Today, we are pushing live a new staking service for validators who lack the resources or know-how to maintain their own nodes. The core team will run virtual nodes on behalf of those who opt for this alternative, and pay out up to 40% APY depending on the terms chosen.
Please read on for more context behind this new feature, and how it interacts with related elements of the Incognito roadmap.
Another option for validators
Over the past few weeks, we have spoken to a significant number of validators. Many of whom have made large investments into the future of incognito and want to continue powering the network – but have found themselves unprepared for what it takes to maintain a healthy node. Now that slashing has been implemented, requirements are more complex than simply being online.
Since pNodes have been phased out, there is a need for a more accessible and user-friendly option for validators. With this staking service, we hope to achieve greater stability, community participation, and continued network growth. So as not to derail our efforts towards decentralization, we are working in parallel to release the network, as well as to lower the difficulty of running a virtual node.
What’s next for validators
More network ownership. Within this year, community nodes (self-run or through staking services like this one) will comprise the majority of every committee. More details will be released soon.
Easier node operation. Upcoming and new improvements like staking flow v3 will improve the validator experience and make it simpler to maintain healthy nodes. Our @support team is on hand for those who choose to do so.
A healthy ecosystem needs to be varied enough to support different needs and requirements. Our hope is that more community members will create their own staking initiatives to help out fellow node operators, present and future. If you are thinking of doing so and want to bounce ideas, we are happy to support you to the best of our ability.
How the staking service works
So we can roll this out quickly, the new staking service will be accessible from the Provide interface. Here’s a high-level diagram of how it works.
It is still on the roadmap to phase out Provide (as a liquidity provision feature), in favor of decentralized provision in pDEX v3. What remains will simply be an additional staking option as detailed above, perhaps as an extension of the Power tab.
Please note that this staking service has centralized elements. At this time, self-run virtual nodes are the only fully decentralized option for powering the Incognito network.
How terms and rates are determined
Based on historical data, we project that the equilibrium of the number of nodes in the network is around 2500, each yielding about 40% APY over the course of a year when taking into account random selection. This comprises the upper bound.
Based on this projection, the staking service will launch with 3 options to choose from.
- For flexibility: the current withdraw anytime option stays at 21% APY.
- For medium term: 6 months at 30% APR.
- For longer term: 12 months and 40% APR.
Depending on network conditions, terms and rates may be subject to change in the future. However, rates at the time of deposit will remain fixed for the duration of the chosen term.
The staking service goes live today
You will be able to access it from the Provide tab in your Incognito app.