Protect your individual sovereignty
With all of the new stakeholders entering the Decred ecosystem, a common question that’s asked is “How do I stake my DCR?”
Staking is the way that, as a stakeholder, I can protect my own sovereignty, vote on Politeia proposals, vote on consensus changes, and even earn a reward for doing so. Of course, I want to stake.
Luckily, participating in Decred’s Proof of Stake system is quite simple. This post will teach you how to set up the Decrediton wallet, how to create an account with a staking provider of your choice, and how to purchase and vote with PoS tickets.
For some context, Decred’s PoS and governance systems are based on the concept of tickets, which you must own if you want to participate. To obtain a ticket, holders must time lock a certain number of DCR in a multisig address, preventing them from spending those funds until their ticket participates in PoS.
Tickets are selected to vote on whether or not to approve a miner’s work. A block is added to the chain if 3 of the 5 selected tickets vote in its favor. For their help in appending blocks to the Decred blockchain, ticket holders are rewarded with a portion of the block reward. Thirty percent of the block reward goes to Proof of Stake participants, which currently stands at 1.03 DCR per voting ticket as of August of 2019.
Decred uses a lottery system to select tickets so the process is somewhat random, you never know when your ticket is going to get called. On average, it takes 28 days for a ticket to get called in, but it could also be called in just one day, or it could completely expire if it’s not called within 142 days.
The price you pay for a ticket fluctuates with the demand for tickets. With more tickets purchased, the prices increases. With fewer tickets purchased, the price decreases. This mechanism ensures that the entire ticket pool stays close to 40,960 tickets. To read more about Decred’s ticket pricing algorithm, check out their developer documentation.
Signing up with a Stakepool
When staking, you have two options: solo voting or using a voting service provider (VSP).
Solo voting involves running your own wallet that’s always online, whereas using a VSP allows you to delegate the voting of your tickets to a machine that’s always online. You retain sovereignty of the vote, but rely on a VSP to relay your votes. This post will focus on using a VSP as it’s the easiest and most reliable way for newcomers to begin staking.
Every verified VSP can be found here. You’re able to compare each staking pool across proportion of total pool, total voted, total missed, and fees to figure out which one you want to use. Stakepools are interchangeable so it’s just generally advised not to concentrate ownership in one pool.
Once you’ve selected a VSP, you need to create an account. There should be a sign up on the landing page after you click into your VSP of choice. Signing up is easy, you simply provide a name, email, and password. The sign up screen should look something like the screenshot below 👇
After completing the sign up flow, you’ll want to go to the settings tab and get your API token. It will look something like the screen below 👇
Now, open up Decrediton and go to the “Tickets” tab. Select your chosen stakepool from the drop down menu, enter your API token in the “API Key” section, and click “Continue.”
Once confirmed, you should see the screen below 👇
Now you’re able to buy tickets!
Just select the amount you want to buy, click the “Purchase” button, and enter your password.
You’ll have to wait for the transaction to mine, which happens within one block, or five minutes. Once the transaction is mined, the ticket will be in an “Immature” state, which means the ticket can’t yet vote. It will remain in this state for a total of 256 blocks (20 hours).
After that time period is up, your ticket is ready to vote!
Not only does Decrediton allow you to purchase tickets and participate in block approval, it also allows you to use your tickets for voting in on-chain governance.
Remember, Decred’s on-chain governance system is broken up into consensus rule changes and Polietia proposals.
To find all of this information, click on the “Governance” tab in the menu bar. From there, you’ll be able to toggle between “Proposals” and “Consensus Changes.”
Within “Proposals” you’ll see them broken up into their various states: “Under Discussion,” “Under Votes,” “Finished Voting,” and “Abandoned.”
After reading through the current proposals under discussion, you can vote on current proposals by clicking into the “Under Votes” section.
To cast your vote, click into the specific proposal and select either “Yes” or “No.” Decrediton will prompt you to enter your password so it can verify the transaction.
Participating in Decred’s Proof of Stake and Governance system is quite easy thanks to Decrediton. All you need to do is download the wallet, create an account with a stakepool, and you’re ready to go!
If you’re comfortable with CLI tools, you can program all of this yourself without using Decrediton. You can find all of the necessary instructions for that here.
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