22 Nov 2023
How to stake TAO on Bittensor
This article provides a guide to staking TAO. It describes what staking on Bittensor is, how to stake and earn $TAO, how to bridge $WTAO and the potential benefits beyond the staking rewards.
Over the past year, Bittensor and its $TAO token have experienced a meteoric rise as awareness and in interest in the blockchain for AI applications is growing. At the time of writing, there are already 32 active subnets building AI apps and infrastructure on Bittensor, supported by a growing network of miners, validators, token holders and stakers.
The latter is key to this article, as we've created a step-by-step guide to earn Bittensor's attractive 17% yield for staking your $TAO tokens. We'll walk you through the concept of staking on Bittensor, how to exactly stake $TAO and the potential benefits beyond the staking rewards.
For an introduction to Bittensor, click here.
Bittensor is a blockchain protocol tailored to the development of Artificial Intelligence. It is building an open ecosystem that any AI developer can start building on. The top developers can deploy their own "subnet", which can be seen as a city in the country of Bittensor that focuses on a specific AI feature.
Bittensor also has its own economic engine, which is based on the blockchain's native token $TAO. This token is used to reward valuable contributions to the network, including providing computing power, keeping the network secure, building valuable AI-releated subnets and deciding who receives $TAO rewards.
Before you can stake $TAO, you need to know how to buy it and how to store it in your very own wallet. Below are the steps you need to take to do this.
You can buy $TAO on a growing number of crypto exchanges, and you can find the complete list here under "markets".
Once you've bought some $TAO, you have to send it from the exchange to your own wallet to be able to stake it. We highly recommend using Bittensor's official wallet, which you can find here. The wallet is non-custodial, meaning you retain control over your TAO holdings. Always make sure you have securely stored the private keys (write it down twice and store in 2 different places) of your Bittensor wallet and that only you have access to these private keys!
The most straightforward way to receive these incentives is to stake your $TAO. By staking, you help secure the network and help determine which contributors should receive $TAO rewards. Hence, it's important for the network who you select, as these will receive compensation and thus should add the most value to the ecosystem as a whole. For your participation in staking, you receive a 17% yield in new $TAO tokens. Keep in mind that these yields vary depending on the period and how many people are staking.
Now that you have your $TAO in your wallet, it's time start staking and earn that attractive yield! Staking is a rather straighforward process as the wallet has an easy user experience. As you can see in the image above, you can find the staking feature directly in your wallet interface. By clicking "Stake" at the bottom of the wallet, you access the staking interface.
The next step in the staking process is selecting which parties you're delegating your tokens to, or "nominating". These parties run validators to keep the Bittensor network secure, and are mostly building additional applications and services to support the ecosystem. You will need to take your time to select which validator contributes most valuable to the network (we will provide resources for this in the future). Another option is to follow the Wisdom of the Crowd and delegate to the top participants, as can be seen in the wallet's delegation feature.
Now that you've selected your validators, you can stake your $TAO. Search for the validator's address either in the wallet or on this page. Once you have found our validator, select them, decide how much $TAO you'd like to stake on this validator and confirm the transaction (cost a small amount of $TAO). You can now see your staked $TAO directly in your wallet dashboard under "stake". Staked $TAO can be unlocked at any time.
It is also possible to buy $TAO on Ethereum in a wrapped form ($WTAO). As this a wrapped version of $TAO, it cannot be staked directly, but you need to convert the $WTAO to native $TAO by using a bridge. We recommend using Bittensor's community-built bridge here. Once you've received your $TAO (should only take a few minutes) all the above described steps apply.
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We hope that after reading this article, everything is clear as to how to stake your $TAO. With such a rapidly growing ecosystem, the earned yield can turn out to be quite lucrative a few years down the line. Additionally, there could be sizeable future perks for nominating specific validators and using subnets, so don't forget to get involved!
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