How to stake Algorand in 2022
Algorand is a blockchain network that uses a pure proof of stake consensus to keep transactions costs low and data speeds high. Algorand invites developers to create decentralised applications for the Algorand network. There will only ever be 10 billion coins of Algorand’s native token, ALGO, which can be used to pay for transaction fees on the Algorand Network and can also be staked.
Algorand stands out from other blockchains due to its unique staking mechanism. ALGO coins are earned automatically by investors who hold ALGO in their non-custodial crypto wallets. This form of auto-staking is uncommon to most blockchains. What’s great about it is that Investors can deposit their ALGO directly into Algorand’s MyAlgo wallet.
By holding at least 1 ALGO, users and investors are able to earn rewards in ALGO straight to their crypto wallet. The current yield can be found in the MyAlgo wallet. Unlike other staking mechanisms that require stakers to unstake their delegated coins, Algorand users can claim their rewards by simply making a transaction.
Algorand’s simple staking method has attracted a large, dedicated community. Read on to find out about the process of purchasing ALGO and how to take advantage of Algorand’s auto-staking abilities. We’ll also go through some of the best non-custodial wallets in which to store your ALGO plus cover essential things to look out for when staking cryptocurrencies.
How to stake ALGO: 3 simple steps
Staking involves locking up assets into a pool that allows you to earn interest on your holdings. Algorand’s auto-staking feature means investors no longer have to lock their funds into a contract. Instead, their holdings automatically earn interest while they hold them in their wallets. There are still traditional staking options for Algorand available on crypto exchanges where investors must store their tokens for a set amount of time and earn interest. The interest rates vary between staking options, so it's best to scan the market for the best offers, whether it's through simply holding your ALGO or delegating it to a staking service.
Below are quick, easy steps for buying ALGO and staking it.
1. Buy ALGO
Sign up to one of our recommended crypto exchanges or brokerages to get started. You’ll need to provide some contact information and I.D. to register. Once your account is created, deposit some funds using your debit/credit card or bank transfer. When your funds arrive, swap your fiat for ALGO.
2. Stake ALGO
If you’d like to stake on a crypto exchange, then see if there are any open staking slots or flexible staking contracts. If there are spaces for you to stake, then delegate your ALGO tokens and wait for the required lock-up period before you can unstake them. If the contract is flexible, you can unstake them at any moment.
If you’d like to stake ALGO using Algorand’s auto-staking feature, then head to the Algorand website and download MyAlgo wallet. After installing the non-custodial wallet, send your ALGO from your exchange or brokerage to your new Algorand wallet. To earn interest, all you have to do is keep your ALGO on your Algorand wallet.
3. Unstake your ALGO (when you’re ready)
Unless there are flexible options, most exchanges have a 30-day lock-up period. After the 30 days are up, you will be able to unstake your ALGO and retrieve your rewards along with your initial deposit. If you staked using an Algorand wallet, then to receive your rewards, just make any transaction using the wallet. You can even send 0 ALGO to yourself, and you’ll be able to receive your staking rewards in your wallet.
Where can I stake ALGO?
If you’re ready to start staking now, then head over to one of our partnered exchanges or brokerages to get some ALGO for yourself and start staking. Use the links below to get started and follow the step by step guide above or the guides provided by the exchange.
How to choose a staking platform
When looking for a staking platform, there are a few things that you should keep an eye out for. Staking rewards often change over time. The security and reputation of a staking platform is important, especially if you’re using decentralised platforms.
Staking rewards fluctuate depending on how many investors are staking, whether the staking operator changes the rate themselves or if there are fees that deduct from the going rate overtime. Before delegating your tokens to a staking service, you should do research on other staking services available for the token you’re looking to stake and get a wide range of potential places to store your tokens.
The security of a staking platform you’re using is especially important when using decentralised finance (DeFi) applications. DeFi applications are prone to hackers, and some staking services have had their pools drained and users’ funds stolen.
Research any staking platform before you use it and get an idea of how the crypto community feels about a particular DeFi staking platform. Check if they’ve been audited by reputable DeFi auditors such as Certik. With Algorand, the most secure place to stake your tokens will be the official Algorand wallet.
Creating a wallet will allow you to make a key phrase that only you should ever have access to. Along with a wallet key phrase will be a password that can be used to log into your secured wallet. As long as you never share your wallet key phrase or password with anybody, your funds will be safe. You can also consider sending your assets over to a hardware wallet. Hardware wallets give extra protection from all types of malicious activity such as malware and phishing through either an email or a dodgy website.
Check out our list of the best cryptocurrency staking platforms in 2022.
Where can I earn the highest staking rewards for ALGO?
The interest rate for staking rewards changes all the time, and it can be tough to find a stable rate across all of the potential staking platforms that provide ALGO staking services. MyAlgo wallet offers a semi-stable rate that changes occasionally depending on how many stakers are staking through the wallet. If you’d like to stake on a crypto exchange or brokerage, then you can sign up to one of the crypto exchanges or brokerages below that offer Algorand staking with semi-stable rates.
Why should I stake ALGO?
Staking ALGO is helpful if you’re looking to hold onto your ALGO for the long term, including downturns in the market and bear markets that could last for a couple of months or even years. Staking allows you to earn more ALGO while contributing to the Algorand ecosystem. Holding Algorand in a non-custodial wallet will allow you to use decentralised applications on Algorand that utilize the ALGO token.
How long should I stake ALGO for?
How long you stake ALGO for will be up to you as an investor. If you’re interested in the Algorand blockchain and would like to follow it in the long term while keeping hold of your tokens, then staking using MyAlgo wallet or on a crypto exchange will be helpful to stay in the Algorand ecosystem while gaining interest in your holdings without having to trade them.
Some staking services on exchanges require a 30-day lock-up period or more; when that period is over, you may want to restake your ALGO, it’s entirely up to you.
Frequently Asked Questions
Staking ALGO is relatively safe and can be done by those who aren’t crypto experts themselves. If you stake on a crypto exchange, your funds will be secured by the exchange and whichever security settings you have set up for your exchange account. Passwords, multi-factor authentication and email confirmations are some of the many ways you can secure your exchange account. You can also stake using the MyAlgo wallet, where security measures include a wallet key phrase and password. Staking is also available through a Ledger hardware wallet. You can follow the steps to get to grips with staking using a hardware wallet by visiting Ledger’s website.
Staking on a crypto exchange is free. To stake ALGO natively, you may need to pay a small transaction fee in ALGO. Retrieving your rewards is free to do and can be done by sending a transaction of 0 ALGO to your own wallet. The action will trigger your rewards to be released and sent to your wallet within a few seconds.
Staking Algorand is generally profitable for everyone. The more ALGO that investors stake, the more rewards they’ll be able to collect. If you stake too little of an amount, you won't be able to benefit from the interest rate. When staking, you should aim to stake for at least longer than a month and be able to lock up a substantial amount of funds for that month or a longer time frame.
You can discover more about the Algorand ecosystem and what the Algorand team have up their sleeves by following Algorand on Twitter, reading their blog updates, following the official Algorand web forum or joining their discord server.