This guide will give you with a solid understanding of how and where to stake $MATIC and what you can expect.
It’s an overview followed by four step-by-step guides outlining four different ways you can set this up and start earning. By the end of this guide, you’ll know how and where to stake your $MATIC. You don’t need to be convinced of the why but we’ll briefly touch on that too.
Staking MATIC offers rewards up to 20%
$MATIC can only be staked as an ERC20 token (not directly on Polygon)
Reward amounts depend on the platform and lock-up duration
Four methods to stake MATIC:
- Staking on a Crypto Exchange
- Delegating to a Validator
- Liquid Staking
- Running Your Own Node
Assess risks and rewards before choosing a method
Who doesn’t want more MATIC?
Many of us think that the future looks bright for this Layer-2 scaling solution. We all have our crystal balls working overtime.
Here’s what you can do to increase your holdings: you can go out buy more MATIC (with fiat), you can exchange some of your other tokens and watch to see how things unfold, or you can stake and earn passive income.
We’re here for the staking; it’s an easy way to earn more crypto passively.
If you’re not planning to cash out or use your crypto for trading, you may as well put it use.
Staking-enabled cryptocurrencies, or Proof of Stake (PoS) coins, use a consensus method to secure and confirm transactions on a blockchain.
Unlike Bitcoin and some other cryptos that use Proof of Work (PoW) consensus, which relies on complex mathematical computations and energy, you can’t stake on any PoW chains.
By staking your MATIC tokens, you can earn between 14-20% interest, depending on the platform. For example, Binance offers up to 14% interest for a 90-day lock-up period. Keep in mind that different validators may charge varying rates for staking MATIC tokens.
MATIC is the native token of Polygon.
Previously known as Matic Network, Polygon was rebranded in early 2021 to expand its vision and capabilities. The project’s native token is MATIC, which is used for various purposes within the Polygon ecosystem, such as securing the network, paying for transaction fees, and participating in governance.
The MATIC token has been distributed through various methods since its inception, including an Initial Coin Offering (ICO), airdrops, and exchange listings. The token distribution helps ensure a widespread and decentralized network of validators and participants, making the Polygon ecosystem more secure and robust.
In summary, Polygon is an innovative Layer 2 solution that enhances Ethereum’s performance by providing a scalable and interconnected ecosystem. The project’s native token, MATIC, can be staked to help secure the network and earn passive income for its holders. The history of staking and token distribution has played a vital role in the growth and security of the Polygon ecosystem.
Earning Rewards ($MATIC)
MATIC staking incentives will be paid out using 12% of Polygon’s 10 billion token supply overall. These 1.2 billion tokens denote the staking reward for the first five years inclusively.
This is to make sure the network is sufficiently seeded until transaction fees take off. Staking incentives were primarily intended to kick-start the network, but in the long run, the protocol should be able to support itself through transaction fees.
Validator Rewards are calculated as Staking Rewards plus Polygon Chain Transaction Costs. The maximum number of tokens were planned to be distributed as staking rewards in the first year. The distribution mechanism ensures a progressive break from staking incentives dominating validator rewards.
While tokens to be distributed as staking rewards are fixed for the first five years of the network’s life, each checkpoint receives a portion of the reward and stakeholders will all receive the same fixed amount. If bonding rates are lower, the reward rate will be higher; and vice versa. With the exception of the proposer, who receives a bonus, the staking incentive is dispersed proportionally to each staker, including the proposer and signers.
Four Ways to Stake MATIC
Use a Centralized Crypto Exchange
This involves storing your tokens on a centralized crypto exchange (e.g. Kraken, Binance, KuCoin, Crypto.com) and letting the exchange conduct the procedure on your behalf.
Delegate Tokens to a Public Validator
You may delegate your tokens to a public validator to carry out the staking for you.
At the end of the staking time, the validator stakes on your behalf and pays you your portion of the benefits.
This process enables you to stake money while maintaining access to it in order to gain rewards. It eliminates lockup restrictions on staked Polygon tokens.
Run Your Own Validator Node
You can also hire a cloud server to serve as a validator for the Polygon network if you have the means.
Keep in mind that if your server isn’t constantly accessible to validate transactions, your benefits will be reduced and, after several infractions, you risk being kicked off the network.
Staking MATIC on a Centralized Exchange
Create an account
Obviously, you’ll need to create an account on the crypto exchange of your choice, if you haven’t already done this. Follow the account verification process to ensure that you can use all of the features of the exchange.
Next, you’ll need to have some some MATIC. Buy tokens using fiat currency or other cryptocurrencies. This is typically be done through the exchange’s trading platform.
Transfer MATIC to your exchange wallet
Once you have your MATIC tokens, you’ll need to transfer them to your exchange wallet. This can be done by navigating to the “Deposit” or “Send” section of the exchange and selecting MATIC as the deposit.
Follow the instructions to transfer your tokens from your private (self-custody) wallet to your exchange wallet.
Use the staking platform
Once your MATIC tokens are in your exchange wallet, navigate to the staking platform on the exchange.
Look for a “Staking” or “Earn” tab.
Choose your staking amount
Select MATIC as the cryptocurrency you want to stake, and choose the amount of MATIC you want to stake. Be sure to read the terms and conditions of the staking program carefully before staking your tokens.
Understand how long they’ll be locked up and how much you can expect to earn for that duration.
Confirm the staking transaction
Finally, confirm the staking transaction and wait for your tokens to be staked. You should start earning staking rewards immediately, which will typically be deposited to your exchange wallet at regular intervals.
Keep in mind that the specific steps may vary slightly depending on the exchange you use, so be sure to follow the instructions provided by your chosen exchange carefully.
That’s about it.
This is the easy and most convenient way… but it’s not the one we’d recommend to our close friends. It comes with the obvious risk or leaving your MATIC on a central exchange… and we all (or should know) know that can be a disaster.
Kraken is almost always our top pick if you’re willing to go this custodial route.
Comparing Top Crypto Exchanges
- Flexible lock-up periods (30, 60, and 90 days)
- Estimated annual yield depends on lock-up period (5.2%, 6.47%, and 19.6% respectively)
- Minimum and maximum staking limits are from 0.01 to 1,500,000 MATIC
- Lock-up periods vary from 7-30 days
- Expected annual returns vary from 7.5% for 7 days to 9% for 14 days to 12% for 30 days
- Minimum and maximum staking limits are from 10 to 100,000 MATIC for a single user
- Lock-up period is flexible (30-90 days)
- Minimum staking limit is 250 MATIC tokens
- Reward rates are flexible, ranging from 0.35% to 5.5% for USD below $4,000 depending on the staking period.
Staking MATIC by Delegating it to a Public Validator
Here’s a simple step-by-step guide to staking MATIC via delegation to a public validator using the MetaMask wallet:
Access the Polygon Staking Platform Visit the Polygon (MATIC) staking platform at https://wallet.polygon.technology/staking.
Connect your MetaMask Wallet Click on the “Connect Wallet” button in the top right corner of the page. A pop-up will appear, prompting you to connect your MetaMask wallet. Choose MetaMask and follow the on-screen instructions to connect your wallet.
Choose a Validator In the “Validators” section, you’ll see a list of public validators available for delegation. Review their commission rates, uptime, and total stake to make an informed decision. Click on the validator you’d like to delegate your MATIC tokens to.
Delegate MATIC Tokens Once you’ve chosen a validator, click on the “Delegate” button next to their information. A new window will appear, where you’ll need to input the amount of MATIC tokens you wish to delegate.
Confirm the Delegation After entering the amount of MATIC tokens you want to stake, click the “Delegate” button in the window. This action will trigger a MetaMask transaction request. Review the transaction details and confirm the delegation by clicking “Confirm” in your MetaMask wallet.
Monitor Your Delegation Your MATIC tokens are now staked via delegation to the chosen validator. You can monitor your delegated tokens and rewards by visiting the “My Account” section on the Polygon staking platform.
Remember that staking may involve a lock-up period during which you cannot withdraw or trade your tokens. The minimum is likely only a 3 or 4 days.
Pay attention to any updates or changes in the Polygon ecosystem to stay informed about your staking process.
How to Stake MATIC (Polygon) on your Exodus Web3 Wallet
This is a good option for people who use Exodus as their main wallet and hold MATIC there already.
If you have your MATIC on Polygon instead of Ethereum, you need to convert them to ERC-20 (Ethereum) tokens.
(This will cost you transaction and exchange fees.)
Let’s break down the process for staking MATIC using the Exodus wallet with Web3 Connect:
- Visit the Polygon staking platform (https://wallet.polygon.technology/staking) in a Web3-compatible browser.
- Click “Connect Wallet” in the top right corner and select “WalletConnect” from the options.
- Open your Exodus wallet, navigate to the WalletConnect feature, and scan the QR code displayed on the Polygon staking platform.
You can either use the Exodus wallet browser extension (in Brave) like I did, or use the Exodus mobile wallet.
- Choose a validator from the list, considering factors like commission rates, uptime, and total stake.
- Delegate: Click the “Delegate” button next to your chosen validator and enter the amount of MATIC tokens you wish to stake.
- Confirm the delegation in your Exodus wallet when prompted with a transaction request.
By following these steps, you’ll be able to stake your MATIC tokens on the Polygon network using the Exodus wallet with Web3 Connect.
Remember to monitor your staking progress and rewards on the platform.
With liquid staking of MATIC, your tokens maintain their liquidity even after being staked. This process tokenizes your stake, which means that for each MATIC token staked, you receive a staked-MATIC token (stMATIC). You can exchange your stMATIC tokens back for the original token when you decide to opt out of the staking process. There pegged to each other so that the value remains the same over time.
Lido, ClayStack, Ankr and Stader are the leading platforms offering liquid staking on both Polygon and Ethereum.
Lido is the biggest liquid staking protocol and offers a 3-4 day waiting time for withdrawals, 10% fees from the user’s staking rewards, and an annual percentage yield of 8.676%.
Advantages of Liquid Staking MATIC
- Increased liquidity: Liquid staking allows you to maintain the liquidity of your tokens, as you can still use them for other purposes while they are being staked. This can be important if you need to access your funds quickly for trading or other reasons.
- Reduced risk: By staking your tokens, you are contributing to the security of the network, which helps to reduce the risk of network attacks or other security breaches. Additionally, liquid staking can help to mitigate the risk of price volatility, as you can quickly sell or trade your tokens if the price starts to drop.
- Flexibility: Liquid staking provides users with more flexibility and control over their staked tokens. For example, you can choose to unstake your tokens at any time, without having to wait for a specific staking period to end. This can be particularly useful if you need to access your funds for unexpected expenses or opportunities.
Disadvantages of Liquid Staking MATIC
Yes, there are some risks and disadvantages to liquid staking MATIC (or any other cryptocurrency), including:
- Impermanent loss: When you stake your tokens, you are essentially locking them up in a smart contract. If the price of Matic were to increase significantly while your tokens are staked, you may experience impermanent loss if you decide to unstake your tokens. This occurs because the value of your staked tokens will have increased relative to the value of the rewards you earned while staking.
- Technical risks: As with any smart contract-based system, there is always a risk of technical issues or vulnerabilities that could be exploited by attackers. These risks can be mitigated by using trusted and audited platforms for liquid staking, but it’s important to be aware of the potential risks.
- Centralization risk: Liquid staking often requires delegating your staking power to a third-party platform or validator. This can introduce centralization risk if a small number of entities control a significant portion of the staked tokens, which could potentially compromise the security of the network.
- Lower staking rewards: While liquid staking offers increased flexibility and liquidity, it may come at the cost of slightly lower staking rewards compared to traditional staking methods. This is because liquid staking platforms typically charge a fee for their services, which can reduce the overall returns on your staked tokens.
- Unforeseen changes: There is always the possibility that the rules or incentives of the staking system could change unexpectedly, which could impact the value of your staked tokens and rewards. It’s important to stay informed and be prepared for any potential changes or risks associated with liquid staking.
Liquid staking can be a powerful tool for maximizing the benefits of staking while still maintaining control and flexibility over your cryptocurrency assets.
Running Your Own Validator Node
This option requires more technical knowledge and resources compared to delegating tokens.
Running a node is possible on either your personal server or a cloud server rented from a major provider like Amazon Web Services (AWS) or Microsoft Azure. Opting for a major cloud provider ensures more dependability and the highest uptime.
There are hardware requirements to keep in mind too. A Polygon node must have at least 32 GB of RAM, an 8-core CPU, and 2 TB of storage. Two nodes, a sentry and a validator, must be run on separate computers.
Also, you cannot run a validator node on a home computer. The best option is a cloud service that enables you to rent space on a distant machine. Blockdaemon and OVH are other examples of cloud service providers you can opt for.
Prepare the Infrastructure
Set up a reliable server with sufficient computing resources (CPU, RAM, and storage) and a stable, high-speed internet connection. Ensure your system runs a compatible operating system, such as Ubuntu.
Install Necessary Software
Install the required software for running a Polygon validator node, including Geth (Go Ethereum) and the Polygon SDK. You can find the installation instructions in the Polygon documentation (https://docs.polygon.technology).
Sync the Polygon Blockchain
Run your Geth client and sync the Polygon blockchain to your server. This process may take several hours, as the client needs to download the entire blockchain history.
Set up the Validator Node
Configure your validator node by following the instructions in the Polygon documentation. You’ll need to create a new validator account, fund it with MATIC tokens, and set up the staking smart contract.
Start the Validator Node
Once your validator node is configured, start the node and ensure it’s actively participating in the network. Your node will propose and validate blocks, and you’ll begin earning staking rewards.
Monitor and Maintain the Node
Regularly monitor your validator node’s performance and maintain its security. Keep your software up-to-date and troubleshoot any issues that may arise.
Keep in mind that each Polygon validator is required to stake a minimum of one MATIC token. You must also ensure that your servers are operational at all times. Since Polygon can currently support only 100 validators at the max, there is cutting-edge competition to becoming one. The more closely you follow its guidelines, the better your chances are of becoming a validator.
Running your own validator node involves a more significant commitment in terms of time, technical knowledge, and resources. It’s essential to be prepared for these responsibilities and stay informed about the Polygon network’s latest developments.
History and Founders of Polygon Network
The co-founders of Polygon, Jaynti Kanani, Sandeep Nailwal, and Anurag Arjun, have diverse backgrounds in blockchain and technology. Jaynti Kanani, the CEO, was a contributor to the Web3, Plasma, and WalletConnect projects before starting Polygon. Sandeep Nailwal, the COO, has experience in blockchain scaling and previously founded a blockchain-based supply chain management company called ScopeWeaver. Anurag Arjun, the CPO, has worked in e-commerce, product management, and machine learning prior to joining Polygon.
In 2019, a total of 12% of the MATIC token supply was set aside as part of the MATIC Network token distribution for staking rewards. This was set to be distributed over a five-year period.
Whatever you decide do, it’s wise to retain full control of your crypto while staking it.
Staking involves a lock-up period when but it’s usually not longer than a few days. Look into it for you preferred wallet or exchange.
Make sure your MATIC is ERC20 (not Polygon).
Staking on Lido might be ideal for people with confidence in their ability to use MetaMask or Exodus.
The benefit here is it offers you both liquidity and allows for self-custody.
Staking with your crypto Exchange is extremely convenient. It’s almost too easy —just make sure that you’re completely willing to trust them (and probably earn a bit less).
Kraken is our top pick.
Staking on Polygon:
MATIC Staking | Stake MATIC tokens for network rewards
Earn Polygon MATIC Staking Rewards:
Matic Network Staking
How to Stake MATIC (Polygon):
How to Stake MATIC (Polygon)
How to Stake MATIC in Polygon Wallet via Metamask:
How to stake MATIC in Polygon Wallet via MetaMask | by Everstake