The BandChain Phase 0 (Wenchang) mainnet is officially launching on Wednesday, June 10 2:00PM UTC (21:00 Bangkok time) which will enable public token transactions and staking.
This is a guide on how to stake BAND after explaining some key terminologies and concepts behind staking on BandChain.
⛳️ Recap: BandChain is an independent blockchain built specifically for fulfilling cross-chain data oracle requests including settlement, sourcing and aggregation on a decentralized oracle network. Secured by Delegated Proof-of-Stake, staking enables validators to participate in consensus and data provision while being economically incentivized to uphold security and integrity of the system.
Once BandChain is live, anyone who holds BAND tokens will be able to stake or delegate on behalf of validators through supported wallets and our CosmoScan block explorer to earn block rewards.
Block rewards are distributed to validators and delegators as an economic incentive for securing the ecosystem through staking. With every block produced, BandChain will be generating BAND at a dynamic annual inflation rate ranging from 7%-20% dependent on the ratio of tokens staked in the entire ecosystem.
For example, the inflation rate will begin at approximately 13.5% and if the staking ratio is below 66% of the total supply, the rate will gradually increase toward 20% to incentivize more BAND tokens to be staked. On the other hand, if the staking ratio is higher than 66% the inflation rate will decrease towards 7% as the network is secured by more than two-thirds of the total BAND supply.
To fulfill data requests, validators are chosen randomly based on a stake-weighted algorithm which determines the probability of being selected by the network to propose and vote new blocks on BandChain.
Voting power is determined by the total amount of stake allocated independently by the validator and external delegators.
Delegated BAND will earn you rewards as more and more time passes. The dynamically increasing balance of rewards is independent of your primary BAND balance and not factored into your staked balance. Rewards must be claimed by delegators before being available for token transfers or further staking.
While you can leave your staking rewards to accumulate, we encourage delegators to withdraw rewards regularly and have a plan in place to ensure efficient allocation of capital. For instance, you can withdraw rewards on a timely basis and re-delegate them to validators to leverage compounded rewards.
There are no restrictions or time limits in place for the reward withdrawals.
Delegators are able to re-delegate BAND to another validator freely and begin earning rewards without being restricted by the 21-day unbonding period. This is instantaneous with no penalty and is designed to allow delegators who wish to switch validators based on any underlying reason.
An unbonding or lockup period is a safe-guard for long-range attacks where a malicious actor creates a new branch on the blockchain to overtake the main chain. This means that BAND delegated to a validator can be un-delegated but will be subject to a 21-day unbonding period where the balance is locked up and unable to earn rewards or be transferred until the period is over.
There are no restrictions or limits on the amount of BAND un-delegated. For example, if you have 100 BAND staked to a validator, you can un-delegate 20 BAND which will be locked up for 21 days while the remaining 80 BAND earn rewards and remain under delegation. Note that due to technical reasons, you can have a maximum of 7 pending unbonding token entries.
Staking BAND carries the risk of token slashing of both independent validator and externally delegated balances in the event of malicious activity or downtime. These penalties ensure full accountability of validators to secure the oracle network and maintain high-quality control standards.
In the Phase 0 Mainnet, there will be 2 main conditions where tokens are slashed:
- Double Signing (5%): Occurs when a validator signs two blocks at the same height on Chain A & Chain B. There will be a severe 5% penalty imposed on the validator and underlying delegated BAND tokens.
- Downtime (.01%): Occurs if validators have not been available in the last 30000 blocks. If slashed, validators are ‘jailed’ and unable to participate in signing any further blocks until a transaction is sent to BandChain to prove they are online and operational. We will slowly increase this penalty as our validator pool becomes more stable over time.
For this reason, we strongly encourage all delegators to perform due diligence before choosing a validator.
Staking on CosmoScan
Once BandChain is live, BAND token holders will be able to perform the above staking functionality via supported wallets and block explorers. This means that there will be support to stake BAND held on a Ledger hardware wallet using CosmoScan — our newly released public explorer compatible with the latest version of the Cosmos-SDK.
You can access the current CosmoScan with Wenchang testnet here: https://scan-wenchang-testnet2.bandchain.org/
Step-By-Step Guide to Stake on CosmoScan
Step 1 — Connect Ledger Wallet
BandChain supports the Cosmos app on Ledger wallets. To connect, you must click on the “connect” button on the top-right of CosmoScan and select the app you’re using on Ledger.
Follow the standard procedure of unlocking your Ledger, then keep the Cosmos app open and click “Connect to Ledger”.
ℹ️ Note: If you do not have a Ledger, you can test the staking feature by using “Test Account” as we work with our supported wallet partners to release a staking guide.
Step 2 — Send BAND Token to Your BandChain Account
Once the mainnet is live, you’ll be able to send BAND tokens from exchanges supporting the token swap or from other BandChain wallets.
In the testnet, you can simply request BAND from the faucet using the button under your displayed account address.
Step 3 — Choose Delegated Validator
On CosmoScan, click on the “Validators” tab on the top navigation bar. Here you can select any validator to view more in-depth stats including voting power, tokens staked, uptime and performance while also access delegation options.
Step 4 — Delegate BAND to Validator
Click on “Delegate” and specify the amount of BAND you wish to stake on behalf of this validator. Then you can confirm and broadcast your transaction which should take 3–5 seconds to go through.
Congratulations! You’ve successfully delegated your BAND tokens to secure the decentralized oracle network and can start earning block rewards
Step 5 — Withdraw Rewards
Click on “Withdraw Reward”, then confirm and broadcast your transaction. You should receive your reward in your BandChain wallet within 3–5 seconds!
✅ Pro Tip: You must delegate your rewards to your chosen validator if you wish to leverage compound rewards.
Step 6 — Undelegate
If you wish to withdraw your staked BAND or simply stop delegating for a validator you can use the “Undelegate” feature and specify the amount you wish to undelegate. Similarly, confirm and broadcast your transaction which should go through within 3–5 seconds.
ℹ️ Note: There is a 21-day unbonding period where any undelegated tokens will be locked up and the balance will be unable to earn rewards or be transferred until the period is over.
WIP — Redelegation
The redelegation functionality will not be initially supported on CosmoScan in the first release. The Band Protocol team is currently working on refining the UX interactions of switching validators and will be releasing functionality in the future iterations.
We Need Your Feedback
Staking is currently live on CosmoScan for Wenchang Testnet #2 which you can test and play around with here:
All feedback will be utilized to improve upon next iterations and upon BandChain launch, please submit through our Google Form:
With BAND staking to go live on June 10 alongside the mainnet launch of BandChain Phase 0, we’re excited to see the contribution of our community towards securing the decentralized oracle network by staking BAND. We will commence stage 2 of mainnet shortly after.
Stay tuned as we announce more supporting guides during this month of June and beyond.
About Band Protocol
Band Protocol is a cross-chain data oracle platform that aggregates and connects real-world data and APIs to smart contracts. Blockchains are great at immutable storage and deterministic, verifiable computations — however, they cannot securely access data available outside the blockchain networks. Band Protocol enables smart contract applications such as DeFi, prediction markets, and games to be built on-chain without relying on the single point of failure of a centralized oracle. Band Protocol is backed by a strong network of stakeholders including Sequoia Capital, one of the top venture capital firms in the world, and the leading cryptocurrency exchange, Binance.