Polkadot

Time factors

Protocol time
Human readable time
Protocol time 1
Slot
6 seconds
Protocol time 2
Epoch (= 2,400 slots)
4 hours
Protocol time 3
Era (= 6 epochs)
24 hours
First reward delay
1 era
24 hours
Reward frequency
After end of each era
24 hours
Unbonding period
28 eras
28 days

Lifecycle

Must know before staking

Minimum stake amount
Stakers must have enough stake to meet the nominator cap conditions. Stakers can start staking with nomination pools with 1 DOT.
Partial stake changes
Partial reward withdrawals
Compounding
⚠️
Stakers have the option to automatically add rewards to their staking balance or to withdraw immediately.
Penalty
Offline - Up to 7% of stake
Slashing
Equivocation - Up to 100% of stake
  • Delegating is called nominating on Polkadot.
  • Stakers can nominate up to 16 validators. The protocol automatically allocates stake across the nominated validators. Please note that this allocation mechanism maximizes the opportunity for the stake to become active, but does not optimize for the stake to actually earn rewards (i.e. nominator caps described below are not taken into account).
  • Nominator caps.
    • Only the top 22,500 nominators (ranked by stake) can receive rewards for an era across the entire network.
    • Only the top 512 nominators of each validator can receive rewards for an era.
    • Both conditions must be met in order to receive rewards.
  • Nomination pools. In order to bypass the limitations of nominator caps, nomination pools exist. Nomination pools let stakers pool their stake into one pool entity that can then nominate 16 validators.
    • There can only be a maximum of 128 nomination pools.
  • Rewards must be claimed.
    • Staking rewards must be claimed after an era has ended. Only one claim is required per era and validator to trigger reward payouts for all nominators of that era and validator.
    • Rewards will expire after 84 eras and will be lost forever if not claimed within this time. It is recommended to claim rewards within 28 eras because a validator unstaking can also result in all unclaimed rewards to be lost.

Advanced topics

General

  • Stakers can set up different accounts to manage staking actions.
    • Stash: This account will hold the funds and is meant to be kept in a cold wallet. It has the power to stake additional tokens and set up or change a controller account and a staking proxy account.
    • Controller: This account can control unstaking, restaking, validator selection and reward destinations.
    • Staking proxy: This account has the same power as a Controller account, but can also stake additional tokens and set up or change a controller account. However, it will not be able to move the funds like the stash account can.
  • Stakers cannot stake and participate in a parachain crowdloan at the same time. Some parachain projects will crowdsource the DOT required to win a parachain slot. DOT cannot be staked and used for a parachain slot simultaneously.
  • Any tokens slashed or penalized are sent to the protocol’s Treasury rather than being burned.

Rewards

  • Rewards come from newly issued tokens and transaction fees.
    • Inflation rate applied to total token supply. The protocol issues 10% of the total token supply on an annual basis. If the protocol’s staking ratio is on target, all newly issued tokens go to stakers. If the protocol’s staking ratio is below or above target, the portion of newly issued tokens that go to stakers decreases, and the remaining portion goes to the protocol’s Treasury. The target staking ratio begins at 75% and adjusts according to the following formula:
      0.75(occupied parachain slots/200)0.75 - (\text{occupied parachain slots} / 200)
      . For example, if there are 50 occupied parachain slots, the target staking ratio will be 0.5.
    • Transaction fees. The block proposer will receive 20% of transaction fees and the remaining 80% will go the protocol’s Treasury. Transactions may also include a tip fee which goes directly to block proposers and incentivizes quicker inclusion.
  • Factors that impact realized rewards.
    • Validator performance. Validators need to properly perform their responsibilities of producing and attesting on canonical blocks to increase reward amounts.
    • Parachain validator selection. Verifying the validity of parachain blocks earns the most rewards for validators. Validators are selected randomly to perform these validity checks.
    • Commissions.

Risk

  • Penalty. A validator that fails to send a heartbeat and produce any blocks for one epoch will be considered offline. It will have its own and delegators’ stake deducted and forcefully exited from the active validator set. If more validators are offline simultaneously, the deducted amount will increase.
  • Slashing. A validator who proposes or votes two different blocks for the same height will be considered malicious. It will have its own and delegators’ stake deducted and forcefully exited from the active validator set. If more validators are slashed simultaneously, the slashed amount will increase.
  • Reward conditions. There are multiple conditions that a staker must meet in order to earn rewards (nomination cap, reward claim, validator performance). The protocol requires active monitoring from stakers.

Validators

Total validator cap
297 validators
Validator requirements

Resources

Last modified 8mo ago