Staking of cryptocurrencies offers two options for investors: online and cold staking. Online staking is when you purchase a particular amount of crypto tokens, and you choose to store them in digital wallets. Most trading platforms offer online staking, making it more common to investors than cold staking. But in this article, we’ll focus more on using cold wallets for staking.
What is Cold Wallet Staking?
Cold staking is when you buy crypto tokens and freeze them on an offline wallet, known as a cold wallet. You can do this using tokens of Proof-of-Stake blockchains such as Ethereum 2.0 and Polkadot. During this staking period, you will not be able to use your funds although they are stored in your hardware wallet. This makes staking more secure and more environmentally friendly than online staking.
However, there are rules when using cold wallets to stake on platforms. Usually, you will only get the corresponding rewards if you only remove your funds after the staking period ends. Moreover, the rewards can vary depending on the blockchain network you choose to stake with.
Advantages of Cold Staking
Using cold wallets to stake is not commonly discussed, but offers advantages to online staking. Here are some major benefits of cold staking.
Offers Excellent Security
Cold staking uses offline hardware wallets to store your assets. Your funds are not connected to the internet, which is why it’s not prone to cyberattacks. On the contrary, online staking is at higher risk of being infiltrated by cybercriminals because it is online. However, it’s still essential to do your in-depth research when using cold wallets as there are still fake exchanges and companies lurking.
Requires Less Energy
Another advantage of cold staking that most investors should know is its low energy requirement. Using offline wallets reduces the energy consumption of using computers and other digital tools used for mining and storing cryptocurrencies. You’re not only keeping your funds safe from cybercriminals, but you’re also contributing to protecting the environment while earning.
Ease of Use
Staking is an easy way to earn passive income on your frozen cryptocurrency. Once you’ve set it up, there isn’t much to do but receive your rewards.
Although using hardware wallets offer excellent advantages, cold staking experiences will still differ depending on which company you trust when staking. It’s essential to know the most reliable place to use a cold wallet. One of the known companies offering cold staking is RockX.
About RockX Staking Platform
RockX is a Singapore-based digital asset platform allowing cryptocurrency investors worldwide to stake assets securely. It has been in the industry since 2019, proving its experience in the industry. RockX is one of your ideal options to grow your digital assets through staking.
RockX offers the use of cold wallets such as Ledger to optimise your staking experience. They have various tokens that you can use for cold staking, including the popular coins — Polkadot, Oasis, Terra, Solana, and Eth2.0.
How to Use Cold Wallet to Stake at RockX
There are various ways to use your cold wallet to stake at RockX, depending on the coins you would like to stake. In this guide, we’ll discuss the step-by-step process of staking Polkadot tokens for you to get started with us.
Before you start cold staking DOT or any other token with RockX, it’s essential to take note of these various considerations:
- To have an excellent staking experience at RockX, you have to check if you have updated your Ledger Live to its latest version.
- You should also consider checking if your Ledger device is running the latest version of its firmware. Doing so, will reduce issues along the way.
- Before staking, you should ensure that you have a DOT account and have installed its web extension. If you have a previous DOT account, you can just import it into the browser extension.
Here are the steps to cold staking Polkadot to earn rewards. The steps include bonding of assets followed by nominating validators.
How to Bond Polkadot Assets
When cold staking DOT at RockX, the first thing you need to do is to bond your assets so that you can nominate validators. The minimum to bond is 120 DOT for you to get the corresponding rewards.
Here are the steps to bonding Polkadot at RockX.
Step 1: Go to your account page on the Polkadot network. Then, find and click the “Earn Rewards” button on the right upper corner of the page.
Step 2: Read the information provided to understand the rule of bonding assets. After reading the pop-up details, click continue.
Step 3: Find the Bond assets window and select the destination of your rewards after the staking period. You can accept the incentives on your available balance or on your bonded balance. As much as possible, you have to pick the suitable option since you can’t change it afterwards when you’re using Ledger Live.
Step 4: Once you have picked the destination of your rewards, you will need to enter the amount of DOT you want to bond. Remember that you should bond a minimum of 120 DOT or more to be eligible for the rewards.
Step 5: Ensure that you have enough available balance to use for paying additional fees and charges for other operations.
Step 6: On your Ledger device, confirm and verify your DOT bonding.
Step 7: Upon confirmation, you can easily nominate validators by clicking the “Nominate” button below the confirmation window. Or you can also visit the “Manage Assets” section on your Polkadot account page to nominate more validators.
How to Receive your Polkadot Rewards
After nominating validators, you have to wait for your validator to claim rewards for you since you can’t claim rewards through Ledger Live. Usually, validators claim the rewards within 84 days, so you have to patiently wait. On the “Latest Operations” of your account page, you can find the rewards you have received.
Should You Consider Cold Staking?
Cold staking is a safe way to earn with your cryptocurrencies. If you want to avoid scams online and protect your digital assets, you can use a cold wallet to keep them. Aside from being storage for your hodl stack, you can also use your cold wallets to stake. The process is rather similar to online staking and it is much safer.