Osmosis (OSMO) Staking Guide

Osmosis (OSMO) Staking Guide

This guide will give you a comprehensive overview on Osmosis and how to stake your OSMO. Osmosis is a Layer-1, Proof-of-Stake (PoS) blockchain built using the Cosmos SDK that has optimized its design to be a sandbox for automated market makers (AMMs). The chain enables developers to design and deploy customized AMMs by using its various modules and leveraging Osmosis' on-chain governance system. Osmosis' native token, OSMO, grants holders the right to vote on proposed network changes and earn rewards for helping secure the network. Its first application, also called Osmosis, is an AMM that features ATOM and OSMO as its initial base trading pairs, with many more assets added since launch, making Osmosis one of the main options for swapping tokens in the Cosmos ecosystem.

Osmosis was first announced in October 2020 and launched in June 2021. It became the first Cosmos-based chain to popularize IBC (Inter-Blockchain Communication protocol) transfers. IBC transfers had been available months prior, but there was not much demand from the connected chains and the volume of IBC transfers was inadequate. Map of Zones illustrates an entirely different story today, quoting (at the time of writing) Osmosis with 1,981,654 IBC transfers over the last 30 days.

Please scroll down to the bottom of this article for the full Steakwallet staking guide, including a step-by-step walk through.

Why should I stake my OSMO?

Staking is the process of locking up a digital asset (OSMO) to provide economic security for a public blockchain, therefore, staking your OSMO helps secure the PoS Osmosis network. Further, most PoS blockchains are initially inflationary in nature, so staking your OSMO prevents you from getting inflated out of your position as you earn rewards for helping secure the network and validate transactions. Lastly, you can participate in network governance.

  • Secure the network. With OSMO, you have the power to contribute to the security and governance of Osmosis through staking and voting on governance proposals.
  • Earn rewards. When you stake to a validator, you are contributing to the security of the network and are rewarded with OSMO in return.
  • Vote for the future. Staking OSMO allows you to vote on governance proposals and contribute to making decisions on the future and direction of the network.

An additional bonus of staking OSMO is potential airdrop eligibility. Over the past few months, those who have staked their OSMO have been able to claim numerous airdrops. For more information on the latest airdrop updates and eligibility information, visit airdrops.steakwallet.fi.

What happens when I stake my OSMO?

As Osmosis utilizes a PoS consensus mechanism, you can delegate any amount of OSMO you hold to a validator, making you a delegator. Validators on the Osmosis blockchain (and most other PoS blockchains) validate the network by approving transactions. The more OSMO a validator holds, the more powerful they are and the more voting power they hold within the network, which allows them to validate more transactions, thus earning more rewards. By delegating your OSMO, you trust the selected validator to be a good network participant. From the earned rewards, the validator gives a certain percentage (stipulated by the network) back to the delegators that have delegated (staked) their OSMO to them.

That's how you earn rewards.

How much can I earn from staking my OSMO?

At the time of writing, the APY (Annual Percentage Yield) for staking OSMO is 108%.

For the most up-to-date rewards rate, you should check out the Steakwallet app.

What is the minimum amount of OSMO I can stake?

To stake OSMO, a minimum of 0.05 OSMO is required. This ensures you can stake and also pay the Osmosis network transaction fee. You should always make sure to have enough OSMO available to pay for network fees, as all blockchain interactions (such as sending transactions, staking, unstaking, and interacting with other dApps) require you to pay fees.

How do I stake my OSMO?

When you stake your OSMO, you are able to choose how much of your OSMO you want to delegate to the validator. You can stake any amount of OSMO, for which you immediately start accumulating rewards. You will not be able to use the staked OSMO for anything else or sell the assets during the period that the OSMO are staked.

Make sure you have enough OSMO in your wallet to pay for network transaction fees.

Please note: You will need to manually claim your rewards and re-stake them to earn the maximum possible rewards. You can learn more about manual reward claiming here, as well as look to the step-by-step tutorial in our guide below. 👇

Which validator is my OSMO staked to?

Currently, if you stake your OSMO with Steakwallet, your stake gets delegated to validators run by Figment. Figment is a reliable partner and one of the most trusted validator providers in the industry. We plan to offer more optionality in the future.

How do I unstake my OSMO?

When you unstake your OSMO, you can decide on the amount you want to unstake. Once you confirm the amount, your OSMO will now be "unbonding" from the validator. This process takes 14 days, during which your unstaked OSMO is not earning any rewards. When you unstake your OSMO, any unclaimed rewards you may have will be auto-claimed.

Please note: When you unstake OSMO from any given validator, you can unstake at most 7 times in a 14 day period. If you try more, the unstake will fail. You must wait for one of the previous unstaking entries to expire.

When will I start earning rewards?

When you start staking your OSMO and the delegation is confirmed, you will start earning rewards on the staked amount instantly.

How do I claim my staking rewards?

On Cosmos SDK-based blockchains, you need to manually claim earned rewards. On Steakwallet, there is a “Claim Rewards” button right below your staked balance that shows your earned rewards available for claiming. You can learn more about manual reward claiming here, as well as look to the step-by-step tutorial in our guide below.

Does Steakwallet charge a fee or take a cut of my rewards?

No. Steakwallet never charges a fee or takes a cut of your staking rewards.

Is OSMO staking safe?

Given that Steakwallet is a non-custodial wallet, you maintain full custody of your assets and always remain in control.

While staking OSMO is relatively safe, and while we work together with Figment (one of the most reliable validators in the industry), there's always a risk of slashing. If a slashable event happens, you could lose a portion of your staked OSMO.

There are two ways in which you could be slashed:

  1. If you delegate to a validator that is offline for over 20 hours (assuming a 7.22s block time), you will lose 0.01% of the tokens you have delegated to that validator.
  2. If you delegate to a validator that signs the same block twice with the same key, you will lose 5% of the tokens you have delegated to that validator.‌

However, this is a very rare occurrence. Staking is one of the safest way to earn rewards in crypto.


Staking OSMO through Steakwallet: Step-by-Step Guide‌

Staking Semantics

Staking OSMO tokens is relatively straight forward. Once you stake your tokens, your OSMO immediately begins to earn rewards. OSMO staking rewards must be manually claimed and restaked. When unstaking, there is a 14 day unbonding period, after which you can withdraw your OSMO.

Key OSMO Staking Considerations:

  • Rewards are distributed daily
  • 108% reward rate (make sure to stay up to date on the Steakwallet app)
  • 14 day unbonding period
  • Rewards must be manually claimed and restaked
  • Make sure to leave a little OSMO leftover in your wallet for bonding and unbonding fees (note that Steakwallet automatically leaves a small amount of OSMO in your wallet to account for fees)

For this guide, we will walk you through the steps of setting up your Steakwallet from scratch, staking your OSMO, and claiming your rewards. If you already have your Steakwallet set up, you can scroll down to the staking section.

Steakwallet can be downloaded on either the iOS App Store or Google Play Store. Steakwallet is a non-custodial wallet, and requires you to keep track of your own Secret Phrase. You can learn more about non-custodial wallets and Secret Phrase management here.

  • To begin staking with Steakwallet, you first need to download the wallet from either the iOS App Store or Google Play Store onto your mobile device. Once downloaded, you can open the app and begin the setup process.
  • Start by creating your Steakwallet account and follow the steps on the screens below. Simply create a new wallet, agree to the terms, and backup your 12 word phrase. It is extremely important that you backup your Secret Phrase. Be sure to write down and safely secure your wallet's 12 word backup phrase. This is the only way to recover your  wallet. Once you have created your wallet and backed up your 12 word phrase, you are ready to use Steakwallet.‌

  • Now that you have set up your account, welcome to the Steakwallet home screen. In our Prime Yields section, you can find the best opportunities to put your money to work and scroll through the many different tokens that you're able to manage in-app (from simple token management, to yield opportunities via Yearn Vaults and our signature 3-click native staking integrations).
  • Select “Osmosis” from the list and you'll arrive at the token profile screen, showing you recent performance, available balance, staked balance, and other relevant staking information.
  • Click “Receive” to bring up your OSMO address so that you can deposit OSMO into your wallet.
  • Once you have funded your wallet with OSMO, head back to the staking section on the token profile screen.
  • When you are ready to start staking, click “Stake”.
  • From here, select how much of your OSMO balance you wish to delegate. Important reminder: Be sure to leave some OSMO left over for transaction fees. Select the amount of OSMO you want to stake, click “Preview Stake”, and then confirm the stake on the next screen.‌
  • After waiting a couple of seconds for confirmation, your stake will be confirmed and you can view the transaction on the explorer. Congrats, you are now staking your OSMO through Steakwallet! If something went wrong, you'll receive an error screen.
  • You are required to manually claim your OSMO rewards. To manually claim staking rewards, navigate to the token profile page. Beneath where it shows your Staked Balance, there will be a box labeled “Claim Rewards”. If you have unclaimed rewards that have accumulated, then the amount you have earned will be listed. To claim, simply hit “Claim” twice and voilà – your rewards will now be reflected in your Available Balance.
Don't forget to re-stake these rewards to maximize your returns. Since claiming rewards and staking are both on-chain transactions, they require a transaction fee – make sure to have enough tokens available to cover those transactions costs. If you don't claim your rewards and re-stake them, you're missing out on some extra compound yield and will not earn the highest possible APY.

More on Steakwallet

Steakwallet is a mobile-first, multi-chain, non-custodial wallet that allows users to easily stake tokens and earn rewards. Steakwallet can be downloaded on the iOS App Store or Google Play Store, allowing you to instantly secure, send, receive, and natively stake over 11 different cryptocurrency assets. Being non-custodial, Steakwallet gives you full ownership of your assets and wallet private keys. With Steakwallet, you are always in control of your assets.


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