Ontology: Staking 101
What is staking?
Staking is the process of holding funds in a cryptocurrency wallet to support the operations of a blockchain network. Essentially, it consists of locking cryptocurrencies to receive rewards in return. Users lock digital assets in the form of ‘stake,’ delegate it to selected nodes that do all the upkeep work, and later get a share of the reward. It’s similar to a fixed deposit in the traditional banking system which rewards you with a defined interest at the end of the period, as stipulated in the contract.
*This article has been updated on November 27, 2020.
Ontology Staking
Ontology uses the VBFT consensus mechanism to secure its network. At any given time, there will be 15 nodes who have been voted in by the community to participate in consensus every block. Users vote for nodes by staking ONT tokens in multiples of 1 ONT per stake (previously 500 ONT). Users are free to stake ONT in any node, change their stake, or withdraw their stake back.
Staking is managed in terms of rounds, which are comprised of 60,000 blocks each (previously 120,000). Each block can range from 1 second to 30 seconds, which means each round can range from 16 hours to 20 days.
You can check how many blocks left till the next round here.
When a user stakes their ONT with a node, they are actually locking their ONT in a smart contract for one round to secure their vote. Any time a user would like to add or remove stakes for a node, they can submit a request to carry out that action only in the following round.
Find more about Ontology’s new staking economic model from here:
What are the benefits of staking?
Besides securing the Ontology network, staking ONT for a node is rewarded with ONG tokens. For every block that a consensus node processes, it will earn a portion of the ONG paid per transaction. At the end of each staking round, the node will distribute earned ONG to users who staked with the node.
The nodes can set an individual Fee Sharing Ratio, which is a percentage of the earned ONG to distribute to users. Currently, most of the nodes are contributing 80–100% of the rewards back to users who stake with them. The amount of ONG you receive from fee-sharing will be based on the amount of network traffic from transactions for each round.
Staking Rewards
There are two types of rewards you can get through staking:
- Regular ONG generation. The unreleased ONG rewards are now only shared amongst stakers, instead of both stakers and non-stakers.
- ONG network fees. Earn a share of all fee payments, including network transactions, storage fees, smart contract fees, etc.
Find out how much yields you will make by using our Node and Staking Yield Calculator: https://node.ont.io/calculator/node.
Where will I receive the staking rewards?
The 2 components [A] + [B] will be in the wallet Stake Authorization screen, which is the screen after selecting a node. You will need to click on “Redeem”.
Read more information:
- Everything you need to know about ONG
- Returns of Ontology (ONT) Staking — Part 1 here, written by a community member, @liquidsteel
How to Stake
First, check the Ontology Staking page. In order to stake, you will need at least 1 ONT.
ONT Staking wallets:
- ONTO mobile app staking guide here
- OWallet Stake Authorization Guide, video and FAQ
- O3 Wallet guide
- Cyano Wallet staking guide for Sesameseed node
- Ledger Nano S/X cold wallet staking guide here
If you can’t sign the transaction while staking authorization:
- Check that you’re not using a VPN
- Check that you have at least 0.05 usable ONG in that wallet address (cannot be in unbound or claimable mode)
- Ensure that the app you are using is updated to its latest version
Staking ONT on Exchanges
You can stake ONT by simply holding tokens in your exchange wallet on the following cryptocurrency exchanges:
Hold ONT tokens on these exchanges and start earning rewards right away.
Is the staking reward better through a wallet or on an exchange?
As mentioned above, the three rewards apply if you are staking with a node.
Exchanges are more convenient but usually only pay out monthly, whereas on wallets you can claim your ONG more frequently.
Which Node to Choose
The returns depend on the node. Not all nodes are equal. In general, you’d want to choose the node that has a higher Fee Sharing Ratio and a lower current total stake (Progress). The size of a node’s reward depends on the number of stakes placed on it. The more stakes, the lower the reward because it is divided between all the participants. Keep note that the number of participants is constantly changing because users react quickly and switch between nodes. For example, if a staker joins node X, the total number of participants increases and the return per participant decreases, incentivizing participants to leave the node, thereby reducing the return to its original value. Since this pattern is cyclical, it is not a drastic concern when choosing a node.
How to cancel staking and when will I get my stake back?
Rewards are given at the end of each consensus round.
If you cancel your stake, you will receive your reward at the end of the 2nd consensus round after you have canceled, you can track the progress of each consensus round here.
If the stake authorization is canceled at any time in round 2, then ONT will be unlocked at the beginning of round 3 (for candidate nodes) or at the beginning of round 4 (for consensus nodes).
How to Become a Validator
Read about Ontology Triones Node Incentive Model and requirements here.
Read about Triones Node Application here.
Useful Tools
These are tools useful for staking Ontology:
Are you a developer? Make sure you have joined our tech community on Discord. Also, take a look at the Developer Center on our website, there you can find developer tools, documentation, and more.
Find Ontology elsewhere
Ontology website / Ontology GitHub / ONTO website / OWallet (GitHub)
