Staking in the Cosmos Ecosystem: An Airdrop Guide
From December 2023 to January 2024, several crypto projects distributed rewards to users who staked Cosmos ecosystem tokens in their Keplr wallets. Let's dive into the future of staking Cosmos tokens and uncover activities that could boost your chances of receiving more retroactive airdrops.
What Does Staking Mean in the Cosmos Ecosystem?
Cosmos operates on a Proof-of-Stake (PoS) consensus algorithm, tailored for this blockchain as Tendermint. With Cosmos' architecture supporting the launch of parachains (i.e., additional projects and tokens within the Cosmos ecosystem), distributing new coins within airdrops serves as an incentive for users to stake.
This approach has been fruitful during bull markets, with the ATOM coin appreciating from consistent purchases and staking, rewarding users not just with ATOM but also with tokens from new Cosmos-based blockchains.
However, this strategy didn't yield significant results during the 2021-2022 period due to the unfavorable market dynamics. New assets failed to generate profits relative to the staked funds, leading to the algorithm's limited popularity.
Tokens Eligible for Staking
The scenario shifted dramatically at the end of 2023 with the launch of Celestia, a modular blockchain. Staking TIA coins enabled users to receive tokens from projects like Altlayer (ALT) and Dymension (DYM). Additionally, three more projects (Namada, Saga, Movement) have announced upcoming retroactive airdrops.
Hence, users can stake several assets to qualify for future airdrops:
- ATOM: The native token of the entire Cosmos network and the primary asset in the blockchain.
- OSMO: Osmosis is the largest decentralized exchange on Cosmos, with a market cap of $1 billion as of this writing.
- TIA: The Celestia network token surged 800% after its listing, climbing from $2 to $18 in three weeks. The project aims to continue rewarding stakers to sustain demand for its token.
- Secondary Cosmos ecosystem tokens: MANTA, DYM, AXL, INJ, ALT.
Staking Guide in the Cosmos Ecosystem
Participating in future retroactive airdrops within the Cosmos Hub network requires the Keplr wallet, the premier browser-based cryptocurrency wallet, available as a Google Chrome extension.
The process unfolds as follows:
- Purchase the necessary amount of ATOM coins on a centralized crypto exchange.
- Transfer ATOM tokens to the Keplr wallet. Within the wallet, you can also swap ATOM for other tokens if needed.
- Navigate to the staking section within the wallet by clicking “Stake with Keplr Dashboard.”
Staking with the Keplr Dashboard. Source: wallet.keplr.app
- Select the token you wish to stake in the “Chain” section.
Selecting the Token for Staking. Source: Wallet.keplr.app
- Choose a validator from the provided list.
Selecting a Validator for Staking. Source: Wallet.keplr.app
- Delegate your assets to the validator, effectively staking them.
Staking Tokens for Potential Rewards. Source: wallet.keplr.app
Funds are typically placed in official smart contracts, so withdrawing coins from staking (when the time comes) requires waiting a few days.
Upcoming Airdrops
Several well-known crypto projects slated to distribute rewards for staking tokens in the Cosmos ecosystem include Caldera, Pryzm, MilkyWay, Initia, Hyperlane, Sovereign, among others.
Validators through whom asset staking occurs may also distribute rewards.
Final Words
Staking within the ATOM ecosystem offers an additional income stream, particularly lucrative during bull markets. Furthermore, there are ways to hedge staking risks during the lock-up period: opening short positions of equivalent volume on a centralized crypto exchange can protect staked assets from potential losses due to price dips, thanks to the concurrent agreement.
