Key Takeaways
- You can earn rewards for helping to secure the Avalanche network by staking your AVAX tokens.
- Being a Validator requires running a node with at least 2,000 AVAX tokens. This offers more rewards but requires technical expertise and comes with the responsibility of keeping the node online.
- Being a Delegator is a more accessible option, with only a minimum of 25 AVAX tokens. You delegate your tokens to a validator who does the work, and you share the rewards.
Are you aware that Avalanche (AVAX) presents a unique opportunity for crypto enthusiasts to earn passive income?
In this article, we will discuss Avalanche and ways to make passive income by staking the AVAX token.
A Few Reminders
Let’s start with the basics: “Not your keys, not your crypto.”
There is a massive difference between custodial and non-custodial staking. Before we run off to earn our free AVAX, let us break this down so we are all on the same page.
Custodial staking means that you are handing over your crypto to someone else to stake it for you. This could be okay if you trust the entity to whom you are handing over your hard-earned crypto. However, the whole point of crypto is not to rely on or trust third parties. If the entity you are trusting goes out of business, gets hacked, or the owners decide to rug pull, then you could be left with nothing. So remember, not your keys, not your crypto.
However, access to these staking services varies depending on your jurisdiction, so make sure you look before you leap into this.
It is worth noting that US-based crypto exchange Kraken was forced to settle with the US Securities and Exchange Commission (SEC) and pay a $30 million fine in 2023. The fine included a requirement to shut down its staking-as-a-service (SaaS) program. If you are in the US, the SEC is working hard to ensure that non-custodial staking is your only option to earn staking rewards, so you should start learning how it is done.
Estimated Rewards Rate For AVAX
The current estimated reward rate for staking AVAX is 7.9%. That means, on average, Avalanche stakeholders earn about 7.9% if they stake their tokens for one year.
AVAX Staking Requirements
To participate in the network consensus, a validator must hold at least 2,000 AVAX, while to become a delegator, one only needs to hold 25 AVAX tokens.
The minimum staking period is two weeks, and the maximum period is one year for both validators and delegators.
| Delegator | Validator | |
| Responsibilities | Passively stakes AVAX to a Validator. | Actively runs a node, validates transactions, and secures the network. |
| Minimum Staking Requirement | 25 AVAX | 2,000 AVAX |
| Rewards Distribution | Receives rewards from the validator they delegate to, minus a small fee. | Receives rewards directly for their validation efforts. |
Staking Options
As with most proof-of-stake (PoS) networks, you can stake your AVAX from various wallets.
But later in the tutorial, we will try a browser extension wallet called Core. The platform just released its new public beta, which is continuously changing and improving the user experience for AVAX staking.
AVAX’s Main Chains
Let’s understand the chains or subnets on the Avalanche network, which will be helpful later in the tutorial. Avalanche has three leading chains that connect all of their subnets:
P-Chain – Manages validators and custom subnets.
X-Chain – The default blockchain for creating and exchanging assets.
C-Chain – Facilitates smart contracts and decentralized applications.
AVAX Staking On Core Tutorial
Install The Core extension On Your Web Browser.
Create A Wallet
Deposit at least 25 AVAX if you plan to delegate or 2,000 AVAX if you plan to become a validator.
Once you connect your Core extension wallet to the Core web, navigate to “Stake” and then to the “Delegate” panel.
At this point, you will see a prompt to “Learn More,” which links to helpful additional information provided by the Avalanche team.
When ready, click on “Get Started” to proceed with delegating.
This is the point in the process when you really need to understand subnets and the different chains in the Avalanche ecosystem. Your AVAX holdings must be present on the P-Chain for delegation.
Based on the total AVAX available on the P-Chain in your wallet, you can specify how much AVAX to delegate and click “Next.”
The platform then gives users a choice of staking duration. The user interface even includes a yield curve to show estimated staking rewards for each duration.
But remember that you have to stake a minimum of 25 AVAX for at least 14 days to become a delegator.
Select The Node You Want To Delegate
Users will then select the node they want to delegate their AVAX to. Validators charge fees to those delegating tokens, and those fees are represented as percentages and are listed in the menu of possible nodes.
When you have chosen a node, click “Select” and then “Next”.
Input A Wallet Address For Any Staking Rewards To Be Delivered To
Input a wallet address to which any staking rewards can be delivered. Users can decide between their connected P-Chain wallet address or a custom address.
The platform then flashes a summary of your delegating process and your selections. Click “Submit Delegation.”
Confirm The Transaction In The Core Browser Extension
Confirm the transaction using the core browser extension. Once completed, users will see that their delegation was successful. They will be able to view the transaction information by checking the Avalanche Subnet Explorer or returning to Core.
Final Thoughts
And that’s it! You’re all set up to earn free AVAX on the Core platform. With the current estimated rewards rate of 7.9%, AVAX staking offers a promising avenue for passive income!
