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Learn about DeFiChain Staking
How to stake DFI
There are several ways to earn a return on your DFI, including lending them out to custodial providers or through decentralized lending protocols.
For the best security and control over your funds, we recommend a compatible hardware wallet. To delegate your tokens, you should ensure they are stored on your hardware wallet or DeFi Wallet, and then follow these steps:
Step 1: Create an account on CakeDefi.
Step 2: Go to the CakeDefi Staking Portal and click the ‘Stake’ button on the DFI block.
Step 3: Click ‘Continue’ and input how many tokens you want to stake, then click ‘STAKE’.
Do I need to maintain my staking in any way?
Once you have delegated your DFI, there are things you need to consider going forward.
- Firstly, 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 fees. By using our DeFiChain staking calculator, you can calculate the optimal re-stake frequency for your amount of DFI.
- Lastly, as a participant in the DefiChain Ecosystem, once you have staked your tokens in the freezer, you can vote on DeFiChain Governance Proposals. Participating in the on-chain governance voting process on DeFiChain not only allows customers to have a say in the future direction of the blockchain, but also provides an opportunity to earn rewards. These rewards come in the form of DFI, the native token of DeFiChain, and are paid out to voters from fees that are contributed by proposers. Voters will be rewarded with DFI from fees that proposers submit when submitting a proposal. 50% of those fees go to voters. The fees are as follows: For special DFIPs: 5,000 DFI, for DFIP: 50 DFI per proposal, for CFP: either 1% of requested amount or 10 DFI (whichever is larger).
How are the staking rewards generated?
Native staking rewards for DFI are composed of:
Inflation on the DeFiChain(Block Rewards): Block rewards are paid out at a decreasing rate each year. This is similar to how bitcoin reduces its block reward every halving event.
- 1st year: 200 DFI Block Reward
- 2nd year: 150 DFI Block Reward
- 3rd year: 100 DFI Block Reward
- 4th year: 70 DFI Block Reward
- 5th year: 50 DFI Block Reward
- 11th year: 0 DFI Block Reward
This implies that DFI holders who choose not to stake will get diluted over time.
Please note that the total annual rewards are divided by all active stakers; hence, as the amount of staked tokens goes up, the reward rate goes down.
You are welcome to play around with our DefiChain Staking Calculator to get a better feel of how these metrics can influence your rewards.
What are the risks to staking DeFiChain?
Whilst we want to ensure staking is as safe and transparent as possible, there are still things to consider regarding whether a specific staking option is right for you.
Slashing risk: There is no slashing risk on DeFiChain.
Unbonding risk: There is no unbonding risk when staking DFI given that there is no lockup period.
Protocol security risks: There is an inherent risk that the protocol could contain unknown bugs. This not only applies to staking but your DFI investment in general.
Please note that this is not an exhaustive list of all the risks related to staking.
What is DeFiChain?
DFI is the native token of the DeFiChain that is used to carry out the key functions of the platform as detailed below:
- Staking: Users can temporarily lock DFI up to contribute to the security of the DFI network.
- Gas token: Each transaction processed by the network requires a small fee to be paid in DFI. DeFiChain has a programmatic burn function whereby fees from transaction activities are burnt automatically.
- Governance: DFI is used to vote on governance proposals on the network. Only staked tokens are eligible to be used for governance voting. The amount of voting power is measured in terms of stake.
What consensus algorithm does DeFiChain use?
DeFiChain leverages the best aspects of PoW, that is, using hashing of the staking node’s ID for block creation while focusing the majority of the consensus on PoS.
DeFiChain utilizes a Proof-of-Stake (PoS) algorithm similar to Bitcoin Core’s original Proof-of-Work (PoW) mining algorithm. While DeFiChain is choosing PoS over PoW, at the same time, DeFi technology retains the best of the tested and proven technologies that were developed in the Bitcoin Core blockchain.
To run a masternode (staking node), stakers must hold a fixed amount of 20,000 DFI. Masternodes on DeFiChain participate in active transaction validations and block creations. The staking amount is intended to be lowered with the stability and maturity of blockchain to encourage further decentralization. Each staking node can perform only 1 hash per second, with the nonce from Bitcoin Core PoW algorithm replaced by a staker’s masternode ID
What's the initial token distribution of DeFiChain?
There was no ICO or IEO.
DFI tokens were listed on exchanges for sale by the Foundation.
There were airdrops to the community in May 2020.
A further airdrop to BTC holders is planned for Q3 2020.
What are the tokenomics of DeFiChain?
DFI has a total supply of 1.2B tokens, 318,543,782 DFI has been burnt and taken out of circulation.
Initial token distribution
It is unclear how the initial token distribution was done. Please view the currentl breakdown of the DFI distribution here.
DeFiChain did not participate in an ICO or IEO and DeFiChain did not conduct any sales rounds.
From the Staking Rewards Journal