ICX Staking FAQs (Frequently Asked Questions)
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 validate transactions. Users can delegate their cryptocurrency to teams that operate validating nodes. These validation nodes then use the cryptocurrency that is delegated to them to vote and validate transactions. In return, those who choose to stake are typically rewarded with cryptocurrency rewards at a specified percentage rate.
What is a P-Rep?
P-Rep is short for Public Representative on the ICON network. P Reps propose and vote on ICON policies, Governing the ICON network. Equally important, P-Reps also run nodes to validate transactions and produce blocks on the ICON network.
When does ICX staking start?
Staking on ICON Network takes place in 2 phases:
The first phase begins on August 26th. This phase consists of a pre-voting period, in which ICONists can stake their ICX through the ICONex wallet and vote for P-Rep candidates. During this period, a pool of ~3 million ICX will be released by ICON Foundation for pre-voting rewards (actual rewards are based on the percentage of the total supply of ICX that is staked).
The second phase begins a month later, on September 26th. This phase marks the decentralization of the ICON network as the top 22 P-Reps (in terms of votes) with taking their positions as block producing P-Reps. These P-Reps will be elected on-chain and will run ICON nodes and participate in ICON Governance. These top 22 P-Reps must have a minimum of 0.2% of the total supply of ICX in votes in order to be elected. If there are not 22 P-Reps who meet this criteria, then decentralization of the network will wait until this criteria is met.
What is the reward for staking?
Voters will receive annual rewards of 6% to 36%, depending on the total amount of ICX that is staked in the network. The less icon staked to the network, the greater the rate of reward, and vice versa. Staking rewards are paid in I-Score, which can be immediately converted from the Public Treasury to ICX.
(NOTE: EEP and DApp delegation processes are still in work and expected to go live in late 2019 or early 2020. Once these delegation processes are completed, ICONists will need to delegate to P-Reps, EEPs, and DApps in parallel to receive the full 6% to 36% rewards, as each category will provide 2% to 12% in annual rewards).
What is the estimated ROI for staking?
The estimated ROI is 15.7% annual return, based on a 30% delegation rate of the total supply (roughly 240M ICX). This is equivalent to about 50% of the circulating supply of ICX staked.
What is the minimum amount for staking?
No minimum amount for staking.
How long is my ICX locked while staking?
Your ICX is locked for a period of 5 to 20 days, variable depending on how much ICX is staked on the network. The higher the percentage of the network staked, the fewer the days you need to un-stake.
If I want to stake to another P-Rep team, how long do I have to wait?
You can change who you stake with at any time, even if your ICX is in the locked period.
What is the unstaking period?
Between 5 to 20 days, depending on % of ICON Network staked. The higher the % of ICON Network is staked the fewer days you need to wait to unstake.
If I will stake I will still have control to my ICX?
Yes, however, your ICX can incur a 6% burn penalty if the P-Rep you are staking with receives a penalty. These penalties are rare, but can happen if the P-Rep is not active and paying attention. P-Reps will incur this penalty if their total block production rate drops below 85%. This is an extreme case, but can occur if the P-Rep is malicious or negligent. Additionally, P-Reps can be penalized for disruptive and malicious behavior. Thus it is important to ensure you stake with P-Reps with good backgrounds.
Why should I stake?
1. You will receive rewards for staking.
2. You get to vote for P-Reps to govern the ICON network.
3. You support the ICON network through delegation of your ICX to P-Reps.
How can I stake?
You can use ICONex wallet (available via mobile iOS or Android, Chrome Extension, and also accessible through Ledger Nano S hardware wallet).
Are there any risks to staking?
Yes, if the P-Rep(s) you vote for incur a penalty, then the result is a 6% token burn. Penalties are rare, however, and if you vote for good P-Reps, then your ICX should be safe. Penalties are for block production rate dropping below 85% or malicious behavior by the P-Rep.
ICON’s penalty system has a token burning component. There are 3 types of penalties outlined in the IISS paper: Validation Penalty, Low Productivity Penalty, and Disqualification Penalty.
If a P-Rep suffers a Low Productivity Penalty or a Disqualification Penalty, 6% of the delegation toward such a P-Rep will be burned. This makes it extremely important for ICONists to delegate towards reliable and quality P-Reps.
Can I stake for multiple P-Reps?
Yes. We recommend voting / staking for multiple P-Reps in order to support multiple teams with different skillsets and in different regions. A diversified group of 22 P-Reps will help lead to longterm ICON success.
How can I mitigate ICON burn penalty risks?
We encourage ICONists to delegate across multiple P-Reps to diversify the risk of having their tokens burned. If staking equally with 10 P-Reps, then if one goes down, the penalty would be 6% on 10% of holding, resulting in a 0.6% total penalty.
Where can I find more info about P-Reps?
You can find the P-Reps candidates list here: https://icon.community/iconsensus/candidates/
Get in touch with P-Reps candidates to ask them questions and learn more about their teams here:
Why should I choose a specific P-Rep?
You can choose a specific P-Rep based on many reasons. You should choose the P-Reps you think will help ICON the most. Some reasons to vote for P-Reps can include: community involvement, using rewards to improve icon network / applications, involvement in ICON projects, node security and configuration, team makeup and team background, TestNet 1 & TestNet 2 Participation, and own stake size.
What’s happen if a P-Rep node you have chosen is down?
If the node you have chosen is down then you will not receive rewards during that time as that P-Rep will not be active and 6% of the delegation toward that node will be burned if the total downtime drops below 85% (over the total lifetime of the P-Rep node).
If you have any further questions please contact us: contact@ubik.capital or follow us on Twitter: @ubikcapital or on Telegram channel: ubikcapital