STAKING COURSE
ESSENTIALS ON STAKING
Learn all you need to know how to stake, earn passive income and build generational wealth. We will guide you through all the important bits and pieces so you can safely navigate.
Learn all you need to know how to stake, earn passive income and build generational wealth. We will guide you through all the important bits and pieces so you can safely navigate.
In this full staking course, you will learn all the essential bits and pieces that you need to know to safely navigate and begin your staking journey on the Fetch.ai network. It is important that you know the difference between APR and APY and what it means when a validator asks a certain commission rate. The more you know, the better your decisions will be. Alright, let's dive in and begin with the basics.
Safety first - how do we make sure your tokens are safe on our node? Our infrastucture is split up in two datacenters in Iceland. Each with redundant power and internet connections. The primary datacenter contains our main host servers, bare metal servers with powerful dual server CPU’s, 768Gb of memory and 18TB of flash storage. We have two of those monsters set up in an active / passive architecture. For those not into server lingo, this simply means if one server fails, the other one will take over and you won’t even notice any difference.
The secondary datacenter is set up as a failsafe, so that if the primary datacenter fails, the secondary datacenter can take over with only a few minutes of downtime. This setup is at the same level of operational security as enterprise companies use for their own infrastructure.
APR (Annual Percentage Rate):
This means that you restake/reinvest/compound only once a year.
APY (Annual Percentage Yield):
Means that you compound more frequently. Usually, when you see APY values, they are for daily compounding.
With an online calculator such as http://aprtoapy.com, we can see that the APY is naturally higher than the APR - because you reinvest your earned rewards more frequently so they also grow faster.The reasonable maximum compounding frequency is daily.
Lets say a validator's APY is 15% and they charge a 5% commission rate - that means that you get 95% of the staking rewards.
So you get: 14.25% APY
Quick calculation:
Validator gets: 0.75% (15 * 0.05 = 0.75%)
14.25% + 0.75% = 15%
*Commission is used for secure infrastructure*
Delegating means staking. You can use this to stake on a validator node of your choice to earn passive income. For safety, choose your validators according to their reputation, support and trustworthiness.Staking fees on the Fetch mainnet are literally zero.
Undelegating means unstaking. It's used to take your $FET off a validator node so you can use it for rent, food or just to enjoy a couple drinks. Keep in mind though, unstaking duration is 21 days. So once undelegated, you must wait 21 days until your FET are "free".
Redelegating lets you move your already staked $FET from one validator to another - instantaneously! There is no waiting time and zero fees. With this, you can help decentralise the network by staking with smaller/newer validators.
This is one of the sweetest parts of staking.You can claim your rewards as quickly as you earn them and they are immediately available (no unlocking period). You can then choose to spend them or reinvest/compound them so that your bag grows even faster.
If you know that you will delegate your rewards back into your current validator, you can just use the "Re-Invest" option in your Cosmostation wallet app and it does all the heavy lifting for you. Advantage: you do not first have to claim and then delegate.
Did you know that if you hold $FET - you have voting power? Yep, your FET gives you a right to vote upon important decisions to be made in the ecosystem. New proposals can been seen in the governance tab in your Cosmostation wallet.
If you e.g. hold 1000 FET - that is your voting power. Currently, there are around 210 million FET staked on the Fetch mainnet. This means 210m "voting power". The more tokens you have, the more votes you have.
The more FET get staked on the Fetch ecosystem, the scarcer the asset will become, because staking means that tokens are taken away from exchanges and thereby reduce circulating available supply. The number of staked FET on the mainnet is growing fast. 🗝️
If your validator misbehaves, their stake (and yours) is partially slashed. This can be from double signing or more commonly from downtime, which is undesirable.One solution: choose a validator that offers slashing protection, so you have zero risk
1. Buy $FET
2. Install Cosmostation wallet
3. Send FET to your new Cosmostation wallet address from either Binance, Gate.io or HitBTC (select Fetch network!)
4. Once arrived, choose your preferred validator
5. Enjoy passive income
Currently, only Binance, Gate.io and HitBTC allow sending $FET to mainnet for staking. So if you have your FET on e.g. Coinbase or CDC, you first need to send them to any of the three exchanges above before sending to mainnet.
Before sending to the mainnet from either Binance, Gate.io or HitBTC - make sure you choose the "Fetch Network" in the interface of your exchange where you also choose the number of tokens that you want to send. You can not use Ethereum or the Binance chain.You're moving your assets to Fetchs blockchain, remember.
The most important advice that we follow is to always send a small amount first, and see if it arrives safely.Once successful, you can send the entire bag with the same settings. This way, you make sure your funds are safely handled.
When sending your native FET tokens from the Cosmostation wallet back to a centralised exchange such as Binance, it is important to also add the Memo you receive in your Cosmostation app - because only this way, Binance can register and receive the tokens.
We recognise that choosing the right validators is very important so please feel free to ask any questions - we're here to help!
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