Lum Network’s architecture is based on the Cosmos SDK algorithm. It is an open-source network that can be staked to earn and generate some passive income.

Let’s get started.

STEP 1: Claiming Your Lum Tokens

To get started with Lum staking, you must have a Keplr wallet having Lum tokens present. Once you have them, you just need to get started with the process to claim your Lum tokens.

• a. You must have Lum tokens in your wallet. If you don’t have any, purchase them.
• b. Then, you need to claim it and make sure of the amount that is eligible for staking.
• c. To do this, you need to go to airdrop.lum.network.

• d. Copy the address from your keplr wallet and paste it and click check airdrop.

• e. Once you paste the address, you will see how many Lum tokens you are eligible to receive.

STEP 2: Connecting With LUM Wallet

After you have claimed your Lum tokens, you need to go to the Lum wallet and integrate your Keplr wallet with the extension. For this purpose, you need to take the following steps.

• a. Go to Lum wallet wallet.lum.network.

• b. Now, you need to connect your keplr wallet extension by utilizing the same process (for this, you need to choose the extension option).
• c. Click on the keplr option then click continue.

• d. Keplr wallet will ask for your approval before connecting to the Lum wallet. So, you just need to approve that.

• e. Once connected, you will be able to see the available balance in your wallet.

STEP 3: Staking with the Delegator

After successfully connecting to the wallet, the process of staking begins.

• a. To begin, go to the staking option present at the top of the menu.

• b. Now, you need to choose the validator by scrolling down on the same page.
• c. Choose Lovali and click on delegate to stake your LUM tokens.

• d. Once you click delegate, a dialogue box will open asking you the amount of tokens that you want to stake.

• f. Make sure to not stake whole amount with the delegator and keep some for the transaction fees and other.
• g. After clicking continue, the wallet will ask for confirmation and your tokens will be staked with Lovali.

LUM Staking: Benefits & Risks

Although crypto staking can bring you some passive income, you cannot ignore the risks. Let us look at some of the benefits and risks of staking your Lum tokens.

Benefits:

a. Easy Way to Earn Interest

LUM staking is an easy way of making some passive income. If you are holding any crypto as a long-term investment, the best way to make some money from it is by staking them with a quality validator. Staking won’t make you lose your crypto; instead, it will bring you good returns.

b. No Equipment Required

One of the most significant benefits of crypto staking is no requirement of any equipment like you would require for mining. You can simply find a good delegator and that is enough to make money out of it.

c. Better than Mining In Terms of Environment

Staking, unlike mining, is more environment friendly and less costly. You don’t need any high-end machinery for staking your crypto, which means less budget and no environmental pollution.

Risks:

Bear in mind that staking risks exist, including risks associated with validator outage and double-signing. Additionally, users must wait 21 days before un-staking LUM from the network. Users will be unable to withdraw funds or receive points during this period.

a. Price Drop May Vanish Your Interests

Crypto is considered the most volatile form of the digital asset in the world. The prices keep varying within a short span of time. This means an extreme price drop might vanish most of your profits. So, you need to be aware of that and stake it accordingly.

b. Locked Tokens

Another considerable risk of staking your crypto is the locked tokens. You might not be allowed to un-stake the coins for a specific period even if the prices are going down and you are willing to sell them.

c. No Quick Un-staking

The un-staking time for LUM is 21 days. This means once you stake your coins with any delegator, you won’t be able to un-stake them no matter the situation. This brings some vast risks as the prices might vary at a fast pace, which can result in some losses.

LUM Staking: In a Nutshell

LUM staking allows the delegators to receive rewards from their tokens in exchange for their service/help to protect the network’s protocol. These rewards originate from the network’s transaction fees plus tokens released to stakers owing to the network’s inflationary reward strategy. Once the reward is earned, users can opt to withdraw or compound earned incentives on a per-block basis. However, the staking process works in a simple way. Validators simply run nodes that are accountable for safeguarding any protocol’s operations and provide staking rewards to the token holder. This way, the person who stakes their token is supplied with some passive income. However, the account holder won’t be allowed to un-stake the tokens before 21 days.