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.

MATIC is the native token of Polygon.

Polygon is a decentralized Layer-2 scaling platform. 

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.

What’s so Great About $MATIC? 

What’s so great about Polygon (MATIC)?

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

1

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.

2

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.

3

Liquid Staking
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.

4

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.

1

Staking MATIC on a Centralized Exchange 

Use: Kraken or Binance

Step 1—

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.

Step 2—

Buy MATIC

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.

Step 3—

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.

Step 4—

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.

Step 5—

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.

Step 6—

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.

Final word

Kraken is almost always our top pick if you’re willing to go this custodial route.

Earn up to 14% in Yearly Rewards When You Stake Your MATIC

Comparing Top Crypto Exchanges

1. Binance 
   • 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
2. KuCoin
   • 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
3. Crypto.com
   • 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.

2a

Staking MATIC by Delegating it to a Public Validator

Use: MetaMask

3

Liquid Staking

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

1. 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.
2. 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.
3. 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:

1. 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.
2. 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.
3. 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.
4. 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.
5. 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.

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.

Step 1:
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.

Step 2:
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).

Step 3:
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.

Step 4:
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.

Step 5:
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.

Step 6:
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.