TerraUSD (UST) Staking Overview
TerraUSD (UST) is a stablecoin with a scalable and yield-bearing value pegged to the US dollar. Staking UST involves locking up tokens in a smart contract to earn rewards in UST or other Terra-based tokens, helping to maintain the stability of the UST peg. You can stake UST on various platforms supporting Terra-based tokens, with earnings depending on the stake amount, duration, platform, and market conditions. A staking calculator can help estimate potential earnings.
For those who hold TerraUSD and want to earn passive income, staking could be a viable choice. This guide is designed to help you understand how to stake your TerraUSD and receive rewards.
How to Stake TerraUSD (UST)
To stake UST, users need to follow the given steps:
Step 1 : Download and install the Terra Station Wallet and log in to your account
Step 2 : Navigate to the staking tab
Step 3 : Choose a validator to delegate
Step 4 : Delegate UST to your chosen validator
Step 1: Download and install the Terra Station Wallet and log in to your account
First, download and install the Terra Station Wallet desktop application from the official website. Follow the instructions to complete the installation process. Log in to your existing Terra account using your mnemonic phrase or Ledger device. If you don’t have an account, create one by clicking on “Create Wallet” and following the steps.
Step 2: Navigate to the staking tab
Access the Staking tab on the left-hand side of the wallet to view your UST balance and see the total amount of UST staked, the annual percentage rate (APR) of staking rewards, and the list of validators.
Step 3: Choose a validator to delegate
Choose a validator to delegate your UST to. You can sort and filter validators by various criteria and select one with a good reputation, low commission rate, high uptime, and enough self-delegation.
Step 4: Delegate UST to your chosen validator
Delegate your UST to your chosen validator by entering the amount you want to delegate, selecting your validator, and paying the gas fee if necessary. Confirm your delegation and sign the transaction with your password or ledger device. After confirmation, your delegated UST will appear in your account balance and in the validator’s details.
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Best Places to Stake TerraUSD (UST)
Option 1: SwissBorg
SwissBorg is a Web3 platform that offers wealth management services and enables the buying, selling, and trading of cryptocurrencies. One of its key features is staking UST, which allows users to earn interest on their locked tokens, with up to 18.5% APY. Staking UST in SwissBorg is simple, and rewards are paid out daily. Users can also access other features such as smart yield, premium membership, and community rewards.
- Earn yield immediately upon deposit or purchase of UST on the SwissBorg app.
- Benefit from UST’s scalability and interchain usage as an algorithmic and decentralized stablecoin pegged to the US dollar and backed by LUNA.
- Access monthly reports from SwissBorg for a transparent overview of your Smart Yield wallet’s performance and asset allocation.
- Withdraw UST at any time with no minimum investment period.
- Pay a 0.5% fee when depositing or withdrawing UST on the SwissBorg app.
- Trust SwissBorg’s strategy optimizer, which may not always find optimal investment opportunities for your UST.
- Bear the risk of UST losing its peg to the US dollar due to sudden drops in demand or a failure in the minting mechanism of UST.
- Deal with regulatory uncertainty and security risks associated with investing in crypto assets.
Option 2: Terra Station Wallet
Terra Station Wallet is a desktop application that enables users to manage their Terra account and interact with the Terra blockchain. By staking UST on Terra Station Wallet, users can earn variable rewards based on the validator's performance and commission rate. Staking UST is easy, and users can undelegate or redelegate their tokens at any time. It also offers additional features such as governance, swap, send, and receive.
- Earn variable rewards on staked UST, potentially higher than fixed rates.
- Choose from a variety of validators with different performance and commission rates.
- Access other features such as governance, swap, send, and receive
- User-friendly and secure interface supporting multiple languages and currencies.
- Benefit from LUNA token governance rights and discounts on fees.
- The 21-day waiting period to unstake UST with no access or transfer during that time.
- Trusting a third-party application with UST tokens and private keys.
- Compliance with KYC and AML regulations of Terra Station Wallet.
- Market volatility and regulatory uncertainty of cryptocurrencies to consider.
Option 3: Binance
Binance Chain Wallet is a browser extension that allows TerraUSD (UST) to be staked and rewards to be earned from various protocols such as Anchor, Mirror, and Pylon. To begin, the wallet must be downloaded and installed, UST must be deposited or purchased, and a protocol that supports UST staking must be selected from the DApps tab after logging in with a Binance account. While the UST can be unstaked at any time, fees and conditions may differ depending on the protocol.
- Earn rewards from various protocols that support UST staking, such as Anchor, Mirror, Pylon, etc.
- Access the Binance Smart Chain network and its applications.
- Swap, send, and receive various cryptocurrencies, including UST.
- User-friendly and secure interface that supports multiple languages and currencies.
- Benefit from the BNB token, which gives you governance rights and discounts on fees.
- Pay gas fees for staking and unstaking UST, which are paid in BNB.
- Trust a third-party extension with your UST tokens and private keys.
- Comply with the KYC and AML regulations of Binance.
- Deal with the market volatility and regulatory uncertainty of cryptocurrencies.
Benefits of Staking TerraUSD (UST)
- Staking TerraUSD (UST) can provide interest earnings on stablecoins with a steady value pegged to the US dollar.
- Supporting the Terra ecosystem can provide access to various DeFi protocols and applications that use UST as a medium of exchange.
- Staking LUNA, the native token of Terra blockchain, can give governance rights and fee discounts.
- High scalability and interoperability are possible due to UST’s proof-of-stake consensus mechanism and cross-chain migration capabilities.
Frequently Asked Questions
What is staking TerraUSD (UST)?
Staking TerraUSD (UST) means locking up your UST tokens and delegating them to a validator who secures the Terra blockchain. This process lets you earn interest on your staked UST and support the Terra ecosystem, which offers various DeFi protocols and applications that use UST as a medium of exchange. Additionally, staking UST allows you to participate in governance by staking LUNA, the native token of the Terra blockchain, which grants you voting rights and discounts on fees.
How much can I earn by staking TerraUSD?
The amount you can earn by staking TerraUSD (UST) depends on the platform and validator you choose to stake with. In 2023, some platforms such as Binance, Bybit, and Nexo offer high-interest rates for staking UST, ranging from 17% to 19.63% APY. However, keep in mind that different platforms and validators may offer different interest rates and fees for staking UST.
What are the risks of staking TerraUSD (UST)?
Staking TerraUSD (UST) carries several risks that potential investors should be aware of. These risks include UST’s instability and volatility due to market forces, liquidity constraints on some platforms, the requirement to lock up tokens for a specific period, exposing investors to penalties for early unstaking, security concerns such as hacking and fraud, and regulatory compliance and legal risks. Investors should conduct their own research and due diligence before deciding to stake their UST tokens.
How can I unstake or withdraw my TerraUSD (UST)?
To unstake or withdraw your TerraUSD (UST), first navigate to the staking section of the platform or wallet where you staked your UST. Then, you need to choose the option to unstake, undelegate, or withdraw your UST from the validator you delegated to, enter the amount of UST you want to unstake or withdraw and confirm your transaction. After that, you should wait for the unstaking or withdrawal process to complete, which may take some time depending on the platform’s or validator’s rules. Finally, you can transfer your UST to your desired destination, such as another platform, wallet, or exchange.