Fantom is a next-generation cryptocurrency and a platform based in DAG designed to solve pressing issues faced by cryptocurrencies today, including scalability and speed. Fantom also aims to provide a more user-friendly experience than traditional cryptocurrencies.
How does Fantom operate?
Instead of a blockchain, Fantom uses a (directed acyclic graph) DAG data structure. This allows for more scalable and faster transactions. Transactions on the Fantom network are confirmed in seconds, and it can handle thousands of transactions per second.
What is Staking?
Staking is the process of holding funds in a cryptocurrency wallet to enable the blockchain’s operations. Stakers are rewarded for their contributions to earn passive income and newly minted coins.
Why you should stake FTM?
- You earn interest on staked FTM tokens
- You assist in the protection of the Fantom network.
- It enables decentralization of the network
- The current rewards rate on FTM is 20% per year.
Procedure to stake Fantom
Step 1 — Create an FTM wallet
To stake your Fantom, you must first download the FTM wallet via the progressive web app. The Wallet can be used in Windows, Mac, and Linux operating systems. There are three options, which are “Create New Wallet,” “Import Existing Wallet,” or “Recover from Seed.” Users who have FTM other wallets will need to select the “Import Existing Wallet.”
Users who have already possessed a wallet can choose the three options for recreating it: Using their mnemonic phrase, using their private key, or using their JSON file. After the user has entered their information, they will need to set a password. The final step is to click on the “CreateWallet” button.
If you already have a Metamask account, it can link to the Fantom network.
New users will have to first create an account on the Fantom website. After creating an account, the user will download the FTM Wallet. The next step is to open up the Fantom Wallet and click on the “Create New Wallet” button. A new page will pop up, and the user will be asked to enter.
After the user has created their Wallet, they will be brought to the main page. On the main page, there are several options, including sending FTM, receiving FTM, buying FTM, staking FTM, or interacting with DApps.
The first step for staking Fantom is to click on the “Stake” button. This will open up a new page with five options: Stake, Unstake, Timestamp, History, and Auto-Stake.
Step 2 — Obtain FTM tokens
The user will need to have FTM tokens to stake Fantom. There are several ways to obtain FTM tokens, including buying them on exchanges, earning them through airdrops or bounties, or receiving them as payments. For example, on exchanges like Binance, if your goal is to trade FTM/USDT, you can access it through the FTM/USDT trading pair.
Alternatively, onFTX, the FTM/USD pair offers liquidity to the FTM/USD rate.
Step 3: After acquiring FTM, you may send them to your Fantom wallet address
FTM tokens may be obtained in various ways, including via the Ethereum network, Binance Chain (BEP-2), or the Fantom Opera chain. Do this, click on the “Send” button on the main page. A new page will pop up, and you will need to enter your recipient’s address, the amount of FTM you want to send, and a memo (optional). When you are ready, click on the “Send” button.
Step4:Staking of the Fantom tokens
The user will be brought to a new page to enter the amount of FTM tokens they want to stake, the duration of their stake, and their FTM wallet address. The next step is to click on the “Stake” button and confirm the transaction.
You will be asked to pick a validator. Pick a validator from the list and click on the “Select” button.
Choose the amount to stake and follow the on-screen instructions.
A validator is an entity that checks the validity of transactions and blocks on a blockchain.
To keep track of staked tokens, the user can click on the “History” tab. This will show them the total amount of FTM they have bet, the current rewards, and the date and time of the last update.
You may look up each validator’s details on the Validators page on the Chain website. The official fantom website has a calculator that you may use to figure out your projected staking earnings. The funds are unstaked after seven days, during which time they do not receive compensation.
Things to keep in mind when staking Fantom tokens
First, the user must have Fantom tokens to stake them. Second, the user must select a validator node to participate in the validation process. Third, the user must enter the amount of FTM they want to stake and the duration of their stake. Fourth, the user must enter their FTM wallet address to receive their staking rewards. Fifth, the user must confirm the transaction. Sixth, staked, some tokens are unstaked after seven days. Seventh, the user can keep track of their staking progress on the “History” tab. Finally, the user can use the Fantom Wallet calculator to estimate their projected to earn staking rewards.
Can I lose my tokens when staking?
Yes, it is possible to lose your tokens when staking. If the node acts maliciously, your tokens may be at risk. Additionally, if the validator you choose is slashed (meaning they are found to violate the rules), you may also lose some of your tokens.
What happens if a validator goes offline?
If a validator node goes offline, your tokens will remain safe and not be at risk. However, you will not receive any rewards for your stake when the validator node is offline. Additionally, if the validator remains offline for an extended period, your stake may be “unstaked,” and you will not receive any compensation.
How often will I earn staking rewards?
Rewards are typically distributed every week, but this may vary depending on the validator.
What is the minimum amount of tokens can I stake?
The minimum amount of tokens that you can stake is 1 FTM.
Can I use my staked tokens while staking?
No, you cannot use your tokens while staking fantom nodes. Your tokens must be in your Wallet to participate in the validation process to receive the staking rewards.
What is a slashing event?
A slashing event is when a validator is found to violate the rules. If this happens, you may lose some of your tokens.
Can I stake my tokens on multiple validators?
Yes, you can stake fantom tokens on multiple validators. However, you will only earn rewards from the validator you have chosen to stake your tokens on.
Other in-built features
The Wallet includes the following
- A clean and user-friendly interface
- One-click staking
- Real-time validator statistics
- Fast and secure transactions
- Support for multiple languages
Unique features
- fUNI – Swapping from wFTM to fUSD is possible using this function. Users may interact with their Liquidity Pool. It is strongly urged that newcomers become familiar with the concept of impermanent loss before utilizing this software.
- fMINT – This staking program allows users to stake their wFTM to earn rewards. This can include assets like fLINK, fGEM, and fCAT. This is commonly referred to as debt financing or leverage.
- fSWAP – This is the built-in exchange that allows users to swap one asset for another without leaving the Wallet. For example, a user could change fLINK for wFTM.
- To avoid liquidation, users must keep their C-Ratio constant. The C-Ratio is the Collateralization Ratio, and it represents how much collateral an individual has to support their position. The intriguing aspect is that if your C-Ratio is high, it indicates you have a lot of momentum on the market. If it goes below 300%, you will be liquidated, and your wFTM will be disabled until the ratio falls below 300%.
- Governance – Users of fWallet have a voice in its future. Through fMINT, users may propose and vote on changes that they would like to see implemented into the Wallet.
Closing thoughts
fWallet is an exciting new development in the world of cryptocurrency. It offers users a safe, secure, and easy way to store and trade their assets. Additionally, it provides users with a voice in the Wallet’s future. Before investing in anything, it’s always a good idea to conduct your research (DYOR). To be successful in the long run, mass adoption is required, much like with other cryptocurrency projects, to avoid risks.
Source: https://www.cryptopolitan.com/how-to-stake-fantom/