Staking is the process of participating in the operations of a blockchain network by locking up a certain amount of cryptocurrency to support the network's functions.
It involves two types of users, validators and delegators. Validators are network participants responsible for creating new blocks and validating transactions. Delegators do not run a node themselves but instead, delegate their coins to a validator. For the Polkadot network, delegators are known as nominators. Both validators and delegators/nominators receive rewards in the form of cryptocurrency for their participation in the staking process.
Staking is possible with Proof-of-Stake (PoS) blockchains like Polkadot ($DOT). Let’s learn how to stake $DOT and earn some rewards!
Step 1
Acquire some Polkadot ($DOT).
The easiest way to do this is by buying it in a centralized exchange. Staking, in general, requires a certain amount of cryptocurrency to be eligible for staking, and there are also gas fees to be paid. You need a minimum of 1 DOT to join a nomination pool but have at least 2 DOT to account for possible gas fees.
Step 2
Set up a Polkadot wallet.
There are many different types of wallets but for the purposes of this guide, we’ll use Nova Wallet. You can download it from Google Play or the App Store.
You can check our guide on how to set up a Nova Wallet here.
Download the wallet and make sure to secure your seed phrase.
Step 3
Fund your wallet with DOT.
Send the DOT you bought from the centralized exchange to your new wallet.
On the Assets page of your Nova Wallet, tap “Receive.” Select “Dot”. Then, select "Copy address".
You can view these exact steps in detail in our short guide of “How to Receive Crypto from Another Wallet” using Nova Wallet right here.
Go to whichever centralized exchange you have DOT on. Go to “Wallet” then click “Withdraw” and select “DOT”.
Then, paste the previously copied address on the address bar of the centralized exchange and send the appropriate amount of DOT coins.
Your Nova Wallet should now be funded.
Choosing amount of DOT to withdraw from a centralized exchange
Step 4
Navigate to the Staking tab on your Nova Wallet.
Open your now funded Nova Wallet and navigate to the Staking tab found on the bottom of your screen.
You will see a selection of different networks. Click “DOT”.
Choosing “DOT” from the selection of Staking Networks
Step 5
Enter the amount of DOT you wish to stake.
Some staking tips will appear. Review them then click “Start Staking”.
Enter the amount you wish to stake.
Depending on the amount you input, you will be recommended either direct staking or pool staking.
Inputting amount of DOT to stake
Step 6
Choose which type of staking you wish to do.
Choose between either Direct Staking or Pool Staking by clicking “Recommended”.
The features of both types of staking will appear on the screen. Choose which you prefer.
As of Feb 1, 2024, you would require 621.93 DOT to participate in Direct staking. This amount changes with time. If your wallet does not have the required amount, you will have to do “Pool Staking”.
The rest of this guide will focus on “Pool Staking”.
For Pool staking, you can also choose your nomination pool. By default, the nomination pool managed by the Nova Wallet team is chosen. You can click it to bring up a pool list and change your pool.
Features of Direct Staking and Pool Staking.
Tapping the chosen pool brings up the pool list
List of Nomination Pools you can join
Step 7
Confirm your transaction.
Once you finalize your nomination pool, click “Continue”.
This will bring up your transaction details. Review them and click “Confirm”.
You are now staking your DOT in a nomination pool and can earn rewards. Remember to collect them every so often!
Clicking “Continue” to move on to confirming transaction
Clicking Confirm to finalize transaction and stake DOT
While staking may seem confusing at first, it is an effective way to earn interest on coins that you already plan on holding long-term. Keep practicing and you’ll get the hang of it in no time!
