Ledger Validator Node has Arrived!
|— Staking is one of crypto’s most interesting options, giving you the chance to make passive income on your existing crypto|
— Your staking experience is defined by which wallet you use, and which validator you choose – trust in those choices is essential.
— Ledger validator node means you can stake with complete peace of mind, from the security of your own wallet, from an interface you already know, with a trusted validator.
— Whether you’re HODLing or trading, passive income is never a bad idea – here’s how the Ledger validator can help you grow your crypto.
Staking – one of crypto’s greatest offerings, and a chance to grow your crypto for very little effort. You can now stake through Ledger’s own node! Let’s take a deep dive into what we’ve added to staking experience, and how you can use it yourself.
One of the most appealing features of DeFi is the chance to make passive income. From liquidity pools to lending protocols – users have thousands of options at their fingertips for growing their existing crypto with just a little knowledge and some patience.
If you like the sound of this passive income, keep reading, because it just got even better: the Ledger staking validator has arrived! Let’s take a look at the newest addition to Ledger Live, and how it helps you grow your crypto from the security of your own wallet, and without breaking a sweat.
Let’s get into it!
First, a Recap: How Does Staking Work?
If you’re new to the space, or maybe it’s your first time staking, let’s start with a quick summary of its main points.
What does Proof-of-Stake mean?
Networks that allow staking operate using a “proof-of-stake” consensus mechanism. What does that mean? It means their network is kept turning by validators who process new transactions, make sure they’re accurate and add them to the blockchain.
It’s called “proof-of-stake” because in order to become a validator node, each one needs to “stake” a significant amount of the network’s native coins, locking them up in the network. This incentivizes the validators to keep the network secure and process transaction blocks properly. In exchange for doing this, they get a reward from the network.
Can anyone be a validator node?
As we mentioned, validator nodes must have staked a large sum into whichever blockchain they are working on – and this can be prohibitive. On the Ethereum network, for example, the stalking threshold is the equivalent of 111,000 USD at the time of writing, which means that for most of us, becoming a validator node – and earning that sweet, sweet passive income from our inactive crypto – simply isn’t an option.
This is where staking services come in. In basic terms, staking services are validator nodes that crowd-source the staking threshold from regular users like you and me. For the node, it allows them to become a blockchain validator and claim rewards from the network; meanwhile for the stakers contributing to the threshold, it’s a chance to make passive income on their crypto, even if they don’t want the hassle and expense of becoming a node.
Risks of Staking
This all sounds pretty good right? It is! But as with any opportunity, staking entails some risk, and it’s essential to understand this in order to navigate the space safely.
When you stake your coins, you agree to that amount of crypto being bonded in a protocol in exchange for rewards – so understanding the variables of that arrangement is key. The two main factors determine the risks you face when you’re staking are the wallet you’re using, and the validator node you’re staking with. Let’s take a look at the finer details of each one.
Your staking wallet
You can stake your coins in a couple of different ways, be that through a crypto exchange, or through a platform using your own private wallet.
- Crypto Exchange
Staking through a crypto exchange might well mean the simplest user experience, but it comes at a price: the exchange itself manages the private key, meaning your crypto isn’t really yours. If the exchange platform gets hacked, censored or goes bankrupt while your coins are staked, consider them gone.
The #1 reason why people move their crypto from exchange wallets is to increase their security and have true ownership of their assets. So using an exchange – and its associated wallet – to stake your coins means assuming the risk of letting someone else manage your crypto while you earn.
Further to this, using an exchange wallet means allowing the exchange itself to choose the validator node. Shouldn’t that be your choice? We’ll come back to that below.
- Soft Wallet
There are other options too, of course – you might also choose to stake your coins using a hot wallet (software wallet). The advantage of this is that you retain complete control over your private keys, and therefore complete ownership of your assets, even as they’re staked.
But, as with any software wallet, security is a key issue. With your wallet always connected to the internet, it’s vulnerable to hacks and malware and therefore can’t guarantee the security of your private keys. The only way of doing this is by using an offline wallet. We’ll come back to that.
The other key question when you’re staking is which validator node you use.
Ultimately, when you stake your coins, you’re nominating a validator node and relying on it to behave the way it should. But what if it doesn’t?
If the node you staked exhibits bad behaviour – such as being offline for long periods of time – the network automatically “slashes” some of its staked coins, incentivizing it to perform properly again. And this results in your coins being slashed too.
So finding a validator you trust is a big factor in your staking experience, something that can be difficult in the fast-expanding DeFi ecosystem.
So there you have it – you now have a firm grasp of the ins and outs of staking, and how to be a discerning user yourself. So let’s get to the main event: what is Ledger validator node, and what does it bring to you?
Why Stake With Ledger Validator Node?
Great question. As you know, your choice of wallet and validator node are what define your staking experience – and with Ledger, you can tick both these boxes seamlessly.
Using the staking feature within the Ledger Live interface means you can stake your coins from the security of your hardware wallet: that means “goodbye” to vulnerable online keys. Instead, you retain sole control of your coins – even when they’re staked – and your all-important private keys stay off-line.
A Safe Validator, Chosen By You
As you know, although staking is a great way to make passive income, it also entails a degree of risk – you’re trusting the validator node you’re using to remain active in order to get your rewards. With confidence being such an important part of this interaction, choosing a node you already know node is a no-brainer.
With Ledger validator node, you can simply stake your coins with peace of mind, and switch off until it’s time to claim your rewards.
Ease of Use
And best of all, the Ledger validator node can be found and accessed through Ledger Live’s staking list, empowering you to make passive income on your coins from an ecosystem you already know.
In short, it’s more seamless than ever to grow your crypto – and retain complete peace of mind as you do it.
Stake With a Node You Trust
The whole point of passive income is that you can simply sit back and know that your crypto is growing, without any further input from you. And by using the trusted Ledger validator, you can get the most out of your crypto, even as you hodl.
So go forth and explore the crypto ecosystem, safe in the knowledge that your coins are still working their hardest for you, without any nagging doubts. Thanks, Ledger validator!
Knowledge is power.
Whether you’re HODLing or trading, making your spare crypto work for you is never a bad idea. Here, we explain exactly how to make passive income via DeFi platforms. Thanks, School of Block!