Staking is a common mechanism in the blockchain, and currency users can participate in network maintenance and obtain benefits at a low threshold.
In the Kusama network, "nomination" is one of the ways to participate in staking (the other is the verification node that runs the network by itself). After the token holder binds his KSM token in the Staking , he needs to select one or more validators as his nomination, so that he can continue to obtain the profits obtained by the validator when processing network transactions.
Why staking KSM?
staking is one of the key functions of KSM in the network. The larger the proportion of KSM used for staking, the higher the staking return rate.
KSM inflation system setting: when the system staking rate is lower than 75%, the annual average return rate will be higher than 20%, which can encourage more KSM tokens to participate in the staking; on the contrary, when the system staking rate is higher than 75%, The average annual rate of return will be less than 20%, encouraging some miners to withdraw.
In order to ensure network security, KSM will be inflated according to the staking rate of the entire network. According to the economic incentives set by the inflation system, the KSM token staking rate can be stabilized at 50%. Under this staking rate, the annual inflation is 10%.
If the user holding money does not use KSM as a staking, the value of KSM in the user's hands will be gradually diluted in inflation. For example, Tom and Bob both have 100 bucks. Tom stores the money in the bank and has interest every year. Bob has been holding 100 bucks in cash. After 10 years, Tom's money has become 200 yuan, and Bob still only has 100 yuan, so Bob's money has become relatively less. So for KSM coin holders, if you do not staking KSM, it means that there are fewer and fewer coins in hand.
What is a verification node?
The verification node is an entity that maintains the stable and safe operation of the Kusama relay chain and processes transactions on the chain. They maintain network security in the following three ways:
Verify the information of the collector on the parallel chain
Voting on network consensus with other verification nodes
What are Stash and Controller?
"Stash" and "Controller" are new concepts in Kusama staking, and they are both wallet address.
The users participating in the staking mining will manage the address of the token.
For addresses participating in stakings, governance, etc., the "Controller" requires the authorization of the "Stash".
If this is the first time you have staking, you do not need to set up a "Stash" and "Controller" during use. Ellipal has set it to the same account;
If you have used staking in other products and have already set up an account relationship, Ellipal will retain the account relationship you set before.
In Ellipal, the stash and the controller are set to the same account by default and cannot be changed.
What is Bond?
Select a part of KSM from the wallet to staking, this action is called bond. After bonded, the verification node can be nominated. "Bonded" shows the number of KSMs this address bond.
How to Bond？
If there is 100 KSM in the wallet, you want to bond 50 KSM for staking. Click the "Bond" button, set the number to 50, confirm to complete the bond operation.
What is Unbond?
Unbond is to redeem the bonded KSM. It should be noted that the unbond KSM will not be transferred to the wallet immediately. Within 0-7 days after unbond, the unbond KSM will be "Unbonding" and become "redeemable" after 7 days.
How to Unbond?
Click the "Unbond" button, set the unbond number, confirm to complete the unbond operation.
What is Redeem?
After 7 days of unbondling, the KSM will be in the "Redeemable" state. At this time, the unbond KSM can be redeem by using the redeem function.
How to Redeem?
Click the "Redeem" button, enter the redeem quantity, confirm to completethe redeem operation.
What is Payouts?
To receive the reward from staking, click the "Payouts" button to receive it.
When you initiate a nomination, you must wait at least for the Kusama network to enter the next ERA before your nomination information becomes effective. This process is completed in about 1 to 6 hours. After the nomination takes effect, the reward will be settled against each ERA, approximately once every 6 hours. If the validator you nominate is selected by the network as the current transaction, then you will share the revenue with the validator.
The Kusama network provides two ways to obtain Staking benefits:
Passive income acquisition means that when any nominee receives the income, the verification node will distribute all the current income to his nominee.
Proactively claim revenue
Proactive claiming revenue means that the user clicks "claiming reward" to actively initiate claiming operation.
The risk of KSM Staking?
When you nominate a validator, your staking income and risk are "bound" to the validator.
If the verifier runs the node stably and does not drop the line, and performs operations according to the rules of the network, then you will securely obtain the benefits of staking, otherwise if the node you nominate frequently drops or does a transaction that violates the network rules, it will be punished by the network At this time, the amount you bind will also be punished.
In summary, the reliability of the validator largely determines the amount of risk you face when participating in staking.
What is a validator election?
he validator election is to select a batch of new validator nodes for the Kusama network. The election will be conducted at regular intervals. During the election, the relevant operations are temporarily uncontrollable. The function will return to normal after the new validator is selected. In most cases, the election will end in about 10 minutes.