Fantom Staking Guide – How To Stake FTM?
Fantom (FTM) is now becoming one of the most popular layer one blockchain network. It is being considered as an alternative to the traditional Ethereum network by the developers. One can easily earn cryptocurrency passively by staking Fantom. The lower cost of the blockchain network and its comparatively higher speed is making it popular layer one blockchain network.
After being able to raise about$40 billion in December 2019, the mainnet was launched by Fantom. Some of the developers and experts termed it as “Ethereum killer” similar to many other alternatives of Ethereum that provide better scalability to the consumers such as Avalanche (AVAX) and Solana (SOL).
Fantom is increasing its scope continuously since its inception. Looking at the Total Value Locked (TVL), it is considered among the 10 most important blockchain networks. It stores a worth of about $1.3 billion in total value locked (TVL).
Fantom can be staked in order to earn passive income through blockchain network as it follows a specialized proof of stake mechanism. Being empowered by its native token FTM, it can be staked and help the traders to grow in the crypto industry. Here is a detailed article about the methods of staking Fantom and all the pros and cons related to staking it.
What is Meant by Staking?
Staking is an established mechanism that is used to choose the users who are provided the consent to be a participant in the consensus protocol. The tokens are locked by the nominators and validators, and they receive the awards as a result.
If one has more contribution in the stake, it has nothing to do with the reward he will receive. The reward is distributed among all the validators by the staking system independent of the contribution in stake. Therefore, it may be noticed that reward may not be equal to the contribution made at the present time.
How Fantom Operates?
Fantom utilizes a direct acyclic graph (DAG) instead of the traditional blockchain network. This helps in carrying out the transactions at a faster rate and provides more scalability. The transactions can be carried out in seconds using the Fantom network. Therefore, it allows millions of transactions per second.
What is Fantom Staking?
The Fantom blockchain is considered to be a safe platform to trade smart contracts. It is compatible with EVM and can be scaled easily. Therefore, using Fantom, the Ethereum decentralized apps (dApps) can be easily installed and run. Fantom is designed in such a way where in addition to supporting the decentralized apps and the digital assets, it also supports the decentralized finance solutions.
Fantom is operated through an advanced proof of stake mechanism known as Lachesis. Due to the aBFT algorithm, this version helps in carrying out transactions at relatively higher speeds, charges lesser fee and can be easily finalized. Providing a sound level of decentralization, an open-source environment while scaling a number of nodes all around the world without permission are some characteristic qualities of aBFT.
The assets of the consumers are made a lot safer by using the staking method on the blockchain. The assets have to be locked for a certain period of time while keeping them with him in his wallet. Those assets can only be accessed and unlocked by the owner. This method is called staking.
The assets being locked for a specified time period helps the developers grow better. The validators provide the security by using their staked tokens and validating the transactions. If they behave according to the rules made by the protocol, these staked tokens then become an incentive for them economically. The investors actively participate in the staking process and thus earn the rewards in the form of FTM tokens and thus secure their network.
Method Of Staking Fantom (FTM)
In order to prevent the Sybil attacks on the consensus mechanism, 500,000 FTM is the minimum amount required to run a validator. The attacks where multiple identities are falsified in order to get any prohibited advantage over any network are known as sybil attacks. Delegating an FTM to a validator is easier as the required amount of the validator is relatively very high.
Strategies to stake Fantom: One can stake Fantom by using any one of the following techniques.
- Fluid staking
In order to get better returns, FTM tokens can be staked for a time period of two weeks to one year as per the decision of the investors. The staking reward that they get will be dependent on the time for which assets are staked. The assets locked for longer period results in higher reward ratio.
- Liquid staking
Using the liquid staking process, the sFTM can be minted by the investors to get a better ROI. Moreover, staking the farm tokens, participation in the liquidity mining, farming the LP rewards or other method could be adopted using liquidity staking.
- Custodial staking
The centralized exchange (CEX) platforms such as Coinbase or Binance can also be used in order to stake FTMs by the investors. By using this method, they can get the reward percentage of about 1%.
Steps involved in Fantom staking: One can follow these easy steps in order to stake Fantom.
- It is necessary to stake Fantom that one owns at least 1 FTM.
- Visit the page for Fantom staking and then choose for the option Stake your FTM.
- Look for a wallet compatible to your currency such as MetaMask, and then log into it. The wallet can be easily accessed through the mobile phone or the desktop computers. If one already owns a wallet, he can access it by using the set keyword or seed phrase. In case, if one owns no wallet he can easily create one.
- After the creation of wallet, one needs to deposit the FTM into the wallet address of Fantom Opera. This can be done via an exchange or using any other wallet address.
- After that choose the staking option.
- Then choose a delegation and an amount, add a delegation.
- After selecting the lock-up period, choose the confirm option.
When one talks about choosing the Fantom optimal wallets, there are a number of options that are available. Any wallet that is compatible with Ethereum can be used for staking FTM such as Coinbase wallet, MetaMask or any cold wallet such as Ledger as the Fantom Opera network is compatible with the EVM blockchain network and is a second layer blockchain network.
After the creation of an account on Fantom, by clicking on the create wallet button, the Fantom wallet (fWallet) can be downloaded.
Platforms For Staking FTM
Fantom can be staked on multiple platforms other than its local blockchain networks. These platforms may include custodial blockchains or the decentralized exchanges (DEXs). Below are mentioned some platforms that can be utilized by the consumers to stake Fantom.
- Ledger
Smart contract interaction can be used for staking via any hardware wallet such as Ledger. One can sign in from the Fantom FTM Ledger Nano S application for staking using the Fantom fWallet. The staking process then can be carried out by using the Stake menu option given on the website.
The support of Fantom network on the Coinbase network was announce by Fantom in September 2021. The users if the Coinbase wallet can also engage with the Fantom decentralized apps by accessing the Fantom network. They can stake FTM and earn rewards through it by connecting the Coinbase wallet to the Fantom wallet.
One need to deposit a sufficient amount to the exchange in order to start the staking process of FTM on Binance. After that pick up the suitable product for you after visiting the Binance Earn website. Then the asset needs to be locked for a certain period of time that may vary between 30, 60 or 120 days. In order to get reward for up to 14%, one can opt for more extended lockup periods.
- Kucoin
One can also earn using the Kucoin platform in the same way as by depositing the FTM token of Kucoin. After looking upon the rewards that it offers and the time period required for locking the asset and choosing the product that suits you the best, click on the option of Subscribe.
Can Staking FTM be Considered Safer?
As the validator nodes cannot have the access to the staked FTM tokens, one can consider the staking process of FTM as a safer one. But it also sets the obligation of remembering the key word or seed phrase to access your tokens. However, in case the validator is not reliable or does not behave in an appropriate manner, one can also lose his funds same as many other proof of stake mechanisms. Therefore, one should always go for selecting the active websites or communities and twitter accounts while looking for the Fantom validators.
Method To Stake Other Tokens on Fantom
In order to earn passive income, Fantom provides a flexible and dynamic ecosystem, that enables the users to stake a number of decentralized financial tokens. When it comes to staking the native tokens by using any of the mentioned platforms, it will require any wallet such as MetaMask or other that would be compatible to the Fantom Opera network. The Fantom is staked in the same way then as in centralized exchanges such as Binance. It acts as a market where one can easily trade the non-native cryptocurrencies.
Tokens that can be staked in Fantom: These are some of the most commonly known tokens that the consumers can stake on Fantom.
- Spookyswap
The largest decentralized exchange on Fantom is Spookyswap. Its native token is BOO, and it has store of worth $777 millions in the TVL. One can bond them with FTM in order to increase the liquidity and the farm yield. One can buy the tokens from the exchange or using the Spookyswap platform, swap them in order to stake BOO. Look for your position by connecting the wallet with the Fantom Opera network and then start the earning process.
- BeethovenX
A decentralized exchange that is driven by the community. It is also considered as a decentralized financial powerhouse and an automated market maker (AMM). The native token of BeethovenX is known as BEETS that resides on the Optimism chain and Fantom Opera. One can get almost 31% APR by staking it.
One needs to connect the Fantom Opera after the deposition of FTM and stake Beets following the procedure that is given about choosing a validator and the lockup period of the token.
- QiDao
QiDao is another protocol integrated with Fantom that is governed by the community and is autonomous. By using it, one can borrow the stablecoins as a collateral against the crypto assets that includes zero interest value. MiTokens are the stablecoins that are hooked with the UD dollars and are further used to pay or repay the tokens.
- Scream
Fantom empowers another protocol that is decentralized known as Scream. This platform behaves in the same manner as Compound (COMP) and Aave (AAVE). It allows the users to earn almost 58% APR by staking the tokens. However, these rewards can increase for up to 82% APR for the liquidity providers.
Method to Run a Fantom Node
The validators are considered as important components of the Fantom nodes and are required for operating the nodes completely. The security of the network is boosted, and the new blocks are created due to the participation of the validators in the protocol while operating the complete node. In order to run a Fantom node in an effective way, one has to learn certain skills and technical requirements. The mandatory requirements to operate a Fantom node are mentioned below.
- FTM: The minimum requirement to operate a complete Fantom node is 500,000 FTM.
- Validator Size: The maximum required size of the validator is about 15 times of the size of the amount that is self-staked.
- Hardware: A storage of about 4.5 TB of Amazon EBS General Purpose SSD (gp2) or somewhat equal to it and AWS EC2 m5.xlarge with four vCPUs (3.1 GHz) are the minimum hardware requirements to operate a Fantom node.
- Reward: At present, the reward it is offering is up to 13% of the APY. It includes the 15% reward of the delegator and the normal APY earned by self-staking the tokens. Depending on the percentage of the staked tokens, APY changes with it. One can visit the Fantom Foundation website, in order to get updated about the current APY rates.
Step wise Method for Operating a Full Node
Here is the complete process that would help to operate a complete node properly.
- In order to run a node, the users can utilize any cloud provider or a hardware device. It is preferred to use reliable cloud providers available such as Amazon AWS etc.
- The non-root users can also be set up by the consumers.
- After that, the user needs to install the building tools that are required. Firstly, Go has to be installed and Opera after that.
- The users need to get their on-chain Fantom validator node registered. For this purpose, a wallet has to be created for the validator. This wallet then becomes the identity of the user over the network. It will also be then utilized sign the messages and to authenticate the transactions etc.
- The consumers then have to start the node again in the validator mode in order to run their own node. After they have to click the exit option and shut down the Opera window. After that, go back to the initial command by moving to the window again.
In order to understand the complete specifications and details about running a full node properly, the users can look upon to the instructions provided by Fantom.
Earning From Fantom Staking
In case one chooses the minimum amount to stake and the minimum lockup period for staking FTM, still one can make about 5.01% through it. However, 15.31% is considered the maximum APY till date and the assets can be locked maximum for about one year. To get an estimate of how much rewards one can earn through staking a certain amount of FTM can be calculated by using the FTM staking award calculator.
During the occurrence of the bear market in 2022, the prices of many cryptocurrencies and the FTM tokens have gone down. So, one should be aware that staking and locking the FTM tokens in such situation will not increase the overall value of the asset rather only the quantity of it. the funds can also become illiquid if they are staked and locked therefore, one should stay on the safe side and trade cautiously during such critical situations as it can also lead him to a difficult situation.
Conclusion
One can earn a considerable amount of yield staking the Fantom tokens. However, one should remain cautious while staking FTM and avoid it during the bear market as it is one of the cryptocurrencies that have suffered during the bear market. Therefore, it is important to carry out a thorough research about everything before putting on your investment in trading.
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