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Learn about Fantom Staking
There are several ways to earn a return on your FTM, including lending them out to custodial providers or through decentralized lending protocols, running your own validator, or delegating your tokens to validators of your choosing.
For the best security and control over your funds, we recommend using a Ledger Hardware Wallet . To delegate your tokens, you should ensure they are stored on your Ledger or Fantom wallet, and then follow these steps below:
Step 1: Go to the Fantom Wallet Staking Dashboard and select ‘Staking’ on the left panel.
Step 2: Click “Add Delegation” and select a validator from the table. If you are uncertain about how to choose a validator, refer to our FAQ for guidance on selecting a validator.
Step 3: Once you have chosen a validator and decided on the number of tokens you would like to stake, click ‘Continue’ and sign the transaction.
Step 4: Users have the option to lock their delegated Fantom up for up to 365 days. The longer you lock it, the higher your APR will be. Users can mint sFTM in a 1:1 ratio to your staked FTM and use it as a collateral in Fantom Finance, their all-in-one DeFi suite.
Once you have delegated your FTM, there are things you need to consider going forward.
- Firstly, keep in mind that rewards are not auto-compounded, so to maximize your returns, you may want to claim and stake your rewards more frequently. However, it’s important to consider that each transaction will incur gas fees, so you may want to use our Fantom Staking Calculator to determine the optimal re-staking frequency for your amount of FTM.
- As a participant in the Fantom ecosystem, you will have the opportunity to vote on Fantom Governance Proposals. While your contribution and vote are highly valuable to the ecosystem, it won’t affect your rewards.
- It is important to periodically check on the performance of the validator you have selected to ensure they are still performing well and have not fallen out of the active set.
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.
When choosing a validator to delegate to, there are numerous factors to take into account:
- Commission Rate: Fantom has set a fixed fee of 6% on staking rewards paid from stakers to validators for running their nodes. This means that the commission rate is the same for all validators and you do not need to compare this metric to other validators.
- Number of Users: A validator may be more popular or trusted if it has a higher number of delegators than others.
- 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.
- Current Status: When you are prompted to choose a validator from the Validator table, it will only show the active validators. You can do more investigation into whether your validator is active or not by clicking on the validator name in the Fantom Block Explorer.
- Network Share: You typically don’t want to choose a validator with the highest network share (Total Staked) or a validator with 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 a larger share of the blocks. A validator with a low network share, might not be profitable and hence increases the risk of them discontinuing their services.
- Performance: The total downtime of a specific validator can be seen on the Fantom Block Explorer. Make sure you pick a validator with the highest possible performance (Least downtime). Our recommendation is to pick only those that have downtime less than 100 seconds.
The Staking Rewards on FTM consist of both network rewards and fees:
- Inflation on the Fantom Network (Block Rewards): The Fantom network emits 6.18 FTM per second. The Block rewards are distributed after each epoch (1000 event blocks generated by the network since the previous epoch, or after 4 hours have elapsed since the previous epoch, whichever occurs first). Block rewards are distributed to validators and consequently shared amongst delegators. This implies that FTM holders who choose not to stake will get diluted over time.
- Transaction Fees: Each transaction processed by the network comes with transaction fees. 30% of transaction fees are burned. The remaining 70% of transaction fees are distributed between validators proportional to their transactions reward weight. The Staking APR will vary with network usage, as the network gets busier the APR will rise and vice versa.
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. The Fantom inflation rate was recently adjusted after a governance proposal on the network, learn more about it here.
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: When delegating to a validator, there is a risk of being partially slashed if the validator misbehaves.
Unbonding risk: When staking FTM tokens, there is a lockup period of 7 days. This means that investors will not be able to sell their tokens immediately, but instead need to wait 7 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 FTM long-term.
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 FTM.
Please note that this is not an exhaustive list of all the risks related to staking.
FTM is the native token of the Fantom network that is used to carry out the key functions of the platform as detailed below:
- Staking: Users can temporarily lock up FTM to contribute to the security of the network. In return for the service, both the nodes and the stakers are rewarded with epoch rewards and fees.
- Network Fees: FTM is used for network fees, such as transaction fees and fees to deploy smart contracts or to create new networks. Each transaction processed by the network requires a small fee to be paid to the validator, which gets shared with stakers.
- Governance: FTM is used to vote on governance proposals on the network. With governance, stakers can propose and vote for changes and improvements. FTM is the governance token required to participate in the voting process. The number of FTM a person or group has determined how much influence your vote will have on the outcome of a proposal.
The Fantom network utilizes a unique consensus algorithm called “Lachesis” to achieve consensus. Developed by the Fantom team, Lachesis is a directed acyclic graph (DAG) based algorithm that enables concurrent processing of transactions. It possesses several key properties:
- Asynchronous: Participants are able to process commands at different times.
- Leaderless: No participant holds a “special” role.
- Byzantine Fault-Tolerant: Able to function in the presence of up to one-third faulty or malicious nodes.
- Final: Lachesis’s output can be immediately used, with transactions confirmed within 1-2 seconds.
The platform is modular, and can be easily integrated into any blockchain with compatibility with other development tools such as the EVM or Cosmos SDK. The goal of Lachesis is to scale transaction throughput while maintaining instant finality and avoiding an increased risk of centralization.
The maximum supply of FTM is capped at 3,175,000,000, with an inflationary type emission rate since genesis. The supply of FTM is expected to be fully vested on 31 Dec 2025.
Initial token distribution
The Initial token distribution of FTM is as follows:
- 32.75% is allocated to Block Rewards
- 12.00% is allocated to Advisors/Contributors
- 6.00% is allocated to Strategic Reserve
- 1.57% is allocated to Public Sale
- 11.69% is allocated to Private Sale II
- 25.35% is allocated to Private Sale I
- 3.15% is allocated to Seed Sale
- $2.0M was raised in the Public Sale on Jun 2018, with an average price of $0.04
- $12.9M was raised in the Private Sale 2 on May 2018, with an average price of $0.035
- $24.8M was raised in the Private Sale 1 on May 2018, with an average price of $0.031
- $1.6M was raised in the Seed Round on Feb 2018, with an average price of $0.016