly contributing to the decentralization, and the network security of Osmosis and thus contributing to the long-term success of your investment! Osmosis needs active stakers like you to become successful long-term.
Now share the tutorial with your friends so they can get to start staking as well!
Lastly, don’t forget to check out the Osmosis (OSMO) asset page for more insights into staking OSMO and drop us a message if you found this tutorial useful. Happy staking!