How to Stake LUNC? – A Detailed Guide (2023)

Let us now check how to stake LUNC through a detailed step-by-step process. It is as follows:

Step 1:

One needs to use a wallet for the process that supports the LUNC tokens. Earlier, the most popular choice was the Terra Station wallet, but now Terra Station has withdrawn support for the Luna Classic Network. Hence, we will choose the next best alternative.

We will be using the Atomic Wallet. The wallet supports both LUNA and LUNC, as well as Terra Networks.

So, download and install the atomic wallet app on your phone or desktop/laptop.

Step 2:

Open the Atomic Wallet, create an account, and safely store your 12-word seed phrase. It must be appropriately secured as digital wallets are decentralized, and they don’t have any mechanism to do a KYC for a customer. These seed phrases are the key to your wallet.

Create the account using a strong password but Don’t share the seed phrases with anyone.

Anyone with the key or seed phrases can access the Atomic wallet, the LUNC, or other tokens. It doesn’t matter if they know the password or not.

Any digital wallet allows users to recover their wallets with the help of the recovery phrase.

So, be extra vigilant.

Step 3:

Once the account is created, we need to fund our wallet. It can be done in two ways.

1. Buy any crypto in the atomic wallet and swap it to LUNC. Their swapping mechanism works in the same way as Terra swap, or Metamask works.

To do so, go to the navigation panel on the left and click “Exchange,” select from which token you will be converting to LUNC, and click on the “Exchange button” to complete the swap.

2. Buy LUNC from any other CEX, such as Binance, and transfer the tokens to the atomic wallet for staking.

We need to open the wallet and select LUNC to receive the tokens. Then click on “Receive.” Once we click on “Receive,” a page opens with a button called “Activate.”

Now, click “Activate,” and it will show the contract address for the LUNC tokens. Copy the address and go to the CEX, where you will send the LUNC tokens.

Paste the Deposit or Withdrawal address of the CEX, say Binance, and send the tokens to Atomic Wallet.

Step 4:

Once the LUNC tokens are deposited, we can start the Staking process.

We need to head over to the left navigation panel and click on the option “Staking.”

It opens a page called “Stake and Earn” with a list of tokens available for staking. Select the LUNC token from the list.

Once you select the LUNC token, it opens a page with two buttons

1. Stake LUNC
2. Unstake LUNC

It also shows the following information about your tokens:

• • Total
  • Available
  • Staked
  • Rewards
  • Unbonding

There is also a legend available for all the terms. It can be accessed by clicking the “LUNC Staking Hints” button in the top right corner.

Step 5:

So, let’s check the two options in detail are:

1. Stake LUNC – This button will give you the option to stake your LUNC tokens

So, now we need to enter the amount of LUNC tokens we want to stake and select the Validator by clicking the “Validator” button.

We should choose a validator with a lower commission, allowing us to earn more staking rewards. However, sometimes validators with a lower commission might need to be more trustworthy.

It is a catch-22 situation, but consider different aspects before deciding.

A validator with a higher commission and high voting power may also ensure that the validator is reliable.

On the other hand, higher voting power for validators may lead to centralization and defeat the very purpose of decentralization. So, choosing a smaller validator with lower voting power will not only give higher rewards but will also ensure it provides a level playing field.

However, thorough research must be conducted before choosing the validator.

When writing this article, the only validator available in the Atomic Wallet is the Atomic Nodes Validator, which offers a hefty reward of 19%.

There may be more validators in the future.

2. Unstake – This option allows you to unstake or release the staked LUNC tokens

Note: LUNC Token Burning Mechanism

To reduce the supply and inflate the value of the LUNC token, they are burnt through their token-burning mechanism. For Terra Classic, 0.2% of the tokens involved are destroyed for every transaction to deplete the total supply of the tokens in circulation.

Some validators burn the commissions they receive to support the ecosystem and this burning mechanism. This community feeling still gives the holders the hope that Terra Luna will again reach the top ten ranking like in old times.

Step 6:

Now, after you have entered the amount of LUNC tokens to be staked and selected, the validator. We need to click on “Stake” and complete the staking process.

Tip: This is a small reminder not to stake all your available tokens, as a small network fee needs to be paid for the staking process with LUNC. So, keep some of the LUNC tokens for this purpose.

We must remember that we cannot simply click on “Unstake” and release the tokens immediately after they are staked. There is a mandatory waiting period where the tokens are locked for at least 21 days before they can be released.

As soon as the process is complete, the LUNC tokens will be delegated to the validator chosen, marking the beginning of your staking journey.

You will receive the rewards in LUNC as per the contracts, and a portion of your earning will go to the validator for the block creation process that the validator will be doing.

At present, Atomic Wallet is offering annual rewards at 19%. It is by far the highest reward percentage in the market.

Remember that the rewards percentage may change depending on the on-chain value and the staked and unstaked LUNC ratio. Other network conditions may also affect the rewards earned.