TOMO Cheat Sheet #1 — Staking with TOMO
What does it mean “to stake”? According to the dictionary, some of the definitions are:
- To mark the limits of by or as if by stakes
- To fasten up or support (something, such as a plant with stakes)
As there are several meanings for “stake”, staking TOMO conveys a little bit of both definitions. Staking is marking off your property and showing your TOMO ownership. In this article, we will introduce a list of means and platform in which you can stake TOMO and generate profit.
So, how do I stake TOMO?
How you stake is entirely up to you, and there are a variety of ways to stake TOMO to generate profit.
A. Stake on Masternodes
Staking (also called Voting) TOMO is a vote of confidence in securing the TomoChain network by selecting and supporting the most credible Masternodes. Since, only the top 150 most voted on Masternodes can participate in the network, staking participation plays an important role in the function of the entire TomoChain Blockchain.
PoSV (Proof of Stake Voting) consensus enables staking activity within TomoChain system
TomoChain uses PoSV to ensure its system’s efficiency and security. PoSV is essentially a democratic system in which Masternode operators are elected. Voting power is determined by the amount of TOMO staked into each Masternode. Thus, Masternode Candidates are made to compete with each other to gain popularity with stakers and prove their competency as Masternode operators.
So why should I stake TOMO with TomoChain Masternodes?
Masternodes both create and validate new blocks on the blockchain, and for this, they are rewarded 40% of the new TOMO generated in the process. The second portion of 50% is shared among those who staked on that specific Masternode (The remaining 10% goes to a special account controlled by the Masternode Foundation). In the end, staking rewards participants in TOMO, whether as a Masternode owner or a staker.
Thus, staking will not only drive forth your own returns but also help stabilize TomoChain’s network.
1. Staking as Masternode Operators
A deposit of 50.000 TOMO is the initial requirement that allows you to become a Masternode Candidate. A Candidate becomes a Masternode when it is among the top 150 most voted Candidates in each epoch.
Running and operating one of the top 150 Masternodes generates high ROI, as the operator is rewarded with the largest share of newly generated TOMO, along with TOMO from transaction fees. This ROI is upwards of 30% annually. The key considerations of running a Masternode include the high initial investment, the regular operation/maintenance cost and a lockup period of 30 days after deciding to resign it.
2. Staking as stakers
2.1 Staking on Masternodes
2.1.1. Direct Staking
TomoWallet is the official mobile wallet of TomoChain that enables users to vote/unvote on Masternodes and track rewards effortlessly. Check out how to stake with TomoWallet via this tutorial.
So what Masternode should you vote for? The reward pool for every Masternode is equal. Each Masternode divides the rewards by the total amount of TOMO staked on it and then distributes them to all voters proportional to the amount staked. Hence, Masternodes with more TOMO staked provide lower rewards since the total reward pool is divided into more parts.
One response may be to vote for the Masternodes on the bottom of the top 150 to maximize rewards.
However, it’s not that simple. A Masternode at the bottom of the top 150 risks falling below rank 150 if it loses votes or a Masternode Candidate receives enough votes to reach the top 150. When a Masternode is dragged out of the top 150, it no longer receives rewards so staking rewards will also drop to 0. There is always a risk to reward ratio to consider.
Some important notes:
- In case you vote for a Masternode Candidate which is NOT a top 150 ranked Masternode and if it is not showing signs of gaining votes, you will need to unvote from it and wait for 96 epochs (48–50 hours) to be able to vote again.
- Voting for a lower-ranked Masternode will earn greater rewards but may require you to keep track of its position on a regular basis in case it happens to fall out of the top 150 position.
- Voting for a higher ranked Masternode will earn you fewer rewards but will most likely be safer in its ability to maintain a top 150 position.
2.1.1. Indirect Stakers
184.108.40.206. Via Staking services
You can stake your TOMO, or be part owner of a Masternode, through an agent or a small community.
TomoPool is a service that allows stakers to pool their funds together to launch a Masternode. Stakers earn a share of the Masternode infrastructure rewards so the ROI is typically higher than direct staking. Also, the minimum staking requirement is only 10 TOMO, as opposed to 100 TOMO when directly staking. Limitations to TomoPool include less decentralization since the servers running the Masternodes are governed by a single entity, having less voting power in the PoSV system as your vote is through a proxy, and a potential time delay for withdrawing your TOMO.
Pool-X is another staking option on KuCoin. The staked TOMO are locked for a period of (30/60/90) days and allows KuCoin to use the TOMO to stake on their Masternode(s) to ensure their masternode positions. The ROI is greater than some other staking methods, but the TOMO is locked in for an extended period of time with no options to withdraw until the contract expires.
220.127.116.11. Soft Staking.
Soft staking is done by depositing TOMO on certain crypto exchanges/wallets. Simply, it is part of the terms and conditions of the exchange/wallet, and by accepting those when signing up, you allow the exchange/wallet to manage your TOMO. This is somewhat similar to a staking service/pool staking as your TOMO will be managed by a third party. The ROI generated this way is generally lower compared to any other way of staking, however, your TOMO is liquid and can be traded on the platform or withdrawn at any time. Some platforms offering soft staking for TOMO include KuCoin, Hotbit, and Bitforex.
B. Staking on Dapps
You can stake your TOMO on some of the TomoChain Dapps, thus increasing your returns through its rewards pool in which users play and win. Profit is divided among those with a stake in the rewards pool.
For example, staking with MaxBet, a Dapp from PigFarm team, has proven to generate the most profit. The betting procedures are completely random and transactions of each win or loss are recorded. Unlike other ways of staking, your TOMO has no lock-in period and can be unstaked at any time.
Please note that the Staking on Dapps section provides a general overview of this method, and that each Dapp has its own terms and conditions.
In conclusion, staking $TOMO can generate passive returns regularly and with relatively low risk depending on the option chosen. Stakers have various choices with many forms of direct and indirect staking methods to help secure the TomoChain network and earn for participating.