Staking allows you to delegate your NIM to a validator, helping secure the network while earning rewards. Whether you’re new to staking or looking for details about validators, rewards, or the Proof-of-Stake protocol, this FAQ covers everything you need to know. Explore topics such as unstaking periods, selecting a staking pool, and contributing to decentralization.
General Staking Information
What is Staking?
Staking is the process of delegating tokens to a validator. The validator then uses these tokens to validate transactions and produce blocks on your behalf.
What is a validator?
A validator is the block producer of Proof-of-Stake blockchains, like a miner in Proof-of-Work blockchains. Validators produce blocks according to a consensus algorithm.
What is a staking pool?
While a validator is an individual entity, a staking pool combines the tokens of multiple participants into a single large entity, increasing their collective stake and chances of winning rewards.
How does staking help the Nimiq network?
Staking helps keep the Nimiq network secure and decentralized. The more NIM is staked and distributed evenly across validators, the stronger and healthier the network becomes, ensuring its reliability.
What happens if I don’t stake?
You can choose not to stake and not earn any rewards. By not staking, you miss the opportunity to help maintain the network secure and decentralized.
How long does it take to have my funds available after I un-stake?
Once you un-stake your funds, it usually takes between 12 hours to 4 days for them to become available. The exact time frame depends on your validator’s status. In rare cases, validators can be “jailed” for up to 4 days, which may delay access to your funds.
Rewards
How much can I earn by staking?
The amount of NIM you will receive depends on multiple factors, such as the amount of NIM you have delegated to your validator or staking pool and the time you have been staking. You can use our Staking Calculator to estimate the potential rewards you can earn.
How do staking rewards work?
When you delegate your NIM, your validator uses it to help secure the network. In return, it earns rewards, which are shared with its stakers. You don’t need any technical knowledge to start staking.
How long does it take to start earning rewards after staking?
The periodicity of reward distribution depends on your validator policies. These rewards are paid off-chain. Check your validator to understand the specific distribution schedules and earnings.
Can I re-stake my rewards?
Yes. If you are staking to a validator, you can manually re-stake your rewards. If you are staking with a staking pool, you can automatically set to re-stake once you earn rewards.
I haven’t received my rewards in a while; what can I do?
If you haven’t received your rewards when you were supposed to, you can contact your validator or staking pool. According to the Nimiq PoS protocol, validators who get jailed get their funds locked for a 4 day period, which may coincide with the day of the reward distribution.
Staking Pool Selection
How do I pick a Staking Pool?
When selecting a Staking Pool, consider the following factors to make an informed decision:
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Pool Fee: Pools charge a fee for maintaining and operating the validator infrastructure. Compare the fees of different pools to find one that aligns with your preferences.
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Decentralization: A well-distributed stake ensures a healthy and secure Proof of Stake network. Each pool is assigned a score, indicating how staking with them contributes to the overall balance of the network.
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Pool-Specific Features: Explore the unique features offered by each pool. Some pools may provide benefits like automatic re-staking, dynamic fees, or additional services. Check their websites or connect with their community on Nimiq’s Discord to learn more.
Can I switch the Staking Pool / Validator to which I have staked my NIM?
Yes, you can change the Staking Pool or Validator to which you’ve staked your NIM at any time. To do this, you’ll need to unstake your NIM from the current validator and then stake it with a new one. Please note that there is an unstaking period before your NIM becomes available again for staking with a different validator. This process involves two transactions: one to signal that you no longer want to stake and a second one to retrieve your funds once they are unstaked, which happens after the next macro block, a maximum of twelve hours later.
Can I stake to multiple validators?
You can only stake with one validator per wallet address. To stake with multiple validators, you’ll need to create additional wallet addresses. Simply create a new wallet, transfer funds to it, and stake with your chosen validator under that new wallet address.
What happens if the validator I’m staking with goes offline?
If the validator you’re staking with goes offline, it will be deactivated and will not receive rewards during its inactivity. As a staker, this means you won’t earn rewards from that validator while it’s offline. However, you retain full control over your NIM and can choose to unstake and delegate to a different validator at any time. Keep in mind that unstaking involves a lock-up period before your funds become available for redelegation.
Staking Requirements
What is the minimum amount required to stake?
To participate in staking Nimiq (NIM), a minimum of 100 NIM is required.
I want to increase the amount I’m staking. Can I do that?
You can always increase or decrease the amount of stake you have delegated to your validator; however, you must keep at least the minimum deposit at all times.
Do I need to have a Nimiq Wallet?
The Nimiq Wallet provides an easy, intuitive, and fully self-custodial staking experience. While third-party wallets may support NIM staking in the future, currently, the Nimiq Wallet is the primary platform for staking your NIM.
Which wallets support staking?
Currently, the Nimiq Wallet is the primary platform supporting NIM staking. It offers an intuitive, self-custodial experience, allowing you to stake your NIM directly. While third-party wallets may support NIM staking in the future, currently, the Nimiq Wallet is the main option for staking.
Can I stake directly from an exchange?
Currently, exchanges that support NIM do not offer direct staking functionality. However, they are participating in the migration to Proof-of-Stake, which lays the groundwork for potential future support.
Proof of Stake Protocol
How does the Nimiq Proof of Stake protocol ensure that all validators follow the rules?
There is a system of rewards and punishments for validators. Validators are rewarded for validating transactions and producing blocks according to the consensus protocol, incentivizing good behavior. If a validator fails to follow the rules, they may face a punishment such as losing rewards or being temporarily “jailed” for up to 4 days, during which they cannot participate or earn rewards. This combination of rewards and punishments motivates validators to follow the rules. If you would like to learn more about validators, rewards, and punishments, you can refer to the protocol documentation.
Can I lose my funds when staking?
You cannot lose your skated funds in Nimiq under normal circumstances, as they remain under your ownership. However, if your validator misbehaves or performs poorly, it may lose rewards or be jailed temporarily, impacting your earnings but not your staked funds.
Miscellaneous
Is staking taxable?
The tax treatment of crypto staking rewards depends on your local regulations. We recommend consulting a local tax professional and reviewing the crypto tax guidelines in your jurisdiction to ensure compliance.
Please note: Depositing and withdrawing your cryptocurrency from a staking pool is typically not considered a taxable event, similar to other wallet-to-wallet transfers. However, it is still important to confirm this with your local crypto tax guidelines.
Another great way to find answers is by asking the Nimiq community. Try Telegram for general questions and Discord for tech-related inquiries.
Do I have to pay fees for staking?
Staking with Nimiq is simple and cost-effective, with no fees for staking directly through Nimiq. However, you must select a third-party validator to stake with. Validators run staking pools that secure the network, similar to miners in a Proof of Work blockchain, and charge a small fee for their services, which varies by validator. Most validators provide details about their fees and services on their website or staking pool information page.
Be sure to review these details and the terms of the staking provider before staking.