Ledger Nano X (and staking crypto)

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I had been thinking about ordering one of these for some time. With Coinbase in the crosshairs of the Eye of Sauron, I finally got off my duff and ordered one. It arrived this morning and I spent some time getting it set up and transfering some crypto I owned on Coinbase over to it. It was pretty easy.


If you own (or plan to own) a sizeable amount of crypto, I'd also recommend getting the CryptoTag Zeus to secure your seed phrase.
 
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I have now spent a good bit of time using the Ledger Nano X and figuring out how to stake various crypto with it (with some help from YouTube). I had to learn a lot about staking that was not important when I let exchanges do the staking for me. Staking works a bit differently with each different crypto coin.

Solana (SOL) - The Ledger Live software that works with the Nano allows you to stake Solana (SOL) directly. Solana staking is particularly nice because it automatically adds your staking rewards (received every 3 days or so) to your staked balance for compounding. No manual effort and no gas fees. It's set and forget easy. Stake rewards are estimated to be around 7% API.

Cosmos (ATOM) - The Ledger Live software that works with the Nano allows you to stake Cosmos (ATOM) directly. Cosmos is easy to stake and you receive rewards at least daily (maybe more than once a day - I'm not 100% sure but it seems like every time I look, there are more rewards in my account). The Cosmos staking rewards have to be claimed manually and it costs a tiny bit of ATOM (0.01 to be exact) in gas fees to do so (so you need to keep a small bit of ATOM in your wallet - don't stake your entire ATOM balance). You can claim the ATOM rewards either to your wallet or directly to your staked balance for compounding. It's very easy. Stake rewards are estimated to be around 7.5% API.

Avalanche (AVAX) - In order to stake Avalanche, I had to use the coin's native browser extension ( https://wallet.avax.network ) and connect it to the Ledger. Avalanche staking requires you to choose a staking pool that has a pre-determined lifespan (could be one day or 6 months or whatever). You choose the staking pool with the time frame that suits you and once committed, your crypto is locked in the staking pool until the end date. You will then have to manually re-stake (assuming you want to do that) in another staking pool. Stake rewards are estimated to be around 7-8% but it's highly dependent upon your choices when picking a staking pool and your diligence in re-staking as soon as your staked funds become available again when the current pool ends.

Polkadot (DOT) - In order to stake Polkadot, I had to use the coin's native browser extension ( https://polkadot.js.org/apps/ ) and connect it to the Ledger. Staking was a bit confusing at first as there are two ways to do it - creating your own nominating pool (requires at least 326 DOT) or joining an existing pool (requires at at least 1 DOT). I didn't have over 326 DOT to stake, so I joined an existing pool and it was pretty easy to do. DOT staking rewards get paid out once a day around 10am CST. The rewards sit in your account as an unclaimed reward until you manually claim the balance. You can choose to either have the reward sent to your wallet, or get added to your stake for compounding. Doing either action does cost a tiny bit of DOT from your wallet for a transaction/gas fee. That makes the decision of when to claim the rewards for compounding for maximum value a bit complicated. You also need to manually check in on the balance from time to time. Stake rewards are estimated to be around 12-15% API.

Cardano (ADA)- In order to stake Cardano, I used the Typhon Wallet browser extension ( https://typhonwallet.io/ ) and connect it to the Ledger. Staking with the Typhon wallet seems very easy to do. So easy that I'm not sure I have actually done it correctly. You just have to pick a validator/pool to stake your funds with. I chose one from Australia that reserves a portion of their rewards to save Koala habitats or something like that. I have not seen any staking rewards accruing in my account yet, but apparently, with Cardano, you don't earn staking rewards until your stake has been committed for several Epochs (10-15 days or so). Hopefully I see some after Epoch 404 ends in 4 days. Stake rewards are estimated to be around 4-5% API.

I investigated staking with some ERC20 coins (coins built on the Etherium network) including Chainlink (LINK), Uniswap (UNI), Shiba Inu (SHIB) and Loopring (LRC). Staking ERC20 coins requires you to use the MetaMask wallet browser extension ( https://metamask.io/ ) and connect it to the Ledger. Once you connect the Ledger, you need to "import tokens" or something like that - I don't remember exactly what I did, but it was easy and MetaMask found all my ERC20 coins in one go. Once Metmask can see your ERC20 coins, you can find each coin's browser extension that can then connect to MetaMask and allow you to stake your coins. The problem with staking ERC20 coins is that gas fees for transfering your coins to a staking pool are paid in Etherium (ETH). As I only had a tiny bit of these coins for dabbling, the gas fees were cost prohibitive when I checked (costing ~$5-7 to stake ~$25 worth of coin). The process is easy enough (except for Uniswap which is a beast unlike all the others and I still don't fully understand), but you need to have a large balance of coins to make it cost effective with Etherium's current high gas fees.
 
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So.... basically you just became a Crypto banker... What an outlaw. Good info though.

I really DO NOT understand why Crypto has staking???? That seems entirely unnecessary, risky, and defeats the purpose of crypto. I guess, if you view that as your savings you just want a return. But why does someone want to borrow crypto?
 
What is 'staking'?? a digital form of stacking?
 
So.... basically you just became a Crypto banker... What an outlaw. Good info though.

There are WEB3 apps that you can access through the Ledger that allow you to actually be a Crypto banker - lending your crypto at terms which you specify, but I haven't investigated them yet.

Uniswap also is a strange platform that lets you "stake" other (non-Uniswap) tokens with a strange formula that lets you earn arbitrage rewards, but my head started hurting when I was trying to figure out how it worked.

Staking is more like putting your cash in a savings or money market account. It earns rewards (interest) as long as it stays in the pool (account).
 
What is 'staking'?? a digital form of stacking?

It's actually a complicated question to answer correctly and completely. The easy to digest practical effect short answer is as I mentioned above - it's like putting your crypto into a savings or money market account where it earns some interest periodically (typically hours or days).

A more complete and correct answer requires some background info:
...
Proof-of-stake and proof-of-work are known as consensus mechanisms. Both, in different ways, help ensure users are honest with transactions, through incentivizing good actors and making it extremely difficult and expensive for bad actors. This reduces fraud such as double spending.

To understand what the difference is between proof-of-work vs. proof-of-stake, it helps to know a bit about mining.

In proof-of-work, verifying cryptocurrency transactions is done through mining. In proof of stake, validators are chosen based on a set of rules depending on the "stake" they have in the blockchain, meaning how much of that token they commit to locking up to have a chance to be chosen as a validator. In either case, the cryptocurrencies are designed to be decentralized and distributed, which means that transactions are visible to and verified by computers worldwide.

Computers on the network have to agree on what happened to verify transactions. If a computer tries to manipulate or commit fraudulent transactions on a network, it will be known through the public, immutable nature of the blockchain. Both consensus mechanisms have economic consequences that penalize malicious actors who try to disrupt the network.
...


Proof of Stake networks (almost every crypto coin now except for Bitcoin and a few others - https://definda.com/en/cg/31/proof-of-work-coins ) need validators to approve updates to the blockchain. "Updates" includes noting details of transactions - any time a coin is bought, sold or transferred. Different coins have slightly different implementations on how the validation process works and the incentives and penalties for doing a good or bad job, but, generally, staking pools are featured in the risk/reward calculus for validators to behave.

By staking coins, folks are dedicating their stake to the risk/reward pools to ensure economic incentives keep validators honest and thus secure the networks. Staking rewards are paid to staking pools as compensation for the use of the stake in securing the network.
 
...
Cardano (ADA)- ... I have not seen any staking rewards accruing in my account yet, but apparently, with Cardano, you don't earn staking rewards until your stake has been committed for several Epochs (10-15 days or so). Hopefully I see some after Epoch 404 ends in 4 days. Stake rewards are estimated to be around 4-5% API.
...

Just received rewards for Epoch 403. Looks like I did do everything correctly. You just have to wait a bit before you start receiving rewards. While the initial waiting period sucks compared to the staking process for other coins, the Cardano staking does automatically (no manual actions required) add the staking reward to your staked balance (for compounding) without costing any fees. So it's like Solana in that it's a set and forget system.
 
Just received rewards for Epoch 403. Looks like I did do everything correctly. You just have to wait a bit before you start receiving rewards. While the initial waiting period sucks compared to the staking process for other coins, the Cardano staking does automatically (no manual actions required) add the staking reward to your staked balance (for compounding) without costing any fees. So it's like Solana in that it's a set and forget system.

When staking your coins from a cold or hardware wallet, do you have to leave that connected to the net? Or can you "stake" your coins and then disconnect the wallet?
 
When staking your coins from a cold or hardware wallet, do you have to leave that connected to the net? Or can you "stake" your coins and then disconnect the wallet?

Edit: (1) no. (2) yes.

You only need the Ledger Nano to be connected when you sell, send or (initially) stake from your wallet. The coins are actually stored on the crypto's blockchain. The Ledger Nano is actually protecting your password(s) to the wallet(s), not the coins themselves.

Once staked, you can monitor the performance of your staking rewards from the Ledger Live software or a coin's broswer extension (depending upon the coin) without having to connect the Ledger Nano. You do need to connect the Nano if you want to manually claim the rewards for coins that require manual claiming. Unless you are staking 6 figures or so, this is something you will most likely do once a week or biweekly or monthly.
 
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The Ledger software integrates with a number of Decentralized Apps (dApps) that do various things. I saw this morning that they have a communication dApp:
...

Messaging Apps​

Decentralized messaging applications let you communicate with others without the need for a central authority or server, ensuring privacy and security.
...

WalletChat​

WalletChat is an app that allows users to send messages to other crypto wallets. It is similar to Inbox by Dispatch, but it also allows users to send messages from their crypto wallet to other crypto wallets. WalletChat makes it simple to contact NFT owners to negotiate a trade. At the click of a button, you can reach an owner directly by their wallet address or ENS so there is no need for third-party messaging services making it fast, easy, and secure.
...


If anyone would like to experiment with this, please send me a PM. I'm curious to try it out.
 
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Edit: (1) no. (2) yes.

You only need the Ledger Nano to be connected when you sell, send or (initially) stake from your wallet. The coins are actually stored on the crypto's blockchain. The Ledger Nano is actually protecting your password(s) to the wallet(s), not the coins themselves.

Once staked, you can monitor the performance of your staking rewards from the Ledger Live software or a coin's broswer extension (depending upon the coin) without having to connect the Ledger Nano. You do need to connect the Nano if you want to manually claim the rewards for coins that require manual claiming. Unless you are staking 6 figures or so, this is something you will most likely do once a week or biweekly or monthly.

I guess that makes sense because all you have are your private keys that say I own XXX addressed coins. Kind of like a Deed the coins don't move around just the ownership "documents".
 
I can add some commentary about another coin for the list now.

Polygon (MATIC) - This one was a bit frustrating for me. You can own MATIC on either the Polygon chain or on the Etherium chain. I own some MATIC on the Polygon chain (super low gas fees to move around). Native staking for MATIC is only available on the Etherium chain though. There is a bridge process to convert MATIC from the Polygon chain to the Etherium chain, but it costs gas fees on the Etherium network (and presumably more gas fees to stake the Etherium chained MATIC), so it was cost prohibitive for my pitiful MATIC holdings. Then I discovered that it is possible to "liquid stake" Polygon chained MATIC with a dApp from STADER. Basically, Polygon chained MATIC is committed to STADER (placed in a smart contract) and STADER exchanges it for a new token named MATICX. They then stake the MATIC (through whatever voodoo they have set up). There is an exchange rate for the MATIC <=> MATICX tokens (close to 1:1, but slightly off and I'm not 100% sure what affects it). They reward you daily with more MATICX and you can "unstake" by exchanging your MATICX back for MATIC. Liquid staking is a bit different from native staking. You can actually commit your MATICX tokens in other DeFi applications to earn even more yield, but I'm still trying to figure out how that all works. For now, I just have a small liquid stake engaged to see how it works. If I'm understanding everything correctly, this form of staking does not auto-compound. You would need to unstake the MATICX to increase your MATIC holding before re-staking again.

Also, now that the Shanghai update is done, I was able to unstake my "ETH2" on Coinbase. I plan to move my ETH to the Ledger and then liquid stake it with LIDO. Coinbase says 17 days to complete the unstaking, so I'll follow up after a couple of weeks when I get through that process.
 
Today the term for the staking pool (validator) that I had chosen for Avalanche ended. I logged in to the AVAX web portal and it showed that my staking term was 100% complete, but it didn't show my AVAX as returned to my wallet. I was a bit disgruntled with the situation - after doing a bunch of fruitless research on the process - until I thought to click the "refresh" icon. Got my stake plus reward and was able to restake easily. Did some quick calcs and my first stake returned 0.3% reward for a ~2 week term (18 days). That's ~8% API without considering compounding. Not bad at all.
 
I was able to claim my ETH from Coinbase and transfer it to my Ledger Nano wallet around a week ago. Thus I have a little bit of experience to relate with staking it on LIDO:

Ethereum (ETH) - Moving Ethereum around right now - whether transferring it from wallet to another, or committing it to a staking pool, is a bit expensive. Gas fees can be outrageous depending upon how the busy the network is, so the time of day you do things could see gas fees anywhere from $5/transaction to $15/transaction. The Ethereum developers are working on upgrades to the blockchain system to improve transaction efficiencies and lower gas fees, but who knows when they might get implemented and take effect. It's currently expensive.

That said, I staked some Ethereum using the LIDO app which can be accessed directly from within the Ledger Live software using the Ledger Nano. It was very straightforward - no choosing pools/validators or anything like that. Just commit your ETH and receive stETH. This is a similar liquid staking mechanism to the Polygon staking I did with STADER, except this one actually rewards you with stETH daily instead of monkeying around an exchange rate. The nice thing about the staking with LIDO is that the rewards are automatically compounded without costing any ETH for manual transactions.

The one hitch, if you can call it that, with liquid staking via LIDO is that you cannot, as of this moment, unstake the stETH. There is a liquid buy/sell market for buying/selling/trading stETH for ETH and you can reclaim ETH via that route. LIDO is reportedly going to be rolling out a direct unstaking option sometime in May. I suppose they have some issues to work out to deal with folks who bought stETH via an exchange and then want to 'unstake' the stETH they bought. I don't know about all the technical details.

The staking rewards for this experiment accrue daily and the LIDO app does a good job of actually showing the transaction history of the rewards (something I don't see with any other staking system) and a handy APR calculation for each reward. So far, my reward APRs have ranged anywhere from 4.5% to 8%.

If I had big bucks to commit, I'd try native staking of ETH with Kiln, but that requires a minimum of 32 ETH whereas the liquid staking with LIDO has no minimum.

Stader MaticX (MATICX) - I did play around with committing the MATICX I had received when I staked my Polygon (MATIC) as mentioned earlier. The Stader staking app presents a carousel of 3rd party apps that you can use to earn yield on MATICX via various means with various earning (and risk) potential. I wanted to try something simple and safe (safe is a relative thing when venturing into these waters I think). I ended up committing the MATICX to a "liquidity pool" on MeshSwap that rewarded me constantly, in real time with two "shitcoins" MESH and SD. After about a week, I had received roughly $1.50 worth of these shitcoins using a ~$200 MATICX stake. I noticed that the amount of my stake fluctuated in the MeshSwap app as the price of Polygon went up and down and it didn't sit well with me, so I ended up unstaking my MATICX are removing it from the MeshSwap system. Unfortunately, transaction fees killed me on this one. I won't be doing that again. Also, I still own $1.50 worth of shitcoins that I can't convert into anything else because the amount I own is too small to meet minimum thresholds for trading. I would either have had to use a larger stake, or let my stake run for much longer to make this endeavor worth it. So for now, I'll just hang on to my MATICX and watch the magic exchange rate to MATIC on the Stader app.
 
I should note that I was wrong about the Stader MATIC staking in post #12. The Stader MATIC staking system does not reward you with additional MATICX. The longer you maintain your MATIC stake, the more the exchange rate from MATICX to MATIC increases. I do not fully understand the maths/mechanism behind it yet.
 
Saw this news today (news is a couple weeks old):
...
Things to know:

– We’re glad to announce an on-ramp integration with PayPal, allowing users to explore crypto in a convenient, simple and secure way via the Ledger Live companion app.

– PayPal joins Ledger Live’s ‘Buy’ section as a new payment method and ‘Buy’ provider. Currently, the PayPal integration is available for U.S. users (subject to applicable state law).

Whether a crypto expert or a newcomer to the world of digital currencies, the PayPal and Ledger Live integration will provide a secure and user-friendly platform for buying crypto. When using PayPal through Ledger Live, Ledger users in the US (subject to applicable state law) will be able to directly buy BTC, ETH, BCH and LTC using their linked PayPal account. Users who have purchased crypto with a PayPal account can buy crypto in Ledger Live with no extra verification. Purchases through PayPal will be automatically sent to your Ledger hardware wallet similar to other Ledger Live options.
...


I personally would not use PayPal in lieu of other available options, but there are a lot of people using PayPal so it is a good thing for the crypto space.

~~~

I still have my staking pools running as described above in previous posts. I still don't really understand how the MATICX works, but my stake is a small, so I've been letting it ride. After running my AVAX through a couple of 20 day staking commitments, I decided (a while back) to try a longer term and staked it for several months (out to mid October). I'm curious to see how that affects the staking return.
 
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Crypto staking has so far escaped specific regulation in Europe – but many in the industry wonder if it’s helpful to maintain a regulatory gray area.
...
The European Union’s Markets in Crypto Assets law (MiCA) makes the bloc the world’s first major jurisdiction with a more or less comprehensive crypto law, covering everything from stablecoin issuance to insider trading – but even MiCA leaves staking out.

That’s a gap that needs to be fixed, says the European Central Bank’s Christine Lagarde, who’s called for the service – in which crypto holders can post their assets to earn passive income – to be addressed in a MiCA sequel. That would likely take years, if it happens at all – and some are worried about what will happen in the meantime.
...

More:


They seem to be focused on staking services - where a 3rd party is handling the messy details - versus individuals staking directly as I have talked about in this thread.
 
... After running my AVAX through a couple of 20 day staking commitments, I decided (a while back) to try a longer term and staked it for several months (out to mid October). I'm curious to see how that affects the staking return.

I forgot to post an update on this. The October redemption ended up yielding a slightly higher return than the 20 day periods (with compounding). So I restaked with a much longer period (half a year) to see how that plays out.

Two downsides to staking over such long periods is:
  • Remembering to claim and restake when the staking period ends to maximize compounding. If you remember a few days late like I did, you miss that time accruing staking rewards
  • You miss opportunities for trading. When the market goes volatile with big swings up and down, you don't get to sell and rebuy your stake if you think you can time the market
 
...
I investigated staking with some ERC20 coins (coins built on the Etherium network) including Chainlink (LINK), ...

Yesterday:
Chainlink, the industry-standard decentralized computing platform, announced today that Chainlink Staking v0.2, the latest upgrade to the protocol’s native staking mechanism, is now open for Early Access. Eligible participants now have the opportunity to stake up to 15,000 LINK. Early Access lasts for four days, before Staking v0.2 enters General Access, where anyone can stake up to 15,000 LINK provided the pool hasn’t yet been filled. The web page for Chainlink Staking can be found at https://staking.chain.link.

The eligibility list for Early Access builds upon the list previously used in v0.1. More information about the Early Access eligibility criteria can be found in this recent blog. Community members and LINK token holders can check their v0.2 eligibility at staking.chain.link/eligibility.

v0.2 features an expanded pool size of 45,000,000 LINK in total, representing 8% of the current circulating supply, increasing the accessibility of Chainlink Staking to a more diverse audience of LINK token holders. Staking is a core initiative of Chainlink Economics 2.0, which is bringing a new layer of cryptoeconomic security to the Chainlink Network. Specifically, Chainlink Staking enables ecosystem participants, such as node operators and community members, to back the performance of oracle services with staked LINK and earn rewards for helping secure the network.

While v0.1 served as the initial Staking program, v0.2 has been rearchitected into a fully modular, extensible, and upgradable Staking platform. The v0.2 beta takes learnings from the v0.1 release and builds upon its foundation by focusing on the following goals:
  • Greater flexibility for Community and Node Operator Stakers via a new unbonding mechanism, while retaining a secure non-custodial design.
  • Improved security guarantees for oracle services secured by Chainlink Staking via the slashing of node operator stake.
  • Modular architecture to iteratively support future improvements and additions to Chainlink Staking, such as expansion to more services.
  • Dynamic rewards mechanism that can seamlessly support new external sources of rewards in the future, such as user fees.
After Early Access ends on December 11, 2023 at 12PM ET, the v0.2 staking pool will open to General Access, at which point anyone will have the chance to stake up to 15,000 LINK, provided that the v0.2 community pool has not yet been filled.


Today:
...
Chainlink, the biggest blockchain data-oracle project, saw a powerful uptake for its expanded crypto-staking program, pulling in over $632 million worth of its LINK tokens and filling up to the limit just six hours after the start of an early-access period ...

More:


mPi3ZL.gif
 
... So I restaked with a much longer period (half a year) to see how that plays out. ...

The Avalanche web portal ( https://wallet.avax.network/wallet/earn ) has been deprecated. They now have a browser extension called CORE that serves the same functions. Using CORE requires you to make a CORE account with a strong password. Something I'm already managing too many of. However, if you are using a Ledger like I am, that's not really an issue as you can just create a new CORE account every time you want to use it and connect the CORE account to the Ledger which then opens access to your AVAX.

My "longer period" staking ended the other day and I got roughly a 3-4% reward for a 6 month stake (roughly 7-8% APY). I have chosen a new stake pool and the system is estimating a 4-5% return for an 8 month term.

I wanted to make sure someone in my familly knew how to manage all the various crypto dabblings that I have going, so I started introducing one of my young adult sons to this stuff. I had him sit at the computer to manage the AVAX staking and he picked it up right away. Even the process for finding the best available staking pool candidate (low fee, high uptime, desired term, high stake from operator and high number of participants) was easy.
 
...
Polkadot (DOT) - ... The rewards sit in your account as an unclaimed reward until you manually claim the balance. ... You also need to manually check in on the balance from time to time. Stake rewards are estimated to be around 12-15% API.

I just learned that the Polkadot staking system (via the Polkadot dashboard) now allows you to choose to enable/disable permissionless claiming. If you enable it, you give permission to your staking pool to automatically pay you or compound your rewards (you choose which). The staking pool that I'm currently using auto-compounds rewards (if you give them permission) whenever the reward balance hits 2.5 DOT. I don't have it enabled (I prefer manual control) and I assume that the gas fee for any auto-pay/compound probably still comes out of your wallet. I have sent an inquiry to my stake pool operator for clarification on that.

BTW, lately, the staking has been running at around 15% APY. Very nice.
 
I got confirmation from the stake pool operator that gas fees are paid by the stake pool operator when they auto-compound staking rewards. I had no idea that this was possible. I have changed the permissions on my DOT stake to allow auto-compounding now. I'll try it out (free is nice!).
 
I received an email this morning from Ledger saying that pre-orders of the Ledger Stax will be shipping soon. From what I've read hear and there, the Stax is supposed to be much fancier version of the Ledger Nano S/X device that was announced some years ago and is finally rolling out to the market:
image


 
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I got confirmation from the stake pool operator that gas fees are paid by the stake pool operator when they auto-compound staking rewards. I had no idea that this was possible. I have changed the permissions on my DOT stake to allow auto-compounding now. I'll try it out (free is nice!).

Friday morning the balance of my rewards from my DOT stake reached the threshold for the auto-compounding, but the balance was still sitting unclaimed. I check again in the evening and reward had been successfully auto-compounded (added to my staking balance). It worked as advertised. :)
 
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