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Learn about Kava Staking
There are several ways to earn a return on your KAVA, 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.
To delegate your tokens, you should ensure they are stored on Keplr Wallet, and then follow these steps below:
Step 1: Go to Keplr Wallet, choose KAVA and ensure you have tokens there.
Step 2: Click the “Stake” button at the bottom of the page.
Step 3: You will now see the Keplr Dashboard with a list of validators. Check our FAQ on how to choose a validator if you are unsure who to delegate to. Once you have chosen the validator, click on “Manage” on the right-hand side of the validator information bar.
Step 4: You will need to input the amount of KAVA tokens you would like to stake. After that, click “Delegate” and sign the transaction in your wallet.
After delegating your KAVA tokens, there are a few things to keep in mind:
- Delegating from one validator to another is available after a 21-day 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.
- 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 Staking Calculator to determine the optimal re-staking frequency for your amount of KAVA. Alternatively, you can use tools like restake.app to choose a validator that will auto-compound your rewards for you.
- As a participant in the Kava ecosystem, you can vote on Governance Proposals. While your contribution and vote are highly valuable to the ecosystem, it won’t affect 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.
Our VSP documentation contains further details about the program, Staking Providers that are part of the VSP will have a blue checkmark displayed next to their names here. If you want to know which validators on Kava are part of the VSP, simply go to Kava’s validator page on Minstcan and click on a validator’s name. If that validator is a VSP, it will have the Staking Rewards logo shown under ‘Additional information’.
When choosing a validator to delegate to, there are numerous factors to take into account:
Commission Rates: When staking your tokens with a validator, the commission rate represents the percentage of your rewards that the validator will retain for themselves. A high commission rate can result in lower returns for you, while a low commission rate may lead to financial difficulties for the validator in the future. It’s important to note that validators may change their commission rates at any time.
Number of Users: A large number of delegators may signal a positive reputation for a validator.
Validators Self-Staked balance: Validators with significant amounts of self-staked tokens may have a greater motivation to maintain their operations, as they have more at risk than those with lower self-staked balances. However, it’s important to keep in mind that this metric has some limitations, as validators can choose to delegate their own tokens to another validator, which is done to enhance the security of their funds.
Current Status: You can see whether the validator is currently active or not by checking the validator list shown on this page. Validators that are active have a green dot under them.
Voting Power: When selecting a validator to delegate to, it’s generally advisable to avoid choosing one with the highest or lowest voting power. Delegating to the most popular validators can increase the risk of centralization within the network as they will have more influence in governance and a greater share of blocks. On the other hand, choosing a validator with a low voting power may be less profitable and increases the risk of them ceasing their operations. Finding the balance and choosing a validator with a moderate voting power could be the best approach to keep the balance in decentralization and profitability.
Performance: Make sure you pick a validator with the highest possible uptime performance by viewing the validator information. Our recommendation is to only pick those with a >=99% uptime and a long history of not getting slashed.
Value Add to the Ecosystem: Another way to assess the long-term vision of validators is to check if they offer additional services to their delegators, such as tax reporting tools, explorers, etc. This can be a useful filter when comparing different providers.
A validator is randomly selected from every block to create a new block, with one staked or delegated token counting as one “lottery ticket”. This selected validator has the right to create and broadcast the new block to the network and will receive the block reward and all fees.
Native staking rewards for KAVA are composed of:
Block Rewards: Total block rewards depend on the reward per block and block time. The proposed inflation is 7% but the actual inflation will rely on the average block time and actual block reward.
Transaction Fees: Each transaction processed on the network comes with transaction fees. The network collects transaction fees and distributes them to each validator proportional to their stake. The Staking APR will vary with network usage. Currently, transaction fees collected on the Kava network are minimal.
It’s important to keep in mind that the total annual rewards are divided among all active stakers. As the number of staked tokens increases, the reward rate decreases. Furthermore, there are governance proposals that could adjust some of the on-chain parameters, which could also change the APR if they are approved.
You’re welcome to use our Staking Calculator to get a better understanding of how these factors can impact 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: Delegators can lose their KAVA delegated to a validator via slashing if the validator misbehaves. The two types of misbehavior are liveness (going offline for too long) and double signing (equivocating about the state of the blockchain). Liveness has a penalty of 0.05% which is relatively small. Double signing has a penalty of 5.0% which is considerably larger. This means you can lose up to 5% of your staked KAVA, but this occurs under a rare scenario.
- Unbonding risk: Unstaking KAVA requires a 21-day waiting period before the tokens become liquid again. Investors should be aware of this lockup period before deciding to stake and consider keeping funds liquid if they do not plan to hold KAVA long-term.
- Dropping out of the active set: The risk of a validator getting slashed or dropping out of the top 100 could result in a loss of rewards. It is important to check frequently on the status of the validator to ensure it is active, not jailed and hasn’t raised the 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 KAVA.
This list is not exhaustive and other risks may apply.
KAVA is the native token of the Kava network and it is used to perform various important functions within the network:
- Staking: Users can temporarily lock up KAva to contribute to the security of the Kava network. The top 100 validator nodes validate blocks by a weighted bonded stake in KAVA tokens. Economic incentives for validators come in the form of earning KAVA as block rewards and as a portion of the network’s transaction fees.
- Gas token: Every transaction on the network incurs a small fee that is paid to the validator in the form of KAVA.
- Governance: KAVA token holders can use KAVA to vote on proposals and critical parameters of the Kava Network. As a delegator, you are also able to participate directly in governance, rather than passing your votes to the validator.
- Incentives: The network distributes a portion of KAVA emissions as incentives for scaling the network. These incentives go directly to top projects on each chain to drive growth, encourage competition, and improve the health of the Kava ecosystem.
Building on Cosmos, Kava uses a Byzantine Fault Tolerant consensus engine to support the proof-of-stake (POS) consensus mechanism and ensure the integrity of the network. Its unique co-chain architecture combines the Cosmos SDK’s speed and interoperability with the Ethereum Virtual Machine’s flexibility and developer support. The active validator set includes the 100 highest-ranked validators by staked tokens. A validator is randomly selected from this set to propose a block, and 66% of the remaining active validators must attest to the block for it to become final. Validators with higher stakes are more likely to be selected.
KAVA has both inflationary and deflationary mechanisms. Since tokens are minted as staking rewards, inflation is proportional to the percentage of bonded tokens. In addition, the ‘lender of last resort’ policy can mint KAVA if the system becomes under-collateralised. On the other hand, When a Collateralized Debt Position (CDP) is closed, the borrower must pay a stability fee in KAVA. The system burns all KAVA used to pay the stability fee, reducing circulation.
Initial Distribution Breakdown
- Private Sale 1 tokens comprise of 30.05% of the total token supply. It was conducted from June 15th to June 30th 2019.
- Private Sale 2 tokens comprise of 5.02% of the total token supply. It was conducted from July 15th to July 31st 2019.
- Private Sale 3 tokens comprise of 4.93% of the total token supply. It was conducted from August 15th to August 31st 2019.
- Binance Launchpad Sale tokens comprise of 6.52% of the total token supply. It was conducted in October 2019 for a total raise of ~$3MM worth of BNB at ~$0.46 per token for 6.52% of the total token supply.
- Kava Labs shareholders tokens comprise of 25.00% of the total token supply.
- Token Treasury tokens comprise of 28.48% of the total token supply.