Staking ICP is an awesome way to generate passive income while being able to participate in the governance of an infinitely scalable blockchain.
Important Links for staking ICP
See up to date staking data on Internet Computer Asset Page
Use our ICP Advanced Staking Calculator
Everything you need to know about staking ICP
The Internet Computer is the fastest and only infinitely scalable general-purpose blockchain — incubated and launched by the DFINITY Foundation in May 2021 — and aims to become a ‘world computer’ hosting Web3 dapps, DeFi, games, NFTs, social media, and metaverse used by billions of users.
ICP is the native utility token of the Internet Computer, and is used in the following two functions:
- Governance: ICP token holders can stake ICP in the Network Nervous System (NNS) DAO to create “Neurons” to vote on governance proposals and earn voting rewards.
- Gas: ICP tokens can be burned and converted into cycles, which are used by developers to pay for computation and storage costs for their decentralized applications running on the network via canister smart contracts.
In the following article, we will go through the steps to stake your ICP and convert it into Neurons.
What you need for staking ICP
- Create an account in the Network Nervous System App
- Minimum Staked Amount 1 ICP
- at least 0.0001 ICP to pay transaction fees
Step 1 – Create an Account in the Network Nervous System App for staking ICP
The network nervous system is the way the Internet computer is governed. Staking ICP allows you to participate in the community Governance of the Internet computer.
1. First step is to go to https://nns.ic0.app/. This is the official app of the network nervous system and the app that facilitates ICP staking.
2. To log in to the NNS app, you need to create an Internet Identity.
3. Write down your Internet Anchor.
4. Choose a Recovery Mechanism, to recover your Anchor in case your device gets lost.
5. Write down your Seed Phrase.
6. Your Wallet is set up.
Step 2 – Sending ICP to your Wallet
1. First go to https://nns.ic0.app/#/accounts, here you can find an overview of your Account.
2. Under Main find your wallet address, copy it and transfer ICP from your preferred exchange to it.
Step 3 – Staking ICP aka Neurons
1. Click on the Neurons tab and click Stake Neuron.
2. Choose your Account.
2. Enter the total number of ICP you want to stake, and click create. You have to stake at least 1 ICP.
3. Set the dissolve delay to your preferred years of stake, and click update delay and confirm it.
4. Next, select your topics of interest for the proposals you can vote for.
You earn staking rewards on your ICP?
The Dissolve Delay provides an economic incentive to governance participants. This is because the NNS pays higher reconciliation premiums the longer the dissolve delay is selected. Users can set a maximum delay of up to eight years. This encourages users to participate in the platform for a longer period of time. Each day, the NNS calculates the number of tokens available for rewards.
The ICP Neuron Calculator can be used to clearly calculate which rewards users can expect in individual cases for participating in governance. The calculator takes into account how many tokens were staked, the number of neurons, the staking duration and the dissolve delay.
Conclusion on staking ICP
The Internet Computer has brought forth many new features and thus laid the foundation for a real decentralized world computer.
The staking rewards differ strongly according to the risk preference of the staker. Depending on the selected Dissolve Delay, high yields can be possible. With our Advanced Staking Calculator, the possible staking rewards can be seen.
Furthermore, the Internet Computer has an interesting governance model. The approach of following certain interest groups with its Neurons and thus making an automated decision is very sophisticated.