What Is Cosmos?
Cosmos is a decentralized network of independent blockchains designed to create an internet of blockchains. Using the Tendermint Byzantine Fault Tolerance (BFT) consensus algorithm and Proof of Stake (PoS) mechanism, Cosmos aims to achieve scalability, interoperability, and usability across different blockchain platforms.
Is Cosmos Staking Safe?
For the average user, staking ATOM tokens is as safe as simply storing them in your wallet. All transactions, whether in a wallet or staked, are processed by smart contracts and the blockchain without human intervention. Therefore, staking offers the same level of reliability and security as keeping tokens in a wallet.
Why You Need to Stake Cosmos?
Staking is an integral part of blockchains operating on the PoS protocol. Let’s explore the main reasons users stake ATOM:
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Supporting the Cosmos Blockchain: For the stable and secure operation of the Cosmos blockchain, transaction validation is required, which is only possible with a large and decentralized volume of staked ATOM tokens. This is why many users participate in staking their favorite blockchain’s tokens.
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Investments: Users who invest in tokens for the long term choose staking as an additional income multiplier and protection against inflation. Staking is as reliable and safe as storing tokens in an address while providing good returns.
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Exploring New Features: Many users limit themselves to simple token transfers. However, some want to explore all the blockchain’s possibilities, thus experimenting with swaps and staking.
Storing and Staking ATOM
You can store ATOM tokens and stake them simultaneously. For example, allocate some tokens for long-term investment and stake them, while keeping a small portion for operational purposes, such as paying transaction fees for ATOM tokens or NFTs. You decide how many ATOM tokens to stake and can also withdraw tokens from staking.
I Want to Learn More About Staking ATOM
We have prepared a special tutorial to help you understand ATOM staking - Learn more about staking ATOM