 
How to generate passive income on Tezos
- by participating in staking -
About Tezos
Tezos is a new advanced and decentralized cryptocurrency. The network is based on a community-driven governance mechanism. This means that every HODLER of Tezos can influence the blockchain functionalities. For example holder of Tezos can agree/vote on features and upgrades of the underlying blockchain by participating in the voting mechanism. Compared to other Blockchains like Bitcoin, Litecoin, Ethereum, EOS etc. the blockchain can amend without forking the chain.
About the staking feature
Tezos uses a proof-of-stake protocol. This is called in the community as baking (arising from staking). This mechanism secures the network, like the known mining with Bitcoin. The difference between mining and baking is that your power does depend on the amount of Tez you hold not on the hardware power you have. Like with mining you will be rewarded to participate in the proof-of stake mechanism with Tezos tokens depending on the amount you bake or delegate.
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How to generate passive income on Tezos?
For participating in the validation of the Tezos blockchain you can earn block rewards in XTZ coins.
The current reward for staking Tezos can be around 6% per year.*
There are 2 main possibilities to participate:
- Baking on your own
- Use a delegation service - Preferred
Difference between Baking and Delegating
Baking
You can bake on your own by setting up a node and having at least 8,000.00 Tez. Please note that this is kind of "tech savvy" and you are putting your actual Tezos at stake
Delegating - RECOMMENDED
Tezos offers you the possibility to participate in staking without risking your coins by delegating your baking rights to a delegation service.
The delegation service will charge a fee for their service and distribute the remaining baking rewards to you.
How to securely delegate Tezos (XTZ) - Easy Tutorial
Easily delegate Tezos via Ledger Live Application
Ledger offers a new way to securely generate passive income on your Tezos coins while keeping your coins on your hardware wallet. Via "Ledger Live" it is possible to directly delegate your baking rights in its’s desktop/mobile application.
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Step 1:
Get a Ledger hardware wallet
Leder Live supports:
Ledger Nano S: Ledger Nano S - (https://shop.ledger.com/products/ledger-nano-s)
Ledger Nano X: Ledger Nano X - (https://shop.ledger.com/products/ledger-nano-x)
Tezos is supported on both devicesStep 2:
Download Ledger Live
Download the software from here
Ledger Live - (https://www.ledger.com/ledger-live)
Make sure you upgrade to at least version 1.19.2
Step 3:
Fund your Wallet and Delegate
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How to find a delegation service
There are several delegation services out there. Please do your own research on the specific service.
Below you find a list of community trusted delegation services.
What is good delegation service
Trust
A good delegation service is first of all trusted.
If you delegate your baking rights the reward will be distributed to the baker (in this case the delegation service.
The provider has to send the baking reward (minus the applied fee) back to you. That means that you have to trust the delegation service.
Fees
Every delegation service takes a fee for its service. Choose the delegation service with the best fee structure for you.
Overdelegation
Depending on the service's baking bond (amount of Tezos he is actually baking with) the delegation service can accept only a limited amount of Tez via delegation.
Overdelegated delegation services will not receive rewards for the overdelegated amount of Tez.
List of community trusted delegation services.
Please do your own research on whether the service is trustworthy and not overdelegated.
Tezzigator
Tezos Community
TEZ Rocket
PAYTEZOS
Tezos Bakery
Bake'n'Rolls
add your delegation service
Tezos Quicklinks: