ICON Staking: Impressive Growth in the First 6 Months and the Bright Future Ahead!
It has been nearly 6 months since ICON staking began on August 26th, 2019. The time has flown by and much progress has been made during this time. I want to thank the hard work and vision of the ICON team, the support and spirit of the ICON community, the motivation of the developers building on the ICON ecosystem, and the dedication of ICON P-Reps for this progress. We wrote an article about the launch of initial staking, as it was a monumental event. We now take a deeper look into the first 6 months of ICON staking, what has transpired (price growth and everything else!), and what a bright future we believe ICON has.
Disclaimer: This is not financial advice. Please do your own research. This article is based on publicly available information and assumptions where information is not available (e.g. future use of ICON network).
Before we dive in, we will first describe a few key aspects of staking, specifically in the context of ICON:
What is staking?
Staking is a mechanism by which a Proof-of-Stake (PoS) cryptocurrency holder locks their cryptocurrency for a period of time to aid in block generation and transaction validation. Delegated Proof-of-Stake (DPOS) expands upon PoS to introduce a system in which users can delegate their cryptocurrency to teams that operate validating nodes. These validation nodes then validate transactions and produce blocks. In return, those who choose to delegate to these nodes are typically rewarded with cryptocurrency rewards at a specified percentage rate.
Staking on the ICON Network:
ICON expanded upon DPoS to create a system called Delegated Proof-of-Contribution (DPoC). According to the ICON Yellow Paper, DPoC “is a decentralized and democratized incentive and governance protocol whereby token holders (ICONists) exercise their right to governance through delegating their stake to those that contribute directly to network growth. By delegating their stake, ICONists elect proven contributors to receive rewards from the network, while at the same time reaping rewards themselves by contributing through stake delegation.” Under this system, ICX holders delegate (vote) for teams called Public Representatives (P-Reps) to run the network. The rewards received by voters for delegating their stake range between 6–36% annually, based on the amount of ICX currently being staked on the network. The amount of ICX staked and reward rates can be seen on the ICON community webpage. As of Feb 10, 2020, the reward rate is 18.48% — quite impressive compared to traditional investments. Check out this article for an in-depth look at ICON’s reward system and the effects on inflation.
For those looking to learn how to stake, contribute to the ICON network, and start earning annual rewards, please see:
The First 6 Months of Staking!
Now that you have at least a basic understanding of staking on the ICON network, let’s take a look at some key accomplishments and growth areas in the first 6 months of staking:
ICX Price Growth:
Price of ICX has increased nearly 70% since staking commenced on Aug 26, 2019! (price according to CoinGecko). The combination of decreased selling supply (due to staked tokens being locked up and not for sale), the increased social, media, and investor attention on ICON (through the hard work of the ICON team, the ICON community, and ICON P-Reps aka the ICON Family), and the technical progress of the ICON ecosystem (thank you ICON Family!) have resulted in growth in the price of ICX. ICON is now back in the Top-40 of cryptocurrency tokens and we hope and expect further growth with the bright future ahead for ICON.
Delegated ICX Growth:
Staking started off with a bang! Only after half the day, there was a total of 52,282,054 ICX being delegated (voted) on the ICON network. That number has steadily increased and is currently at 203,841,797 ICX voted (as of Feb 10, 2020), representing 24.85% of total supply of ICX (or 39.13% of circulating supply, since roughly 300M ICX is not in circulation). This is quite impressive, given only 6 months of staking. P-Rep team Block-42 made a useful staking calculator that calculates the reward rates for not only staking, but also staking, collecting rewards, and then re-staking on a regular basis (for compounding interest). An example of the rates of rewards for 10,000 ICX staked (with compounding interest) are shown below:
P-Rep Team Growth:
On Aug 26, 2019, we had 33 P-Rep teams registered. This number has grown to nearly 100 (98 at the time of this writing). The top 100 P-Reps receive rewards based on the amount of votes they recieve. For this reason, once the number of P-Reps increases beyond 100, there will be competition to stay in the top 100 and continue to earn rewards. The current teams, vote allocation, and proposals can be found on the ICON community webpage. The current P-Reps span Asia, Africa, North America, South America, Europe, and Australia.
There have been 4 Approved network proposals. While the magnitude of this number is low, the collaboration required to come to consensus across different timezones, language barriers, cultures, and beliefs cannot be understated! This is decentralized Governance in action. We expect more proposals to be presented in the future. Network proposals are discussed on the ICON forum before on-chain submission for voting. Of note is the looming changes to the incentive system.
ICON Decentralized Applications (DApps) have increased in usage, with over 100,000 daily transactions on a consistent basis. ICONBet, Somesing, and Stayge are leading the charge, with more promising DApps being developed and launching in the future!
ICON launched a grant system to help fund promising projects for expansion of the ICON ecosystem. Grants can be seen on the ICON forum webpage, under the “Grants” category. In the short few months since launch, several grants have been proposed with multiple awards (some in the hundreds of thousands of ICX). These are serious proposals and serious projects that will grow ICON. Later this year there will be an on-chain voting for these types of projects under ICON Ecosystem Expansion Project (EEP), as described in the Yellow Paper.
Under DPoC, voters should vote for P-Reps who they believe align with their goals and will help grow the ICON ecosystem. Many P-Reps are doing just that! Even before elections began, many teams were contributing in the areas of content creation, software development, community engagement, network testing, and more! Since elections began, more teams are joining, and resources are being earned, the amount of contribution has continued to increase. We expect this trend to continue and look forward to projects such as the developer-focused portal ICON Core, an elegant community wallet, MetrICX staking tracking app, Drone blockchain integration, ICONWat.ch useful ICX tools, high-end videos, continued DApp growth, automated software tools for launching nodes, and more!
But that’s not all!
Last, but certainly not least, I want to remind everyone that ICON is still working extremely hard and putting significant resources into development and growth of the ICON ecosystem. We would not be here without the ICON team and I want to extend my personal gratitude for the countless hours their team has worked to make this a success before many of us were even a part of the ecosystem. There are some major milestones on the horizon, such as the commercialization of Blockchain Transmission Protocol (BTP) enabling interoperability between heterogenous chains, the growth and expansion of MyID Alliance, S-Coin launching in Seoul, and more!
Looking back at the past 6 months, I am nothing short of blown away and impressed by the accomplishments of the ICON Family. There is so much more I could say about the great things that have happened, and even more which is ahead. I look forward to the next 6 months and future beyond. Hopefully you will be a part of this journey!
Disclaimer: Not financial advice. Cryptocurrency and blockchain investments are high risk, can incur substantial losses, and are not suitable for everyone. Please consult a professional before considering investment in any cryptocurrency. This article does not encourage or support any specific investments, use of applications or technology, or financial direction. Opinions are my own. This article is for informational purposes only and should be verified and validated externally for 100% accuracy.