IOTA Staking

Selecting the right validator can be challenging. Once the provider enters our Staking Rewards Verified Staking Provider (VSP) Program, you will be able to support your decision-making process. Through this program, we thoroughly evaluate factors such as security measures, on-chain reliability, provider setup, and value-added services for the whole ecosystem.

In addition, you can consider other metrics when selecting a provider to delegate to:

Commission: The commission rate represents the portion of your rewards that validators retain. A higher commission rate decreases your earnings, while a lower rate may affect the provider’s profitability and sustainability.

Network Share: Delegating to popular validators can raise centralization risks, while smaller providers may struggle with profitability. Supporting smaller providers helps decentralize the network but requires monitoring to ensure they stay active.

Number of Users: The number of delegators is a key factor in choosing a provider, as it affects rewards, network security, and reputation. Validators with more delegators contribute to stronger network security and are often seen as more trustworthy.

Voting Power: A validator's maximum voting power is 10%. If a validator accumulates more than 10% of the total stake, the validator's voting power remains fixed at 10%, and the remaining voting power is spread across the rest of the validator set. Therefore, it can be more profitable to delegate to validators with smaller voting power.

IOTA staking rewards are designed to incentivize network participation and ensure fair compensation for validators and stakers. These rewards come from various sources that collectively support the decentralized proof-of-stake (DPoS) mechanism and maintain network security and efficiency. Here are the primary sources of staking rewards:

Stake Subsidies: A fixed subsidy of 767,000 IOTA is distributed at the end of each epoch.

Transaction Fees: Validators earn fees from users for computation and storage deposits.

Validator Commissions: Validators receive a portion of pool rewards as a commission.

Exchange Rate Appreciation: Stakers earn rewards based on the appreciation of the validator pool's exchange rate.

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.

Blockchain and Technology Risks: IOTA and its underlying technology, smart contracts, are still developing, potentially containing bugs or vulnerabilities. As IOTA is an emerging protocol, unforeseen risks may arise, and the technology’s success is uncertain.

Slashing Risk: IOTA delegated to a validator can be partially slashed if the validator misbehaves. On top of getting slashed, a validator can also be jailed, during which time you will not be earning any rewards.

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

Key features include:

L1 Smart Contracts: Smart contract capabilities directly on the Layer 1 network using MoveVM.

Delegated Proof of Stake (dPoS): A fully decentralized network governed by validators and stakers.

Enhanced Tokenomics: Staking rewards, transaction fees with fee-burning, and storage deposits.

Improved Security and Performance: Resilient consensus mechanisms, fairer gas pricing, and dynamic validator selection.

The IOTA token is the native asset of the IOTA network, serving as a versatile and essential component of its ecosystem. It plays a key role in enabling network operations, facilitating governance, and supporting monetary and smart contract applications. Below are the primary use cases of the IOTA token:

Staking: Stake IOTA to participate in the network's proof-of-stake mechanism and earn rewards.

Gas Fees: Use IOTA to pay for gas fees required to execute and store transactions or other operations on the network.

Monetary Applications: Use IOTA as a unit of account, medium of exchange, or store of value while leveraging its interoperability and composability for smart contract applications.

Governance: Participate in on-chain voting for protocol upgrades and other network decisions, using IOTA tokens as governance rights.

Additionally, the IOTA tokenomics are designed to support scaling economic activities and incorporate storage deposits, reducing the amount of IOTA in circulation to create sustainable monetary dynamics.

The total supply of IOTA is 4,600,000,000. The new IOTA distribution is presented as follows:

• IOTA Holders: 55.23%
• IF, TEA, UAE: 31.08%
• Tangle Ecosystem Association: 12.00%
• UAE Foundation: 12.00%
• IOTA Foundation: 7.075%
• Contributors: 5.00%
• Unclaimed Tokens (Burn vs. DAO Vote): 3.83%
• IOTA Airdrop (Assembly Stakers): 3.50%
• Treasury DAO: 1.36%