Tezos Staking Tutorial | How to bake XTZ
What is Tezos (XTZ)?
Tezos is a cryptocurrency and blockchain protocol that supports smart contracts and decentralized applications and is designed for safety, open participation, and upgradeability.
Upgrades to the protocol are made in a structured framework through clear decision-making from the community and stakeholders.
What is Tezos baking?
Tez or XTZ is the native token of the Tezos network. You can hold it, spend it, or send it just like any other cryptocurrency. You can also bake it. It is similar to mining bitcoin. It secures the network, verifies transactions and distributes rewards but unlike mining, it doesn’t require expensive hardware and a lot of electricity all it needs is Tez (XTZ). It uses a unique consensus mechanism called liquid proof of stake (LPOS). It rewards participants with $XTZ based on how much Tez they are baking rather than how much mining power they control.
The Tezos delegation process is safe and simple. The baker you select keeps a percentage of your baking reward as a fee. You can also change your delegation to a new baker at any time. In this way, baking on Tezos encourages open participation. The baking reward motivates every Tez holder to participate no matter how many Tez they have. Today, there are hundreds of Tezos bakers. Check out a list of public bakers that share rewards at mytezosbaker.com. Most of them can be chosen as a validator on Guarda Wallet.
Why stake Tezos?
Token holders can delegate their validation rights to other token holders (called validators) without transferring ownership of their tokens. When performing a delegation operation, you only send your baking rights to a validator: your XTZ stays on your wallet and remains yours. Contrary to other DPoS protocols, in Tezos you delegate your whole account.
When delegating, your XTZ is completely liquid. You are free to move your tokens anytime as there are no freezing periods when delegating to a validator.
There are no direct risks of delegating XTZ. The only risk you take is not earning potential rewards. Carefully choose your validator to ensure the quality of service and rewards.
When staking, you can earn a passive income by participating in the Tezos network via delegation.
The current annual yield on Tezos is around 6%, minus a validator’s fees.
Stake XTZ on Guarda Wallet.
Stake your XTZ using Guarda’s great interface and security features. You can choose among many trusted validators. Then receive your participation rewards directly to your wallet!