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Staking Luna on the Terra Protocol is a fantastic way to participate in the Terra ecosystem, help secure the network, and earn passive income from staking rewards.
Staking Luna on the Terra Protocol is a way to earn passive income while contributing to the security and governance of the platform. By following the steps outlined above, you can begin staking Luna and potentially benefit from the growth of the Terra ecosystem. Keep in mind that the crypto price, including Luna price may impact your rewards, so stay informed and make decisions based on your risk tolerance and financial goals.
In this guide, we will provide an introduction to staking Luna, discussing the benefits, risks, and steps involved in the process.
What is LUNA
LUNA is a utility token that powers the Luna network, which is a decentralized platform for building dApps. The Luna network can be used by developers to create their own dApps and users to access them. The Luna token allows users to pay for transactions on the Luna Network and Terra Protocol.
The primary purpose of LUNA is to secure the network and maintain the stability of Terra's stablecoins, such as TerraUSD (UST). LUNA token holders can participate in the governance of the Terra Protocol and earn staking rewards by delegating their tokens to validators.
How to stake LUNA on Terra Protocol
To stake LUNA on the Terra Protocol, you'll need to delegate your LUNA tokens to a validator. In this tutorial, we'll walk you through how to do that with AragonOS' Luna Delegate app (LDAP).
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First, download and open the LunaDelegateApp from Github.
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Next, select "Luna Staking Pool" as your delegation option when prompted during contract deployment.
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Click on "New Account" in the top right corner of your screen; then click on "Create New Address" at the bottom left corner of the pop-up dialog box. Then wait for another pop up asking if you want them to create an account or just send funds there; choose 'Account Creation'.
What is the best option to stake Luna?
The best option for staking Luna is to delegate to a validator that has a track record. The second best option is to delegate to a validator with a low commission fee. The third best option is to delegate to a validator with a high amount of self-bonded tokens.
To stake Luna you must first purchase Luna tokens from a coin exchange that supports Luna trading, such as Binance or KuCoin. One of the best places to stake Luna on the KuCoin exchange. To stake Luna on KuCoin, follow these steps:
Log into your KuCoin account, click [Earn] - [KuCoin Earn], scroll the page, and you will find the [Stable] section. Please note that you can search for the coin type or filter the type as Staking to check all the Staking products they support now.
KuCoin will adjust the staking proportion of LUNA every calendar day and calculate the daily revenue of the users according to the snapshots of the LUNA amount held by users at 23:59:59 (UTC+8) each calendar day. The daily revenue will be distributed the next day. Users can check their revenue return at "My Bonus".
How to delegate LUNA to a validator
The Luna Network is a blockchain that uses the Stellar Consensus Protocol (SCP) to achieve consensus. The Luna Network was designed to be a decentralized, open-source and secure platform.
To delegate LUNA to a validator, follow these steps:
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Download and install the Terra Station Wallet.
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Create a new wallet or import an existing one.
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Send LUNA tokens from an exchange or another wallet to your Terra Station Wallet address.
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Click on the "Staking" tab in the Terra Station Wallet.
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Browse the list of validators and choose one based on their performance, commission, and other factors.
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Click on the chosen validator and select "Delegate".
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Enter the amount of LUNA you want to delegate and confirm the transaction.
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Please note that there is a 21-day unbonding period if you decide to undelegate your LUNA. During this period, you will not receive staking rewards, and your LUNA will be locked.
Overview of the staking pools on Terra Station
Terra Station allows users to stake their LUNA tokens by delegating them to validators. Validators are responsible for securing the network and validating transactions. The staking pools on Terra Station refer to the list of validators available for users to delegate their LUNA tokens.
Staking pools are an integral part of the Terra Station economy. They provide a convenient way to participate in gambling activities, where winners can be paid out in a matter of days instead of months. Depending on the betting odds, staking pools typically pay out around 5% of your initial bet stake.
What to consider in choosing a validator delegate to stake LUNA
You will want to consider the following when choosing a validator delegate:
The size of the stake pool
The size of the stake pool is important because it affects the amount of rewards you can earn, as well as the likelihood that your stake will be slashed.
The size of a staking pool affects how much you can earn in interest by staking LUNA on Terra. The greater this number is, the more likely it is that other participants in the network will be competing with you for block rewards and thus paying higher fees for their transactions to be included in blocks faster than yours would otherwise get mined.
Amount of self-bonded tokens
Self-bonding is an important part of the Terra staking process. The more self-bonded tokens you have, the more chances you have of being elected as a validator and receiving rewards for your contribution to the network.
The number of LUNA you can stake is directly proportional to how much self-bonded LUNA you have. For example: if I want to stake 1 million LUNA but only have 500k in my wallet, then I am only able to stake 500k (and not 1 million).
Amount of delegated tokens
First, you need to decide how much LUNA you want to stake. This is a personal choice and depends on many factors including your risk tolerance and the amount of time that you have available to dedicate towards staking.
Next, determine how much LUNA is available for delegation. This can be done by checking out our Delegator Tool which lists all active delegators along with their holdings and percentages staked on the Terra Protocol network. The tool also provides information about each individual account such as its age (when was it created), number of transactions processed over time as well as other statistics related specifically with delegated tokens (such as average rewards per block).
Commission fee
The commission fee is the fee you pay to the validator for staking your tokens. It's usually a percentage of the total amount of tokens staked and paid in Terra staking tokens.
For example, if you stake 4 LUNA for 6 months at 1% annual interest rate with a commission fee of 0.5%, then on June 30th next year your balance would be: 4 x (1 + 0.5%) = 4 x 1 + 2 x 0.5 = 5 + 1 = 6 LUNA.
Track record of the validator
A good way to evaluate the track record of a validator is by looking at how long they've been operating, how many delegations they have and what percentage of those delegations they've lost.
The longer a validator has been in operation, the more likely it is that they've figured out how to properly maintain their node(s). The longer they've been around means that any bugs that might have existed when they first launched should be fixed by now. Validators with fewer delegates than others may be less experienced or simply haven't had time yet because there aren't enough people using their services yet.
Conclusion
Now that you know how to stake LUNA on Terra, it's time to get started. The best thing about staking is that it's easy and free! You don't have to worry about setting up your own validator or figuring out how everything works--just delegate your tokens and let someone else do all the work for you.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.