Stake SafeCoin & earn Rewards
Proof of Stake (POS): Receive Interest by owning crypto
Owning a POS-Cryptocurrency like SafeCoin makes you a part of the network. Keep your Coins in your wallet and earn rewards by staking to a validator. Sounds complicated? Here is a short explanation why it isn't!
Staking in a nutshell
The SafeCoin Blockchain and it's transactions are running on computers within the network. Those computers are called validators. Those validators need SafeCoins as fuel to cast their votes in our blockchain. In return they get SafeCoins in reward. The amount of stake serves as gravity (stake weight) to a validator. The more stake a validator has, the more reward he gets. And with a certain amount of stake those rewards are higher than the costs. A vital network therefore has a high interest of holding SafeCoins and rewarding you for staking your own coins to a validator.
Decentralization, Commitment & Interest
By staking your Coins to a single or multiple Validators you are supporting a vital and SAFE decentralized network. With each new validator the SafeCoin blockchain grows stronger and more decentralized. Of course you can stake and unstake your Coins whenever you want. And don't worry: You never loose control over your Coins as staking means delegating, not giving away.
After a short waiting period – we call them epochs that last a little more than two days – your Coins are delegated to earn rewards or undelegated in case you want to trade them.
Passive Income and Deflation
The Anual Percentage Rate (APR) for delegated SafeCoins depends on the commission fee a validator charges his stakeholdes. In most cases it is up to 4-6%. But you will see validators in our network that charge a 100% fee and therefore are probably not interested in your stake. All the others are dedicated to provide the best possible performance to attract new stakeholders.
Now let's talk about deflation. SafeCoin has a maximum supply and there are no more new Coins popping up out of nowhere. The APR therefore is only valid for SAFE and can potentially be higher when changing to another currency.
FAQ Staking SafeCoin
What happens to my $SAFE if the validator I stake to ceases to operate?
Your coins are still in your staking wallet, so they don’t go anywhere. If the validator ceases to operate, you just stop getting rewards as long as your SAFE is staked to it. To start earning rewards You just unstake them initiating a ‘cool-down’ period, after the cool-down period has ended you can delegate them to a different validator. (Cool-down periods take 1 Epoch)
Are there any penalties for removing your stake, or is there a minimum amount of time you need to keep it staked?
No, there are no penalties or minimum timeframes for staking.
Are there any reasons not to stake?
When staking you will not be able to access your SAFE immediately. The warmup currently takes up to ~2.5 days or 1 epoch. The ‘cool-down’ period is until the current epoch ends from the time of initiation.
Why is there a validator fee (commission)?
A validator requires an outlay of money upfront. By paying out a portion of your share of the rewards, you are helping to keep the validator running and doing its job without taking on the costs and maintenance of running your own validator. It’s important to note that the validator fee comes out of the rewards only, NOT out of the coins you have delegated.
Can you give me an example of how the fee works?
Let’s say a validator has 10,000 total SAFE staked and you have delegated 5,000 of it. This means you have a 50% share in this validator. The person running the validator sets the commission fee to 10%.
Let’s imagine a validator received 200 SAFE in staking rewards. Since you have a 50% stake, you get a 50% share of the rewards (100 SAFE) minus the 10% commission (10 SAFE), so you end up with 90 SAFE. (200x.5x.90)
Do you get block rewards when staking?
You can only actively participate in the voting process if you run a validator. If you’re delegating SAFE, you are helping to improve the validator’s voting power, but you don’t receive any of the block rewards if the validator is chosen to receive one (this is one of the perks of running a validator - Block rewards only make up a very small percentage of a validators income.