EXPLAINER GUIDE: How to Stake $LUNA and Earn Rewards on the Terra Ecosystem in 5 Easy Steps

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Ter­ra net­work was one of the most suc­cess­ful cryp­to projects in 2021 with its pri­ma­ry token $LUNA grow­ing more than 2000% dur­ing that year and cur­rent­ly cap­i­tal­izes more than $20.5 bil­lion of the market. 

$LUNA, which is also Ter­ra ecosystem’s gov­er­nance token, is key to keep­ing Terra’s sta­ble­coins such as $UST steady. Token hold­ers can stake the coin so that they’re reward­ed for absorb­ing the volatil­i­ty. They receive a per­cent­age of trans­ac­tion fees from the Ter­ra pay­ment network.

$LUNA hold­ers also gain vot­ing rights. Ter­ra was one of the first cryp­to ecosys­tems to intro­duce algo­rith­mic sta­ble­coins that, as men­tioned, are reg­u­lat­ed by a token like $LUNA. Based on $UST’s rise to becom­ing the third lead­ing sta­ble­coin by mar­ket cap, the project has proven that this con­cept for a ful­ly decen­tral­ized sta­ble­coin works.

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SEE ALSOSTAKING EXPLAINED – One Clever Way to Earn Pas­sive Income from Your Cryp­to Holdings

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Here are the steps you can fol­low if you would like to con­tribute and earn $LUNA:

Create Account on Terra Station Wallet

Go onto Terra’s web­site, terra.money, and down­load the Ter­ra sta­tion, the ded­i­cat­ed stak­ing wal­let for inter­act­ing with the Ter­ra ecosystem. 

Here you get a dash­board that will show your cur­rent hold­ings of $LUNA and oth­er tokens on the wallet. 

If you do not have any tokens you are hold­ing, send $LUNA to the new­ly cre­at­ed $LUNA address in your Ter­ra Sta­tion wal­let. The wal­let is the same as oth­er address­es, so all you need is to copy the address. 

You can buy $LUNA on exchanges like Binance and Coin­base and then send to your Ter­ra sta­tion wal­let so you have some­thing you can stake. 

Select a Validator 

Like most stak­ing blockchains, Ter­ra employs a proof of stake blockchain where val­ida­tors con­firm trans­ac­tions and oth­er activ­i­ties to the block. 

Val­ida­tors run the nodes that con­firm trans­ac­tions on the Ter­ra ecosys­tem where they del­e­gat­ed their own $LUNA. In addi­tion, val­ida­tors’ abil­i­ty to earn rewards is cor­re­lat­ed to the amount of $LUNA that is delegated.

Ter­ra has many val­ida­tors with exam­ples such as Staked and Kysen protocol. 

Val­ida­tors are list­ed on the Ter­ra sta­tion dashboard

Click on Delegate 

Once you select a val­ida­tor, it’s time to delegate. 

An exam­ple of a delegation 

Enter Amount

Confirm

That’s it!,

You will get a con­fir­ma­tion mes­sage declar­ing the amount of $LUNA you have staked and to which validator. 

If you choose to stop stak­ing, there is a 21-day unstak­ing peri­od to receive your $LUNA tokens. Dur­ing this peri­od, the unbond­ing $LUNA can’t be trad­ed and you will no longer receive any stak­ing rewards.

Del­e­ga­tors share the ben­e­fits and rewards of stak­ing with their val­ida­tor. If a val­ida­tor is suc­cess­ful, its del­e­ga­tors will con­sis­tent­ly share in the rewards struc­ture. If a val­ida­tor is slashed, the delegator’s stake will also be slashed.

This is why del­e­ga­tors should per­form due-dili­gence on val­ida­tors before del­e­gat­ing. Del­e­ga­tors can also diver­si­fy by spread­ing their stake over mul­ti­ple validators.

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RECOMMENDED READING: How to Iden­ti­fy and Par­tic­i­pate in Airdrops

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