Using the IC

Staking ICP Tokens

Learn how you can stake ICP tokens in a neuron of the Network Nervous System (NNS) to earn staking rewards and to participate in governance

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 ICP Staking Guide

Staking in the Network Nervous System Explained

Preliminary Preparations

To participate in governing the Internet Computer network and to earn staking rewards, you need to lock up your ICP tokens in a neuron of the Network Nervous System (NNS).

This step-by-step guide walks you through the process of staking your ICP tokens.

The following covers how you can stake your ICP tokens. To do so, you need an Internet Identity and access to the Network Nervous System front-end dApp. If you haven’t already done so, create an Internet Identity and log into the NNS dApp. To learn more about the native utility token of the Internet Computer, see What are ICP tokens?

The Basics of Staking

To guide you in meeting a sound staking decision, it is helpful to address the very basics of locking up ICP tokens.

What is the Network Nervous System (NNS)?

The NNS is the controlling mechanism which governs the Internet Computer. It is a tokenized open governance system that manages decision making in the IC ecosystem.

Users wishing to participate in governing the Internet Computer by creating and voting on proposals need to lock up a stake of their ICP tokens to create a representative in the NNS, a so called “neuron.”

What are neurons?

Neurons represent a stake of ICP utility tokens that are locked and cannot be exchanged for a for a given period, i.e. the lock-up period.

Benefits of locking ICP tokens in a neuron

Individuals or organizations that lock ICP utility tokens in a neuron benefit from the following:

Governance Rights

Neuron holders are able to make proposals and vote in the governance process of the Internet Computer. Doing so allows users to participate in decision-making

Voting Rewards

To incentivize the participation of neuron holders in the governance process, voters are rewarded proportionately to the number of locked up ICP tokens and the length of the look-up period

It is important to note that you need to vote in order to receive staking rewards. This can be done manually but we will also show you how you can automate your voting to maximize voting rewards.

Calculating staking rewards

Let’s have a look at the factors that determine your staking rewards:

Stake size

The number of ICP tokens that you lock in a neuron

Staking period

How long you intend to keep your ICP tokens locked up

Dissolve delay

The time it takes to unlock your stake by fully dissolving the neuron

To easily calculate your estimated staking returns, have a look at the ICP Neuron Calculator

Staking terminology

Here’s an overview of the terminology you may encounter during the staking process:

Maturity

The maturity of your neuron increases when you vote.

Neuron Spawning

Once the maturity of your locked stake reaches the minimum threshold of one ICP, you can create a new neuron (i.e. you can “spawn” a new neuron)

Dissolve Delay

The time it takes to unlock your stake by fully dissolving the neuron

Disbursing

Once the neuron has fully dissolved, it can be disbursed to unstake your ICP. Disbursing the neuron’s stake transfers your locked ICP into your wallet

Staking ICP Tokens in a Neuron

Step-by-step instructions for locking your ICP in a neuron

#1 – Connect to the Internet Computer

You can connect to the Internet Computer via the user-friendly Network Nervous System (NNS) dApp. To do so, open your web browser and navigate to the Network Nervous System (NNS) dApp.

Next, authorize authentication with your Internet Identity and log into the dApp.

Here are guides for creating an Internet Identity and for logging into the NNS dApp.

#2 – Send ICP tokens to your wallet

In order to stake, you need ICP tokens. There are different ways of getting ICP tokens, for more details see Get ICP. Once you have acquired ICP tokens, you’re good to go.

In the next step, send the ICP tokens to your NNS wallet. You can withdraw ICP tokens from your exchange wallet by copying and pasting the address of your wallet in the NNS dApp.

Here is how your ICP address should look like in the NNS dApp:

#3 – Staking ICP in a neuron

After you have withdrawn your ICP tokens from your exchange wallet, you should see them in your NNS wallet one or two minutes later.

In the next step, click on Neurons and then on Stake Neuron. You can now select the account that you want to use to stake with. In most cases, this is your Main account.

Type the number of ICP tokens you would like to stake and click on Create to confirm. The dApp will now ask you to set a dissolve delay.

If you set a dissolve delay of less than six months, you will not receive staking rewards.

Automatic voting

Maximizing your staking rewards through automatic voting

Only neuron holders that participate in governance votes receive staking rewards. To maximize your staking rewards, it is recommended to enable automatic voting.

#4 – (Optional) Enabling automatic voting

After you have locked up your ICP in a neuron, the dApp asks you if you want to follow other neurons. By following neurons, you automate your voting which will give you the maximum voting rewards. It is important to note, however, your governance votes on proposals will be identical to the neuron you are following.

You can always change the voting settings via Neurons and Edit Followees.

Follower Structure Decentralization

Decentralizing the governance of the Internet Computer

Problem outline

The present NNS follower structure is not decentralized. This is a result of community members, investors, employees, and other stakeholders setting their neurons to automatically follow the voting behavior of neurons controlled by the DFINITY Foundation and/or the Internet Computer Association.

There are four key reasons why stakeholders choose to follow the voting behavior of the two organizations:

Consistent voting

In order to receive the maximum amount of voting rewards, neurons need to vote on every proposal. This can be time-consuming and leads to opportunity costs if proposals are overlooked. For this reason, community participants choose to follow neurons that vote on every proposal, i.e. those in control by the ICA or the DFINITY Foundation

Default follow options

When choosing a neuron to follow, the neurons of the ICA and the DFINITY Foundation are being displayed as the default options. To follow another neuron, one would have to enter the neuron ID which adds further friction as one would have to know who else to follow and what their neuron ID is.

Lack of technical expertise

Many investors and committee members may lack the required expertise to evaluate proposals and to vote in the best interest of the IC network.

Trust

Another aspect that may lead community participants to follow the ICA or DFINITY Foundation neurons is trust. It is difficult for community members to assess if a neuron aside from the default options is diligently voting on every proposal and does so in the best interest of the network.
Decentralizing the follower structure

To help in decentralizing the follower structure, we have created a list for you which includes the neuron IDs of active neurons you can follow:

  • ICP Maximalist Network (ICPMN), Neuron ID: 4966884161088437903
  • cycledao.xyz, Neuron ID: 5967494994762486275
  • ICDevs.org, Neuron ID: 14231996777861930328

What are Neurons?

Learn more about the neurons of the Network Nervous System and what purpose they serve

More about Neurons

Managing Neurons

Find out how you can manage neurons in the NNS dApp after creating a neuron

Manage Neurons