moonshot
Staking FAQ
01
What is staking? What is delegating?
The Terra blockchain is a Proof of Stake (PoS) chain. This means that the network is secured by validators that stake Luna. The Luna staked by each validator is a form of insurance that they will act properly. If they act maliciously by validating fraudulent transactions or double signing then the stake slashed 5%. If they have poor performance they will be slashed as well but by a much smaller amount (0.01%).
Validators propose blocks, vote on their validity, and add each new block to the chain in exchange for staking rewards from transaction fees.
Anyone can run a validator but maybe you don’t want to go through the effort or maybe don’t have the minimum stake required to be in the active set (top 130 validators by voting power). Instead you can delegate your Luna to an active validator and earn those same staking rewards.
Can a validator steal my funds?
Don’t just take my word for it – Reference Link
What risks are there?
Besides the basic risks for all of crypto and slashing as discussed in the ‘What is staking? What is delegating?’ section, the only other risk is your funds are locked. In order to access your Luna again, you must Undelegate and wait 21 days. During this period you do not accumulate staking rewards or airdrops.
How do I choose a validator?
It can be overwhelming but here are the top considerations:
- Uptime
- Uptime drives staking rewards and poor uptime can lead to slashing as discussed at the top of the page. Check validators here.
- Contact information
- Things happen but validators need to be able to answer to their delegators. Follow them on Twitter, enter their Discord or Telegram group. You want to know if they decide to unexpectedly shutdown in order to redelegate without missing any rewards.
- Network Decentralization
- With 130 active validators perfect decentralization would mean each would have no more than 0.77% voting power. Your stake contributes to the validators voting power. Voting power translates to increased influence in governance and with extreme concentration (1/3 the total voting power) the ability to halt the chain if a few validators collude.
Why do I pay a commission? How much is it?
moonshot charges a 5% commission. This covers time and resources to run a quality validator. Targeting super low or 0% commission validators can backfire if they have poor performance or they go under and you do not notice. This commission is only charged against your staking rewards. Assuming 10% staking rewards, by staking with moonshot at 5% commission you actually earn 9.5%. The staked Luna is untouched.
How do I delegate/stake my Luna?
Native Stake Step by Step
- In Chrome go to station.terra.money and click Connect Wallet. If not installed, install the Chrome extension.
- Set up a Terra wallet if you don’t have one already and transfer in funds.
- Go to Staking page
- Click the validator name
- Click Delegate
NOTE: if you are already staked with another validator click Redelegate to avoid the 21 day unbonding period. Redelegation is instant but will be locked to the new validator for 21 days before being able to be redelegated again.