We've answered some of the most commonly asked questions for Staking from the community in this F.A.Q list below.
1. What is the APY shown based on?
The Annual Percentage Yield (APY) shown for Staking is an annualized rate.
It is computed before staking fees.
Every staking network has a different inflation rate and staked ratio, which directly impacts the APY.
Except for Kyber, all other staking APYs are not compounded automatically - users have to claim rewards and re-stake the crypto assets to compound rewards.
2. Why does the APY fluctuate?
The APY on each staking network is impacted by the following.
Inflation rate: usually trends towards a lower bound or upper bound depending on the staked ratio. The only exceptions being Terra and Kyber which does not have any inflation natively.
Staked ratio: the number of tokens staked vs. the total amount of tokens for the protocol.
Vote ratio: only applicable for Kyber, the amount of staked tokens that voted for the proposals.
Transaction fees: the amount of fees paid to the protocol when transactions take place. It is distributed pro-rata to all stakers.
3. What are the risks involved with staking?
With the exception of Kyber* staking, the main 2 types of risks associated with staking are:
Validator uptime risk: Stakes will be slashed by a small % (usually 0.01%) if your chosen validator misses more than 95% of any consecutive 10,000 blocks.
Malicious action by validator: For example, double signing a block, will result in a large % slash (usually 5%) on all stakes with the malicious validator.
This is why it is important to pick a time-tested, trustworthy validator such as Stakewith.us.
4. Why is there an unbonding period to unstake my assets?
Certain protocols have a lock-up period after assets are unbonded to prevent long-range attacks. During the unbonding period, you do not earn rewards on your assets and will still remain susceptible to slashing risks.
Depending on the network parameter, unbonding period ranges from 3 days to 28 days.
5. Is there any insurance cover for Staking on Unagii?
We have a 100% SLA on uptime slashing and loss of rewards due to validator downtime. We do not provide insurance for double signing.
6. What are the fees involved?
Stakewith.us charges different fees for each staking network due to the amount of resources required to maintain the node: