A Guide to Staking on Tezos

Linda from TriliTech has released a detailed video series explaining how to get started with staking on the Tezos blockchain.

A new feature introduced to the Tezos blockchain in June 2024 allows Tez holders to earn rewards by participating in the network through a process called staking. In this beginner's guide, we will provide a comprehensive overview of staking on Tezos, including its benefits, how to choose a baker, and step-by-step instructions to help you get started.

Previously, Tez holders could only earn rewards by delegating their tokens to a baker. Staking builds upon this feature and allows Tez holders to further increase their earnings potential. As a Tez holder, you now have two options: delegation or delegation and staking. It's important to note that staking on Tezos is a two-step process that involves both delegation and staking.

The main benefit of choosing to stake your Tez is earning higher rewards, which are twice that of delegation. To view the current reward rates, you can navigate to TZKT.io and scroll down to the Proof of Stake column, where you will see two numbers. The first number represents the Estimated APY for delegation, while the second number is for staking.

Bakers play a crucial role in the Tezos ecosystem by validating transactions and securing the network. If you hold Tez and wish to earn rewards, you can assign your Tez to a baker, who will receive a total of 16 tez in rewards, and you will receive a proportional slice based on your stake.

When choosing a baker, there are several key factors to consider:

- **Fees:** Bakers charge a fee for including your transactions in a block, which is deducted from your total rewards. Choose a baker with competitive fees to maximize your earnings.

- **Performance:** Bakers' performance can vary, so it's important to select one who consistently generates blocks and has a high uptime rate. This ensures that your rewards will be credited regularly.

- **Overstaking:** Avoid bakers who are overstaked, as this can dilute your rewards. A baker's overstaking capacity is displayed on wallet interfaces and baking services.

- **Reputation:** Consider the baker's involvement in the Tezos community, their experience, and any feedback or reviews from other delegators.

To begin staking, you will need the following:

- A Tezos wallet to store and manage your XTZ. Several wallets are available, including Kukai, Temple, Galleon, and Thanos.

- Some XTZ to cover the transaction fees and a minimum stake of 1 tez.

- An internet connection to interact with the Tezos blockchain and baking services.

For this demonstration, we will be using the Kukai wallet, but you can choose any wallet provider from the list above.

Delegation is a way for Tez holders to earn rewards without running a node themselves. You do so by assigning your Tez to a baker, a.k.a. a validator, who does the work and gives you a proportional slice of the rewards. To begin delegation:

1. Open your Tezos wallet and navigate to the "Delegate" section.

2. In the baker's field, enter the baker's address or name. You can also browse the list of bakers and select one.

3. Specify the amount of XTZ you wish to delegate to the baker. The minimum delegation amount is 1 tez.

4. Review the details and click on "Delegate" to complete the process.

After delegation, the next step is to stake your Tez. Once you stake your Tez, they’re locked up, and unlocking them or unstaking them will take about 11 days. To stake:

1. Go to a baking service, such as Baking Bad or Tezos Baking Info.

2. Connect your wallet by clicking on the "Connect Wallet" button and following the prompts.

3. On the baking service page, you will see your delegated bakers and the amount of tez you have delegated to each baker.

4. To stake your tez, click on the "Stake" button next to the baker you wish to stake with.

5. Enter the amount of tez you want to stake and click on "Confirm" to complete the staking process.

Sometimes, you may wish to change your baker due to changes in fees, performance, or personal preference. If you're staking, you essentially have to unstake your stake first and then delegate to the new baker. Here are the steps to change your baker:

1. Go to a baking service, such as Baking Bad or Tezos Baking Info.

2. Connect your wallet by clicking on the "Connect Wallet" button and following the prompts.

3. On the baking service page, you will see your delegated bakers and the amount of tez you have delegated to each baker.

4. To unstake your tez, click on the "Un