With staking, you buy a cryptocurrency in order to lock it up (stake it) in a smart contract. Once your stake is locked up, you vote to approve transactions (in our case, you don’t actually have to “vote” – it happens automatically).
In exchange for approving valid transactions, the network of the cryptocurrency rewards the staker with a staking reward.
A percentage of the staking rewards are used to cover the costs of operating the validator node hosting infrastructure and to keep it secure. We retain 10% of the rewards for that purpose.
Staking cryptocurrencies is an efficient way to earn passive income while participating in the world of digital currencies. Staking is much easier than mining or trying to time potential airdrops to accrue coins.
We only support non-custodial delegation, where we have no control over your assets. In practice, you are locking your tokens on a smart contract which grants us only working right, but no transfer right. In other words, your assets remain yours at all times.
In case of misbehaviour by a validator operator, part of all delegated tocken can be slashed (destroyed). Therefore it is imperative that you delegate your token to a validator you trust.
Validators run the infrastructure: Validators, like Cros-nest>, are special blockchain nodes responsible for the provision of infrastructure as well as proposing and validating new blocks and appending them to the blockchain. Hence, together with other validators, they ensure the blockchains’ security by monitoring its accuracy, establishing validity, guaranteeing availability, and provisioning the infrastructure for it to run on.
Validators earn staking rewards & fees: For their work, validators are rewarded in the form of block rewards & transaction fees. In order to participate in securing the network and to be paid for this service, validators are required
to lock up collateral “stake” which can be forfeited (i.e. “slashed”) programmatically if their actions break the programmatic rules that define the blockchain protocol which they secure.
Delegators contribute to the security of the blockchain: The right to validate and add, hence, to secure the validity of the blockchain, is attached to every Proof-of-Stake (PoS) token. Token holders who do not want to act as a
validator, but still want to contribute to the blockchain’s security and earn rewards, can delegate the rights contained in their tokens to a validator of their choice. These token holders are called delegators and can be considered
as a validators’ customer.
Delegators earn a return on their assets: If you stake your tokens with Cros-Nest, you are a delegator and are entitled to receive rewards for the delegation of your tokens. The amount of rewards a delegator can
earn through the services of a validator is a function of the validators’ total rewards and the ratio between the size of the holder’s own stake and the total stake of the validator. For their services, the validators charge
a fee on the token holder’s rewards.
Calculated as per: Yearly inflation * ((Total Staked) / (Max supply))
*Yearly inflation is 2% for CRO, 11% for KAVA, 3% for FET.
There is not lock period but an unbonding delay.
This delay depends of the network.
This delay is a security for the network.
We have deployed our infrastructure around the world. A core network of dedicated servers, each hosted at a different premium datacenter, is always supported by a second layer of dynamically and statically provisioned VPS hosts
with over 30 dedicated public IPs available.
It may sound like a lot, but in our experience, it's what it takes to weather the stormy turbulence of a successful blockchain. You could sign 100% of the blocks using a Raspberry Pi connected to a rural DSL, until transactions start mounting up. If there is congestion, forget to even try. With months of combined experience running several test validators on all available testnet environments, including the Crossfire resilience challenge.
Each component of the validator network is redundant. No single point of failure exists. The worst-case scenario, where the actual validation server becomes unavailable, signing would only be stopped for a few minutes ensuring
no possibility of double signing might take place. A fully redundant, ready-to-go validation node hosted in a separate location takes over until the main server is deemed operational.
We have put in place a tiered alert system which will notify us of any system instability or failure directly. Should we start missing blocks, we would be wakened up by our phones ringing, error report, and coffee in toe.
There is a lot less risk than in many other endeavors, however it is essential that you are aware of the risks that DO exist when staking on the Crypto.org network. There are four major risks associated with staking:
a. You are locking up your capital: You will have to wait the unbonding period before you will be able to transfer, trade, or dispose of your coin. This will reduce your ability to react to sudden shifts in the market or in personal conditions. The exchange value of your coin at the start of a stake may be vastly different than at the end.
b. You may choose an inactive validator: On the Crypto.org network only the top 100 validators will be considered active and receive rewards. This means that anyone delegating to validators deemed inactive will be locking their coin in exchange of no rewards but all the same risks. Fortunately, there is no cost and no delay to moving your stake from a node to another, active node.
c. Slashing: Slashing is the more common and less painful punishment for misbehaving or poorly managed validators. When a validator fails to sign over 999 blocks over the last 2000, its role as validator is suspended for one hour (or more if the operator isn’t attentive). When this happens, all staked capital is “slashed” (reduced) by 0.1%, and no blocks will be signed and rewarded during jail time.
d. Tombstoning: This is the worst possible scenario; you have staked your money to a node that has become compromised or misconfigured to an extent that it caused a fatal error. That validator key has been revoked and all capital is slashed by 5% and is final. Again, you always retain full control of your coin and may move it to any other node. Choosing a well-managed, enterprise-grade service provider will mitigate all the above. Please refer to https://www.crypto.org for more information. All numbers and comments here are subject to change on or before the chain launches on March 25th, 2021.