Tezos

Time factors

	Protocol time	Human readable time
Protocol time 1	Block	15 seconds
Protocol time 2	Cycle (= 16,384 blocks)	2.84 days
First reward delay	13 cycles	36.98 days
Reward frequency	Every cycle	2.84 days
Unbonding period	None	-

• First reward delay could be 8 cycles (22.76 days) depending on a validator’s terms and conditions for the reward payout schedule.

Lifecycle

Must know before staking

Minimum stake amount	⚠️	Depends on a validator’s terms and conditions.
Partial stake changes	✅
Partial reward withdrawal	✅
Compounding	✅
Penalty	❌
Slashing	✅	Conflicting block proposals - 640 XTZ Conflicting consensus votes - 50% of self-stake

• Validators are called bakers on the protocol.

• There is a 7 cycle delay for any stake changes to take effect.

• Rewards are locked for 5 cycles after being issued.

• The protocol issues staking rewards directly to validators. It is up to validators to then distribute staking rewards to their delegators. Terms and conditions for the reward payout schedule will be different for each validator.

  • Some validators pay out rewards as soon as they are issued without waiting for them to unlock in 5 cycles.

• Rewards are added directly to the staking balance of stakers.

Advanced topics

General

• Consensus votes are called endorsements on the protocol.

• Each block can receive 7,000 consensus votes. A block needs only 4,667 votes, but the block proposer can can receive bonus rewards by including more votes.

Rewards

• Rewards come from newly issued tokens and transaction fees.

  • Fixed number of tokens issued per block. There is a maximum of 5 XTZ issued for block proposers and 5 XTZ issued for consensus voters.

  • Transaction fees.

• Factors that impact realized rewards.

  • Validator performance. Block proposers earn a base of 5 XTZ for successfully proposing a block that includes 4,667 consensus votes. For additional consensus votes, a validator can receive bonus rewards. Consensus voting validators must successfully submit their votes in order to receive rewards.

  • Commissions.

Risks

• Slashing.

  • If a validator proposes two blocks at the same height, it loses 640 XTZ of its own stake.

  • If a validator submits a consensus vote on two blocks at the same height, it loses 50% of its own stake.

• Slashing applies to the validator’s own stake. Delegators’ stake is not at risk.

Validators

Total validator cap	❌
Validator requirements	✅	6,000 XTZ

• A validator can have up to 9 times their self-staked amount as delegations. For example, if a validator has self-stake of 1,000,000 XTZ, it can get up to 9,000,000 XTZ in delegations.

• A validator that has not proposed or voted on a block for 5 consecutive cycles will be considered inactive.

Resources

• Tezos developer documentation: https://tezos.gitlab.io/

• Tezos documentation: https://opentezos.com/

• Tezos explorer: https://tzstats.com/

• Tezos explorer: https://tzkt.io/

Update notes

2023-08-04: Tezos block time has been adjusted from 30 seconds to 15 seconds from the Mumbai upgrade on 2023-03-30.