General Staking Information

What is a Proof-of-Stake network?

SAFE is a Proof-of-Stake (PoS) blockchain network. Unlike Proof-of-Work (PoW) networks like Bitcoin which rely on mining (a computer, or miner, competing with other miners to solve a complex math problem for the right to write a block to the blockchain), the computers on a PoS network use voting and staking to validate the transactions. These computers are called validators, they can increase their stake (or number of SAFE assigned to them) to increase their rewards.

What is Staking?

Staking is the act of assigning (also known as delegating) SAFE coins to a validator. You are not giving the validator access to remove your coins from your account, you are simply putting them in a locked account (that belongs to you) that allows the coins to increase the stake weight and voting weight of the Validator. In return, you get a portion of the staking rewards that the validator receives.

If you are running a validator, you can stake your own SAFE to it, and also have others stake their SAFE to it (which you can charge a fee for). The more SAFE you get delegated to your validator, the more staking rewards you get (which are divided among you and all the delegators), and the better the odds that you receive a block reward for writing a block to the ledger (which does not get shared with others delegating to you).

If you are not running a validator, you can stake your SAFE to someone else’s validator for a fee known as commission. This fee is a percentage of the staking rewards, you don’t have to pay upfront. The fee helps cover the costs of running the validator.

When you stake your SAFE to a validator, you get a portion of the staking rewards equal to the percentage of the overall stake that your coins make up (minus the percentage from the validator fee if you’re staking to someone else’s validator).

There is a staking ‘warm up’ period (currently up to ~2 days) when you first delegate coins. During this period, the coins aren’t earning rewards or being counted toward the stake, and you also can’t freely move them. This further helps to prevent fraud and attacks. Once warmed up (activated), the coins earn rewards until you wish to remove them and initiate a ‘cool down’ period, which is the same type of event as a ‘warm up’ period, but in reverse. Once the cooldown period is complete, the coins are no longer delegated or associated with the validator, and you can freely move them.