The Best Methods for Staking Avalanche (AVAX)
With AVADO’s range of devices opening up the Web 3.0 ecosystem to more participants than ever before, many people are looking to easily earn passive income and get involved with exciting projects in the blockchain landscape. One such project is Avalanche (AVAX), which is proving to be an increasingly in-demand option for a few key reasons.
Here’s everything you need to know about staking AVAX.
What is Avalanche?
Avalanche is a platform designed to serve as the foundation for smart contracts and decentralized applications (dApps). Much like Ethereum, this project is one that aims to be more than just a digital currency. Created by Ava Labs, Avalanche has already turned into one of the most popular dApp and smart contract ecosystems in the industry today.
According to Staking Rewards, Avalanche currently stands as one of the top ten crypto assets by staked value. At the time this article was written, the site estimates that the project has a staking market cap worth well over $6 billion USD. In addition, the Avalanche project website states that more than 65% of AVAX tokens are currently being staked.
Overall, it is clear that Avalanche is an extremely popular project to stake. Users have the option to help out the network’s governance and, in exchange, are financially rewarded.
There are two key ways to get involved in the Avalanche network and start earning passive income. You can get started by either running a validator or by delegating your AVAX.
What is a validator?
Within the Avalanche ecosystem, validators are those who take on the responsibilities of a crucial set of automated tasks. Through doing so, they maintain the network’s decentralization and overall health.
Validators create new blocks and process transactions, which is what allows the network to function without double-spending or the need for a third party intermediary. For these decentralized validators to achieve consensus, they frequently sample each other within the network. Each validator has a higher chance of being sampled if it holds a large amount of AVAX, as that serves as evidence of a substantial stake in the network.
At the current point in time, there are a few minimum requirements that must be taken into account by anyone who is thinking of running their own Avalanche validator. These requirements include a minimum stake of 2,000 AVAX, a minimum of 2 weeks for staked funds, and a maximum staking period of 1 year.
What is a delegator?
Delegators are staking participants that delegate part of their responsibilities to validators. Rather than have to establish their own validating node, they choose to trust an existing validator on the network.
This arrangement allows the delegator to receive a financial reward when the validator that they chose is verified as being correct and meeting the network’s criteria. This entire process occurs passively, allowing users to both assist the network in its governance while earning money at the same time.
Notably, when you delegate Avalanche, you have to pay a fee to the validator. This fee is set at a minimum rate of 2% but is ultimately determined on an individual basis.
The requirements for delegating are substantially lower than they are for running a validator. You’ll need just 25 AVAX as a minimum delegation for a period of at least 2 years and less than 1 year.
How much can you earn from staking AVAX?
According to the official project website, you can currently earn an average annual yield of 9.28% per year from staking AVAX. This ROI is considerably higher than some similar projects in the space, according to the current figures cataloged by Staking Rewards.
By using Avalanche’s official staking calculator, you can get an up-to-date estimate of how much the return on your AVAX stake would likely be on a daily, monthly, or annual basis.
The best ways to stake Avalanche
Setting up Avalanche’s official wallet
One popular way to stake AVAX is by using the project’s official wallet. This wallet allows you to either run a validator or serve as a delegator in the network.
The biggest benefit of using this method is that it is not unreasonably difficult to become a delegate by following the extensive documentation offered by the project. That being said, however, this can be tedious to follow and is perhaps best suited for those with experience taking part in Proof-of-Stake (PoS) networks.
The downside to this method is that it can be quite difficult to successfully earn money by running a validator. To do so, you’d need to find a way to ensure that the wallet you use is running 24/7. That way, you can avoid being penalized by the network — as these penalties result in a significantly diminished passive income stream.
Trusting an exchange
Exchanges that offer AVAX staking make it extremely simple for newcomers to run a delegator. In this scenario, the exchange itself serves as the validator that you are delegating to.
The benefit of this method is that it is one of the easiest ways for newcomers to stake this project.
However, the downside is that the amount of money that you earn would be diminished by the fees that you are paying to the cryptocurrency exchange. In addition, many people in the landscape believe that central intermediaries are the very thing that blockchain technology was designed to overcome. As such, relying on them for your staking needs might not be a palatable option.
Taking part in a staking pool
Another option for staking AVAX is to take part in what’s known as a staking pool. Here, users bundle together their resources and divide the rewards among participants.
Staking pools can be a great way to stake in situations where you do not meet the minimum requirement to do so alone.
The downside, however, is that it can severely limit your earnings. You may even be receiving a less-than-favorable share depending on the pool that you choose to use.
Using AVADO, which makes stalking easier and more rewarding
By far the easiest and most effective way to run a validator in the Avalanche network is through AVADO. AVADO’s range of plug-and-play blockchain devices make it incredibly easy to start staking AVAX in just a few minutes. By using an AVADO device, you can even earn more passive income by allowing other users to delegate to your validator.
With other staking methods, you may see your passive income substantially diminished as a result of fees or not being able to keep your validator running 24/7. In contrast, using a dedicated AVADO device mitigates these obstacles entirely.
Best of all, this method requires no previous technical knowledge thanks to AVADO’s ready-to-go features and easy on-screen installation instructions.
By visiting AVADO’s website today, you’ll be able to find the perfect device to meet your individual needs. Each and every plug-and-play device offered by AVADO will allow you to get involved in this exciting landscape while earning passive income for doing so.