Cudos Staking

To earn a yield on your CUDOS, you can either lend them out to custodial providers or via a Defi lending protocol, run your own Validator or delegate your tokens to validators of your choice.

We recommend using a Ledger Hardware Wallet to keep full control over your funds. To delegate your tokens, you should ensure you have your CUDOS on your Keplr wallet and follow the steps below:

Step 1: Go to the Cudos Staking Dashboard and connect your Ledger/Keplr wallet.

Step 2: Select a validator from the ‘Staking’ tab. If you are unsure which validator to delegate to, refer to our FAQ on choosing a validator for guidance.

Step 3: Once you have chosen a validator and decided on the number of tokens you would like to stake, click ‘Delegate’ and input your desired token amount. 

Step 4: Finalize by clicking submit and confirming the transaction in your wallet.

View our step-by-step staking Cudos staking tutorial here

• Firstly, delegating from one validator to another can be done without waiting for the unbonding period. You might consider redelegating if your current validator raises their commission rate or gets jailed for misbehaviour on-chain. Once redelegated, you have to wait for 21 days before you are able to redelegate again. 
• Secondly, rewards are not auto-compounded. To get the most out of your tokens, you should consider claiming and staking your rewards more frequently, but consider that each transaction will cost you some gas. By using our Cudos staking calculator.
• By delegating to a good long-term oriented validator, you can reduce most of your maintenance and only have to check back to restake your rewards.
• Lastly, as a participant in the Cudos Ecosystem, once you have staked your tokens, you can vote on Cudos Governance Proposals. While your contribution and vote are highly valuable to the ecosystem, participating does not affect the sum of your rewards.

It is essential for users to stake their PoS tokens with dependable and highly performant validators, which is why we have rolled out our Staking Rewards Verified Staking Provider (VSP) Program in June 2022. Through this program, we thoroughly scrutinize potential validators, evaluating factors such as security measures, their on-chain reliability, their provider setup, and value-added services for the whole ecosystem.

There are many metrics to consider when selecting a validator to delegate to:

Commission Rates: The commission rate a validator charges is the % of your reward that the validator keeps for themselves. A high commission rate means your rewards will be lower, whilst a low commission rate could mean that the validator is not profitable and could cause issues for them in the future. Keep in mind that validators can adjust their commission rates up or down over time. 

Number of Users: A high number of delegators could indicate positive sentiment towards a validator. 

Validators Self-Staked Balance: A provider with a high amount of staked tokens likely has more incentive to continue operating their services as they have more to lose than those with low self-staked balances. This metric has some limitations as Validators can choose to delegate to their own validator from another wallet, which is done to increase the security of their funds. 

Current Status: To check if a validator is currently active, go to the Validator Dashboard on Mintscan. The default view on this page is for “Active” validators, but you can also filter to view inactive validators in the top right corner of the page. Keep in mind that only the top 100 validators on Cudos, ranked by balance, receive rewards.

Network Share: You typically don’t want to choose a validator with the highest or a low network share. Delegating to the most popular validators increases centralisation risks within the network as those validators will have more say in governance and produce a larger share of the blocks. A validator with a low network share might not be profitable, increasing the risk of discontinuing their services. If a validator drops out of the top 100, they also stop earning rewards. However, if you are willing to put more time in, then delegating to a smaller validator helps support the decentralization of the network. You would just have to make sure to check regularly if the provider is still active and operating. 

Performance: Make sure you pick a validator with the highest possible performance. Further, please check individual validators’ uptime, and our recommendation is only to pick those with a >=99% uptime and a long history of not getting slashed. 

Value Add to the Ecosystem: Some providers offer extra services to their delegators, such as tax reporting tools or explorers. This can be another great way to filter for validators that are long-term invested in the Cudos Ecosystem. By delegating to a validator that is strongly dedicated to the Cudos Ecosystem, you are supporting their development which indirectly impacts the value of your CUDOS investment beyond the rewards from staking.

Staking rewards for CUDOS are composed of:

Block Rewards: Block rewards are equal to the sum of staking rewards and tx fees for a specific block. Rewards for a block are only distributed back to Validators and Delegators when the next block begins. The Block proposer receives a bonus between 3.67% and 5% of the Total Block Rewards depending on the number of validators signing that block.

Staking rewards: Staking rewards are additional rewards provided to Validators during the early and mid-stages of the network to support the growth of the Validator ecosystem. They comprise 10% of the total token supply.

You are welcome to play around with our CUDOS Staking Calculator to get a better feel of how these metrics can influence your rewards. 

We strive to make staking as safe and transparent as possible, however, it's important to consider factors that may influence whether a particular staking option is appropriate for you.

Slashing risk: CUDOS delegated to a validator can be partially slashed due to validator downtime, a double signing event or other bad behavior. On top of getting slashed, a validator can also be jailed, during which time you will not be earning any rewards. You can get slashed up to 5% for double signing events. Slashed tokens are sent to the community pool.

Unbonding risk: When staking CUDOS tokens, there is a lockup period of 21 days. This means that investors will not be able to sell their tokens immediately, but instead need to wait 21 days after initiating unbonding before they can be traded again. This is something to keep in mind when deciding to stake, as crypto markets are highly volatile. Consider keeping funds liquid if you do not intend to hold CUDOS long-term. 

Dropping out of the active set: A validator could drop out of the top 100 validators, meaning they no longer earn any rewards. Ensure you check back frequently to ensure your validator is active, not jailed and has not unreasonably raised their commission fees. 

Protocol security risks: There is an inherent risk that the protocol could contain unknown bugs, this risk applies not only to staking but also the investment in CUDOS.

Please note that this is not an exhaustive list of all the risks related to staking.

CUDOS is the native token of the Cudos ecosystem that is used to carry out the key functions of the platform as detailed below:

Token Utilities

• Gastoken: Each transaction processed by the network requires a small fee to be paid to the validator. 
• Governance: CUDOS is used to vote on Cudos governance proposals on the network. CUDOS holders (not just stakers) can propose and vote on governance proposals to change a subset of network parameters. The amount of voting power is measured in terms of stake.
• Staking: Users can temporarily lock CUDOS up to contribute to the security of the Cudos ecosystem.

Cudos Hub is powered by Tendermint BFT. Tendermint BFT is a Byzantine Fault Tolerant (BFT) consensus engine developed by Tendermint. It offers instant finality, is horizontally scalable and is secure against malicious actors. It is also open-source, meaning anyone can inspect and use the code. Additionally, it is simple to set up and use, allowing developers to quickly and easily build distributed applications. The active validator set consists of the 100 highest-ranked validators by staked tokens, from which 1 validator is randomly selected to propose a block with 66% of the remaining active validators being required to attest the block in order for it to become final. The higher the stake, the more likely they are to be selected. 

The CUDOS token has a maximum supply limit of 10 billion, with around 2.8 billion currently in circulation. Yet, not all circulating tokens are readily available for trading, as many are secured in staking contracts or allocated for reward purposes.

CUDOS tokens have a 10 year release plan until 100% of the total 10 billion have been fully vested and are in circulation.

• 25% released by January 2022
• 25% released by January 2023
• 25% released by January 2025
• 25% released by January 2031

Initial token distribution:

• 34% is allocated to Ecosystem and Community Development
• 33.78% is allocated to the Reserve
• 5% is allocated to advisors
• 2.22% is allocated to the private sale
• 1.67% is allocated to the public sale
• 3.33% is allocated to strategic investors