Guide: How To Stake DOT On Your Ledger
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Before we start, let’s answer a few important questions.
What is staking?
Staking performs a function similar to mining by selecting a network participant to add the most recent transaction packet to the blockchain in exchange for a reward.
Cool stuff!
So what is Polkadot?
About Polkadot (DOT)
At the time this article is written, Polkadot (DOT) is ranked as the 11th biggest cryptocurrency by market cap.
Polkadot uses NPoS (Nominated Proof-of-Stake) as its consensus mechanism. There are two roles in NPoS:
- Validators: they are responsible for producing new blocks, validating parachain blocks, and guaranteeing finality. Block production slots are assigned to validators based on the stake and Polkadot randomness cycle using BABE (Blind Assignment for Blockchain Extension).
- Nominators: they can choose which validator they want to back with their coins, put in another way, people who do not have the necessary hardware and knowledge to be validators, but still want to support the ecosystem of DOT, can stake their DOT coins to the validator of their choice (to nominate validators).
OK, knowing these things we are ready to stake some DOTs!
Staking On DOT — The Prerequisites
In order to stake DOT, there are a couple of things you need to get in order first. Here’s what you need to know:
- You need to have a Ledger hardware wallet (starting at €59). And you need to download Ledger live app. Detailed steps on how to do this can be found on the Ledger official website.
- You need to download the Polkadot App in your Ledger and set up your account.
- Make sure that your Ledger live and DOT App in Ledger are updated to the latest versions. Otherwise, it could cause problems later.
- You already have more than 160 DOT coins in your Ledger account. Because when you bond your 160 DOT, you need some extra for the gas fee. Since DOT network has very cheap gas fees, 161 DOT should be enough.
Step-by-Step Guide How To Stake Polkadot (DOT) On Ledger
Step 1: Go to your Polkadot account and click “Manage assets” button on the top right corner.
Step 2: Click “Bond”.
Step 3: Enter the amount you want to bond and then click “Continue”.
Step 4: You need to enter your password and approve the transaction from your ledger.
Step 5: You can nominate up to 16 validators. It is important to scroll through the list even though it is very long. Remember: you want to choose the ones with low commission, and at the same time, not oversubscribed and have been nominated before. After you have selected the ones you want, click “Continue”.
Beware that nominating comes with a risk of being penalized (slashed) and losing some of your staked DOT if the validator you choose behaves badly or deviates from their protocol. Slashing increases security in the network as nominators have the incentive to pick validators with a strong performance record.
Step 6: You need to confirm the staking nominations on your Ledger.
Congratulations! You have successfully staked DOT.
After some time you will see the first confirmations for your received rewards showing up. To check your rewards, you can scroll to the bottom of your Polkadot account page and see the details.
Note: You can unbound anytime but it takes 28 days for your DOT coins to be back to your account again.
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