Fantom’s native token, FTM, powers one of the fastest and most secure blockchain ecosystems in the industry. Compatible with Ethereum, FTM is a versatile cryptocurrency popular among traders and investors. Beyond trading, you can stake FTM to generate passive income while contributing to network security.
What Is Cryptocurrency Staking?
Staking involves locking a portion of your cryptocurrency to support a blockchain network for a specific period. In return, you earn rewards, typically in the form of additional coins or tokens.
Think of staking like depositing money in a savings account: you lock your assets for a set time and earn interest or rewards.
When you delegate tokens to a blockchain’s governance model, the network protocol locks your assets—similar to a bank—preventing withdrawal for an agreed duration. This process benefits the network by:
- Limiting token supply to increase value.
- Supporting blockchain governance if the network uses a Proof-of-Stake (PoS) system.
Understanding Proof-of-Stake
Blockchains operate as decentralized peer-to-peer systems without central authority. While this reduces corruption risk, it raises a crucial question: how are decisions made?
In traditional organizations, leaders or boards make decisions. Blockchains, however, rely on consensus mechanisms—dynamic methods for achieving group agreement.
Proof-of-Stake is a consensus mechanism used to process transactions and create new blocks. Participants, known as validators, lock cryptocurrency in a smart contract. In exchange, they gain the right to validate transactions and earn rewards.
Note: Though your tokens are locked during staking, they remain in your wallet and are accessible only by you. You can unlock them at any time.
Step-by-Step Guide to Staking Fantom (FTM)
FTM is Fantom’s native utility token, used for staking, governance, payments, and fees. With a total supply of 3.175 billion coins and 2.5 billion in circulation (as of end-2022), staking FTM helps secure the network and rewards you with additional tokens.
To stake FTM, you need at least 1 token. No special hardware is required—staking can be done from a phone or computer.
Follow these steps:
- Choose a Wallet: Select a wallet that supports FTM tokens.
- Deposit FTM: Transfer FTM from an exchange to your wallet’s Opera address.
- Select a Validator: Choose between locking tokens for 2 weeks to 1 year (earning 4.5%–13.9% APR) or using the stake-as-you-go model (earning ~4% APY).
Note: Staked tokens cannot be used until unlocked. Unstaking takes seven days.
Calculating Staking Rewards
Rewards depend on your lock-up period. Locking tokens for up to 365 days can yield up to 13% APY, while the no-lock option offers a base rate of 4% APY.
Use Fantom’s official calculator to estimate earnings. Some platforms also offer a “claim and restake” feature, allowing you to compound rewards by unstaking and restaking.
Fantom Staking Requirements
Fantom staking has no minimum requirement beyond owning 1 FTM, making it accessible to everyone.
For those interested in running a validator node, the requirements are stricter:
- Minimum self-stake: 500,000 FTM
- Maximum validator size: 15x the self-stake amount
- Earnings: Staking rewards plus 15% fee from delegators
- Hardware: AWS T2.large EC2 (or equivalent) and 800GB of SSD storage
Advanced users can explore liquid staking, which offers higher yields without locking funds, though this involves greater complexity.
As of end-2022, Fantom’s network relied on 79 validators to create blocks on behalf of stakers.
Risks of Staking Fantom
Staking FTM is not risk-free. Cryptocurrency markets are volatile, and returns may not meet expectations. Always research the ecosystem and technology before investing. Only stake what you can afford to lose.
Risks include:
- Validator misconduct leading to loss of staked tokens.
- Market volatility affecting FTM’s value.
- Illiquidity during lock-up periods.
Frequently Asked Questions
Does Fantom support staking?
Yes. Staking FTM helps secure the network and rewards you with additional tokens.
Can I lose tokens while staking?
Yes, if your chosen validator acts maliciously. Always select reputable validators.
Are my tokens safe during staking?
Yes. Only you control your tokens. Safeguard your mnemonic phrase or private key.
What is the minimum staking amount?
You can stake with just 1 FTM.
How long does unstaking take?
Unstaking requires a 7-day waiting period.
What is liquid staking?
Liquid staking lets you earn rewards without locking tokens, ideal for advanced users.
Final Thoughts
Staking Fantom can enhance returns on your FTM holdings, especially given its competitive APY. However, it’s essential to believe in Fantom’s long-term ecosystem and understand the risks—including market volatility and illiquidity. Always conduct thorough research and invest responsibly.