Cryptocurrency Q&A
Is there risk with staking cosmos?
Is there risk with staking cosmos?
Andrea
Sun May 19 2024
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6 answers
1186
Could you please elaborate on the potential risks associated with staking Cosmos? I'm particularly interested in understanding the financial implications and any potential security concerns that might arise. Additionally, I'd like to know if there are any specific steps or measures that I should take to mitigate these risks and ensure a safer staking experience. Could you provide some insights into this matter?
6 answers
SejongWisdomKeeperElite
Tue May 21 2024
Specifically, downtime can lead to a slashing penalty of 0.01%. Slashing refers to the deduction of a portion of the staked tokens as a punishment for misbehavior or failure to fulfill certain responsibilities.
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KDramaLegend
Tue May 21 2024
To mitigate these risks, investors should carefully select validators and monitor their performance regularly. Additionally, they should diversify their staking portfolio to reduce the impact of any individual validator's downtime or misconduct.
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Carolina
Tue May 21 2024
Another potential risk associated with staking Cosmos ATOM is double-signing. This occurs when a validator signs two conflicting blocks within the same blockchain network.
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henry_rose_scientist
Tue May 21 2024
Double-signing is considered a serious validator misconduct and carries a significant penalty. In the case of Cosmos ATOM, double-signing results in a slashing penalty of 5%.
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DaeguDivaDanceQueen
Tue May 21 2024
Staking Cosmos ATOM involves certain inherent risks that investors should be fully aware of. One such risk is downtime, which occurs when a validator remains offline for an extended duration. This downtime can have significant consequences for the staking process.
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