What is staking?
Staking is the process of securing the network, by validating transactions, in a Proof-of-Stake system. It serves the same purpose as mining in a Proof-of-Work network such as Bitcoin. However, staking consumes far less electricity lowers the risk of centralization.
When you stake your FTM, the tokens are locked up. They’re still in your wallet and only you have access to them, but you can’t use them for any other purpose until you decide to unstake them.
The current unbonding period is 7 days; during this time you will not receive rewards.
In exchange for your willingness and effort to stake your tokens, you get rewarded. The reward percentage is variable: the higher the total staked amount, the lower the reward percentage each staker receives.
On Fantom, you can stake as little as 1 FTM.
Rewards Schedule
Network Rewards will be as follows:
16.48 FTM per second ($0.165 / second), or
1,423,872 FTM per day ($14,238.72 / day), or
42,716,160 FTM per month ($427,161.60 / month).
Rewards are very high to reward early adopters of the network and dilute as participation increases.
Percentage Returns for a given amount of FTM Staked in the Network
Rewards are calculated per epoch as follows:
Rewards = epoch duration (in seconds) * Network Rewards + epoch transaction fees
There is a fixed commission rate of 15% that validator nodes earn from the rewards generated by delegators to the node.
To encourage users to stake FTM, and thereby increase the security of the network, rewards are locked until the minimum staking amount of the network (starting at 80%) is reached. This minimum staking amount decreases every second, on average, 1% a week).
Rewards are locked for a 6 month period from the launch of the mainnet (12/27/2019).
Becoming a Fantom validator
Validator nodes are an essential part of the Fantom network. Validators run a full-node and participate in consensus to increase security and to forge new blocks containing transactions.
To run a validator node, you need at least 3,175,000 FTM.
Running a validator is a complex task. If you don’t have experience as a system administrator and a good understanding of Unix commands, we discourage you from running one. Mistakes can be costly as you can lose all your stakes.
Recommended hardware
We recommend running at least an AWS T2.large EC2 instance (or equivalent) and at least 800GB of Amazon EBS General Purpose SSD (gp2) storage (or equivalent).
Check out the complete guide on how to set up a validator node.
Frequently asked questions
- Why should I stake?
By staking, you actively participate in securing the network. You will earn passive income by getting rewarded in FTM.
- What wallets can I use?
You can use Fantom mobile wallets (iOS and Android) or the web/desktop version.
- Are my tokens safu when I stake?
Yes. Nobody except you will have access to your tokens. Make sure not to lose your mnemonic phrase or private key.
- Can I lose my tokens when staking?
If you stake to a validator node that acts maliciously, you can lose all your staked tokens. It is important that you choose the validator node wisely and make sure they’re reputable.
- Can a validator run away with the money?
No. In any case, a validator does not have access to any other tokens than its own. However, if a validator acts maliciously all the funds staked to that node can be lost.
- What happens if a validator goes offline?
If a validator node goes offline, it stops receiving rewards since it’s not helping secure the network anymore. When it comes back online, the rewards resume.
- Can I delegate multiple times?
You can delegate as many times as you want, as long as you use a different address every time. At the moment only one delegation per wallet is possible.
- Can I use my tokens while staking?
No, you cannot use your tokens while staking. To withdraw them, you have to unstake them first. Unstaking takes 7 days.
- What happens if I unstake my tokens during the lockup period?
If you unstake your tokens during the lockup period, you will lose the rewards and those rewards will be burned.
- How long does it take to unstake my FTM?
It takes 7 days. During that time you will not receive rewards. Once the 7 days pass, you can withdraw the tokens from your wallet.
- Why are there unbonding times?
Long unbonding periods create stability in the network and prevent attackers from withdrawing their stake before the effects of their attack is reflected on the market
- Does my computer have to always be connected to stake?
Not at all. Staking happens on-chain, so it’s completely independent from your computer, mobile device or wallet. Once you have staked your tokens, you can safely log out from your wallet and if you want you can periodically access it to check your rewards balance.
