Welcome to the comprehensive guide on staking within the SwapDex and Kusari networks. Both networks utilize a Proof-of-Stake consensus mechanism, where staking is a fundamental aspect.
Staking involves locking your SDX or KSI tokens for a specific purpose and duration to support network security and operations. In return, participants earn rewards. There are two primary ways to engage in staking:
- Nominating: Support validators by staking tokens.
- Validating: Run a node to participate in network consensus.
Validators are responsible for creating new blocks and validating transactions. They are crucial to the network's security. Validators put their tokens at stake as collateral.
The network is designed to distribute rewards equally among all validators. However, validators can set a commission for their services. The remaining rewards are distributed proportionally among the nominators.
Nominators support validators by staking their tokens. They share in the rewards earned by validators.
Rewards are distributed pro-rata among the nominators after deducting the validator's commission. This means that your share of the rewards will increase with the number of tokens you have staked.
Anyone can become a validator candidate. Nominators can vote for validator candidates they trust. At the beginning of each era, the network selects the highest nominated validator candidates as the active set for the next era.
Rewards are distributed at the end of each era. Every validator pool receives essentially the same amount of tokens for equal work. However, each validator can set a customized commission. The rest is paid pro-rata to the nominators.
Slashing occurs if a validator fails to perform its duties or acts maliciously. Slashed tokens are usually added to the Treasury.
For added security, it is recommended to create two types of accounts:
- Stash Account: This is your cold wallet. It holds your funds and delegates certain functions to the controller account.
- Controller Account: This is your hot wallet. It acts on behalf of your stash account and is used for making decisions about nominating or validating.
Validators must be online and responsive. If a validator is offline, it may be chilled (temporarily removed from the validator set) and won't receive block rewards.
This occurs when a validator illicitly creates multiple blocks for the same slot. It is considered a serious offense and is punished by slashing.
This includes behaviors that pose a security or monetary risk to the network. Misconduct is severely punished by slashing.
- Monitor Your Node: Use monitoring tools to keep track of your node's status.
- Secure Your Server: Ensure that your server is secure. Regularly update your software and protect your server with firewalls.
- Be Cautious with Validator Selection: If you are a nominator, choose validators with a good reputation and performance.
Staking is an essential component of the SwapDex and Kusari networks. It is crucial for network security and offers an opportunity to earn rewards. However, it comes with responsibilities and risks. Whether you choose to be a nominator or a validator, it is important to understand the mechanics of staking, monitor your investments, and take steps to mitigate risks. ``The above content is a more detailed and structured version of the information you provided. It covers the essentials of staking within the SwapDex and Kusari networks, including the roles of validators and nominators, how staking rewards are distributed, the concept of slashing, and the importance of security and risk mitigation. This format aims to provide a clear and comprehensive understanding of staking for anyone interested in participating in the SwapDex or Kusari networks.