Staking ICP is a good idea if you believe in the Internet Computer and want to earn ICP rewards with the ICP you already have. Here is the process right now (last updated on June 28, 2021):
1. Buy ICP
You can buy ICP on Coinbase or Binance. Find the Internet Computer token (ICP) and either convert other crypto into ICP or buy some with your available currency.
2. Create an Account in the Network Nervous System App
The network nervous system is the way that the internet computer is governed, and staking ICP will allow you to participate in the community governance of the internet computer. The app is https://nns.ic0.app/. This is the official Network Nervous System app, and the app that facilitates ICP staking.
3. Authenticate with Internet Identity
You will need to create an internet identity to login to the NNS app. This is easy to do if you have a fingerprint reader on your computer or phone or you have face id on your phone. If you do not have any of these biometric scanners available, then it is a little more complicated right now. You’ll need to get a physical key (like a Yubikey) in order to authenticate your device. There is another possibility (connecting to a wallet) but we won’t cover that here. They are working on additional methods of authenticating, but for now those are your options.
Be sure to authenticate multiple devices and create a backup seed phrase or use a physical key because if you lose your only authenticated device your account is lost forever. There is no recovering an account if you lose the only authenticated device.
4. Transfer your ICP to your NNS Wallet
Once you login with internet identity you should see a “Main” wallet displayed. There is a long wallet address underneath the name. This is the ICP wallet address for your “Main” wallet. Now, go to Coinbase or Binance (or wherever your ICP is) and transfer your ICP to that wallet address. It should only take a few minutes (at the most) for the transfer to go through.
You need to copy your wallet address exactly as it is written. If you miss a character, add an extra character, or mistype your wallet address, you will unfortunately be sending your ICP to somewhere other than your NNS wallet. It is a good idea to send a very small amount of ICP first to test and make sure you have the right wallet address before you do any serious transfers.
5. Stake your ICP
Once you have ICP in your main wallet you can click on the wallet, click on New Transaction, and then choose to stake it. The minimum amount of ICP required in order to stake is 1 ICP.
6. Select your Staking Options
Staking options are simple.
First, the Dissolve Delay. The Dissolve Delay means how long it will take you to get your ICP out of the staked neuron after you click “Start Unlock”.
If you set your Dissolve Delay to 8 years (the current max) then once you trigger your neuron to dissolve, it will take 8 years to dissolve before you can get your staked ICP out. That is a long time, but gives you 2x the reward than if you simply staked for 6 months. 4 years gives you 1.5x the reward, etc. If you never click “Dissolve”, your neuron will never dissolve and the dissolve delay will stay 8 years forever.
The Dissolve Delay has to be greater than 6 months for you to get any reward at all. You also need to vote on all NNS proposals in order to get your max reward. Both of these are to incentivize voters to try to maximize the value of ICP over the long term.
The next staking option is picking which neurons you want to follow for voting. By default, the Internet Computer Association is selected as the followee across all categories. This means your neuron will vote as the ICA votes across all categories.
Initially this is fine and will ensure your neuron is always voting, but eventually you may want to vote yourself or follow different neurons based on different areas of expertise.
You have to set your dissolve delay to at least 6 months to vote on NNS proposals and receive staking rewards. This incentivizes long term strategy and prevents bad actors from staking a large amount of ICP, voting on a proposal, and cashing out again quickly.
7. You’re Done! Congrats!
You should now see a neuron with staked ICP!
A few final things to remember…
8. Maturity and Spawning New Neurons
You will notice a Maturity % listed that shows your rewards. Maturity % is the number of ICP you have earned through staking divided by the total number of ICP you have staked in that neuron. So if I staked 100 ICP and my maturity was 0.01%, then multiplying 0.0001 and 100 ICP gives me 0.01 ICP. Your maturity will refresh once per day with the rewards from the previous day.
There is a “Spawn Neuron” button that is grayed out until I have at least 1 ICP in rewards. You can compute how many newly minted ICP you have by taking your maturity % and multiplying by the number of ICP you have staked in the neuron. Once your ICP rewards are greater than 1 ICP it will let you spawn a new neuron with the newly minted ICP staked in it. Once you spawn a new neuron it will have a 7-day dissolve delay after which you can either send it to a different wallet or add it to your existing staked wallet.
To add ICP to your existing staked neuron now (since the latest update), you just click on your neuron, then click the new button “Increase Neuron Stake”. Choose the account from which you would like to transfer ICP, and it will handle everything for you. (see strikethrough text below to see what you used to have to do)
To add ICP to your existing staked neuron, you need to first find the neuron ICP address. Click on the main wallet on the home page (or whichever wallet you used to send ICP to a staked neuron) and you should see a transaction history. Find the transaction where you sent ICP to a staked neuron and you can find the neuron address for your staked ICP neuron (in the “to” field). Use that ICP address when you are disbursing ICP rewards in the address field, or when you are trying to top-up a neuron from your wallet. The amount of staked ICP should automatically update (after a refresh). We still don’t have functionality to merge or divide neurons yet, but the NNS team are working on it.
Be careful when you are copying and pasting neuron addresses when sending ICP. If you accidentally include an additional character or remove a character you will send your ICP to a different (and unknown) wallet address, with no way to get your ICP back. So be careful.
9. Voting History
There is a voting history section. This shows you the latest NNS proposals your neuron has voted on and the status of the proposals, meaning whether the proposal was accepted or rejected. Your neuron only gets rewards when it votes, so make sure you are following someone you trust that is voting.
Finally, what kinds of rewards should you expect? This is a complicated question because it depends on your dissolve delay, the amount of ICP you have staked, who you follow, the age of your neuron, the number of voting proposals, the number of neurons participating in each vote, and the average age of all neurons. So here is a pretty good calculator to help you think through what rewards might look like: https://networknervoussystem.com/.
In general though, if you stake ICP with a dissolve delay of 8 years, rewards are around 27% – 29% right now. This will change over time as more ICP is staked in neurons.