What is staking & how does it work?

Staking is the mechanism used to ensure the validity of transactions in a proof-of-stake blockchain. Blockchains incentivize users to stake by providing annual percentage yield (APY) rewards in the form of more tokens — in this case, Cosmos provides stakers with more ATOM tokens.

How do Cosmos stake atom tokens?

Cosmos stakers can stake ATOM via a centralized exchange, directly delegate to a validator, use a liquid staking pool, or run their own validator node. Each of these methods comes with their own advantages and drawbacks. Cosmos stakers can use Authz and REStake to auto-compound staked ATOM tokens, which can increase APY.

What is Cosmos and how does it work?

Cosmos is a rather unique blockchain, which is powered by its native cryptocurrency known as ATOMs. The network’s goal is to combine several blockchains into a single hub. This means that other blockchains can connect to it – and as such with each other indirectly.