We propose an interim adaptation of some of the staking mechanisms, in order to better align incentives towards further decentralization.
For Staking Phase 3.5, we propose the following changes:
- Adjust APR for Base & Top-Up stake
- Existing Validators can become Staking Providers
- Existing Validator nodes can be merged into Staking Pools
1st change – Increase Top-Up APR, decrease Base APR Decrease APR for Base Stake (2500 EGLD per node) and increase APR for Top-Up Stake (extra stake on top of Base).
Current APR: ~21% base & ~9% top-up
Will be: ~20% base & 14% top-up*
Reasoning: by decreasing the gap in rewards between Base & Top-Up Stake, staking more EGLD as top-up becomes more attractive and therefore Staking Providers can increase their staking caps.
*The figures are considering the current EGLD amount that is eligible for rewards, which is ~10.6mn EGLD when discarding the EGLD locked in the “Waiting List” and queued Validators.
A simulation with the APRs for the various amounts of EGLD staked is available here: https://docs.google.com/spreadsheets/d/1rpQhwaKy3GGcpA3zyv-ouEtL5P-MYjfTh1pwN2UBZes
2nd change – Individual Validators Can Become Staking Providers Without Unstaking First Existing individual validators can opt to become staking providers and accept 3rd party delegations from the community.
Currently: in order for an existing Validator to become a staking provider using their staked EGLD, they have to unstake, unbond, create a new Staking Pool, place their first node in the queue.
Will be: a Validator can choose to transform its standalone Validator Nodes staked from its own wallet into a Staking Pool.
Reasoning: By allowing more individuals to become Staking Providers, we increase the options available for those who want to further contribute to the Elrond Network, while also opening up new EGLD staking opportunities.
3rd Change – Existing Validators And Existing Staking Pools Can Merge An existing Validator can be merged into an existing Staking Pool.
Currently: in order for a Staking Pool to add more Validators, they need to set up a node, stake EGLD, and wait for their Validator to go through the queue, while not earning rewards.
Will be: a Staking Pool will be able to whitelist an external wallet and thus all the Validator nodes staked from that wallet. The whitelisted wallet can then merge its stake with the Pool’s stake, and all the rewards will be distributed accordingly.
Reasoning: There are Staking Providers with individual nodes who would like this flexibility. Properly executed merges could allow growth for Staking Providers and could further generate new EGLD staking opportunities.
Timeline & Next Steps The Elrond Staking Phase 3.5 proposal is aimed at continuing the excellent momentum that exists in the staking community. A strong Proof of Stake economy leads to higher decentralization and increased network security, which in turn attracts more valuable use cases.
The changes are expected to go live by mid of June.
Please review the Validators Town Hall Meeting where we introduced the Staking Phase 3.5 proposal and answered questions: https://youtu.be/k8CKA7HBTfo
Please share your support or suggestions in our forum post: https://forum.elrond.com/topic/1086-its-time-to-grow-staking-phase-35-proposal/
The original version of the article can be found at elrond.com