Tezos: Digital CommonwealthTezos is a self-amending cryptoplatform that is governed by its stakeholders. Its Liquid Proof of Stake (LPOS) system is an elegant and decentralized way to allow any holder of XTZ to participate in securing the network and earn rewards. In Tezos, there are bakers (those who directly participate in the baking process), and stakers (those who delegate their own stake to a baker). To bake on your own, you need at least 1 roll of Tezzies (10,000 XTZ) and dedicated hardware that can be run 24/7. If you do not wish to bake yourself - as indeed it is a time consuming process that requires expert knowledge - or if you do not have 10k XTZ, worry not, you can delegate to a baking service. Baking services will take a small (or large - do your research) fee for their services and pay out your earnings directly to your wallet frequently. Make sure to read the terms and conditions, and check whether a service is over delegated or still has free staking capacity.
A Baker's LifeIt is good to know that there are blocks and cycles in Tezos. Every 4096 blocks, a new cycle begins. When you bake, you register for baking rights in advance. The protocol uses your staking balance from 7 cycles prior. This is about 21 days, depending on network speed. Baking rights are calculated based on everyone's staking power, which is the amount of delegated coins one holds at a given snapshot. You can send coins in and out of your delegate address at any time. The network automatically makes a snapshot of your balance. This allows for seamless reward earnings.
How to delegate and earn rewards in Tezos?The process is very straightforward.
(1) First, create a Tezos wallet using your favorite wallet service. Make sure that the wallet you use is trusted by the Tezos community.
TezBox and
Galleon are recommended at time of posting.
(2) Once you have generated a
tz1 address, confirm that you have securely saved your private key information. Do not share this with anyone.
Fund your address with XTZ. You can acquire Tezzies from various exchanges.
(3) Create a KT1 delegate address within your new wallet. This will cost you about ~0.25 XTZ in fees.
Send XTZ in and out of your KT1 address at anytime. Send tokens that you would like to delegate to a baking service to your KT1 address.
(4) Delegate your Tezzies to the address of a baking service.
Choose a reliable service by browsing
BakingBad,
Tezos Nodes,
MyTezosBaker and/or other delegation service listing sites.
Do your own research and choose according to performance as well as your personal taste.
(5) Simply be patient and wait for 7 cycles. Earnings will appear directly in your account and will keep rolling in as long as you delegate your tokens (and your chosen baking service pays out). Monitor your earnings via
TzScan.
Enjoy!
There are some really cool baking services out there to choose from. bake on!