Tezos Delegation Tutorial
Simple Staking Tutorial by Stake Capital
Welcome to this simple Tezos Delegation Tutorial. You will need:
- access to your Tezos address holding your Tezos token.
- 5 minutes of your time.
Introduction on Tezos and Staking
Tezos is a multi-purpose blockchain which supports smart contracts and offers a platform to build decentralised applications. Tezos includes on-chain governance, which allows upgrading of the protocol over time.
The network is secured by Delegated Proof-of-Stake: token holders can delegate their staking power to validators securing the network, and earn the fees generated minus the validator’s commission. These validators are called Bakers on Tezos.
Stake Capital has acquired and is now operating the Tezos Baker called HotStake, and has an impeccable track record, being currently ranked as the 2nd best in terms of Expected ROI. HotStake takes a market-leading 10% commission and returns 90% of the rewards to its delegators.
If you would like to know more the technical mechanics of Tezos and staking, we recommend this medium post.
Step 0: Withdraw your Tezos Tokens
If you currently store your XTZ on an exchange, you will first need to withdraw your tokens to your personal Tezos wallet.
There are several audited Tezos Wallet, such as Galleon and Tezbox.
This tutorial will use Tezbox, which you can download from their website at https://tezbox.com. You can learn more about Tezbox on their medium intro.
Step 1: Fund Your Tezos Wallet
Each Tezos account has a unique identifier that starts with TZ, and this is the address you use to receive your XTZ. In this example, our address is TX1P….. and holds 24 XTZ.
Step 2: Delegate to Stake Capital | HotStake
Now you will enter the details of our HotStake’s Baker address to start delegating your tokens to our baker.
Click on the Delegate tab, then:
- Under Delegate Options, choose Custom
- Under Delegate, enter our Baker’s address: tz1Z3KCf8CLGAYfvVWPEr562jDDyWkwNF7sT
Note that our Baker on Tezos is called HotStake, and can be found here - Click Update Delegate
Congratulations, your XTZ are now delegated to our validator and you will start earning your rewards!
UPDATE (Babylon Upgrade — October 18, 2019):
This tutorial has been updated to reflect all Babylon Upgrade changes. The use of KT staking address is no longer required to delegate XTZ tokens. Note however that if you delegated to HotStake prior to the Babylon Upgrade, no action is required — your existing KT staking address will continue to function as expected (see the FAQ section below for more information).
FAQ
How much can I earn from delegating my tokens?
The current yield on Tezos is 7.31%, but this rate does fluctuate with time. You can find the latest yield on StakingRewards.
We take a 10% operation fee, therefore delegators who delegate to our Baker will receive 90% of the generated rewards.
Are there any risks associated with bonding my tokens?
No, Tezos does not penalise delegators if the validators goes rogue. However, if a validator misbehaves, it will lose the right to participate on the network, and the delegator will also be affected as it will not earn rewards anymore. This is why it is important to delegate to a reliable Baker like HotStake.
Can I un-delegate my tokens?
You are free to move your delegated tokens anytime, there are no lock up periods with our delegation services. To un-delegate, log in to your Tezos wallet and send tokens to your desired destination.
When will I receive my first payout?
You will start accumulating rewards as soon as you delegate your tokens to our baker. However, to protect Tezos from attacks, rewards are paid with a 12 round delay.
For example, if you start delegating your token at round 100, you will earn your rewards from round 100 at round 112, then you will earn your reward from round 101 at round 113, and so on…
Note: If you decide to un-delegate your tokens, you will still receive all your unpaid rewards from us.
For example: let’s say you had bonded your XTZ with us from round 100, and decided to un-bond your XTZ at round 115.
When you un-bond, you would only have received your rewards from:
- round 100 (paid at 112)
- round 101 (paid at 113)
- round 102 (paid at 114)
- round 103 (paid at 115)
but we would still owe you the rewards from 104 to 115! These will be paid to your address with the same 12 round delay, and you would have received all owed rewards by round 127.
Can I continue to use my pre-Babylon KT address?
Yes, all pre-Babylon Upgrade KT staking addresses will continue to function as expected. Simply leave your funds as they currently are and you will continue to receive your XTZ rewards.
Can’t transfer XTZ from your software wallet?
Following the Babylon Upgrade a number of wallets require upgrade. Please ensure that all desktop or mobile wallet software is upgraded to the latest software version. Additionally, if you experience problems interfacing your Trezor with a software wallet, please ensure that you have installed the latest Trezor firmware update (November 6, 2019).
Can’t transfer XTZ even though all software is updated?
In order to send your XTZ from an old KT staking address to a new TZ address, the new TZ address much have a minimum of 0.002 TEZ in the balance to cover network fees.
