Tezos uses an updated version of Delegated Proof-of-Stake (DPoS) for its consensus algorithm. This modified version is known as LPoS. Liquid Proof-of-Stake (LPoS) does not require you to forfeit custody to stake via a delegate.
This article will explain how to stake Tezos with your own wallet.
The Concept of Tezos Staking
In Tezos, staking coins to secure the network and generate blocks is called “baking”.
You can bake independently or you can use a delegation service. Both will yield an XTZ reward.
Baking yourself requires you to run a Tezos Node, a baker & an endorser client. You must stay connected 24/7. You also need a “roll” to bake, each roll currently costs 8,000 XTZ. So the minimum currently costs $7016 USD (8,000 XTZ).
Using a delegation service is your best bet if you only have a few XTZ. This guide will show you how to use a delegation service to stake your XTZ. You do not have to forfeit custody or give your private keys to do this. In other words, you don’t need to send your coins, only your baking rights. Your coins will remain safe in your wallet.
Check out MyTezosBaker to see the list of delegates or “bakers”. It’s a good idea to do a little research before choosing a baker.
This guide will show you how to bake XTZ using a delegation service.
Create Your XTZ Wallet
This is the first step. You need to create a wallet.
This guide shows you how to stake using the TezBox wallet. TezBox is available as a web wallet, mobile wallet, and as a browser extension. Tezbox can also be used in conjunction with Ledger and Trezor hardware wallets.
Head over to wallet.tezbox.com and you will see this page.
Click I Accept.
Once you get into the next page, click Create Tezbox shown in the screenshot below. You can also link it to your Ledger or Trezor but this tutorial assumes that you don’t have any hardware wallet.
This should only be done with small amounts of XTZ. If you want to stake any sizable amount of XTZ, you should consider getting a hardware wallet. Hardware wallets provide the highest level of security.
On the next page, you will need to save your seed words for backup. You can also add an additional passphrase for added security. Once you’re done with your backup, click Continue.
You will need to re-enter the seed phrase that was shown to you on the previous page. The screenshot below shows how it will look.
Once you enter the correct seed words, click Create Tezbox.
On the next page, you will need to create a password to encrypt your private data. Once you enter your password, click Encrypt Wallet
Delegate Your XTZ
Once you are in, you will see your account balance and your wallet address. There will also be a sidebar on the left. You need to click Add Account to create a new KT account (you need a KT address for delegation).
Keep in mind that you need to have around 0.25 XTZ to create a new account. If you have an empty balance, you need to send some XTZ to your wallet address.
You will need to wait around 1-2 minutes until the account creation is processed by the Tezos blockchain. Once it’s done, you will see the new account on your main window and on the left side-bar.
Then you need to transfer some XTZ from your main account into the KT address. Once you have some money in the KT address, you can start delegating. Check the screenshot below.
You can add your own custom address here. Just put their addresses inside the field (next to ‘Custom’).
It is safer to choose a trusted delegation service. MyTezosBaker gives a list of delegates, this is a good place to begin your research.
When you choose a delegate, you will see their wallet address.
You will click on Update Delegate when you have made your choice.
After you are done with this process, you will see a notification saying that the delegation operation was successful!
Congratulations! You have just delegated your coins!
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