KYVE Network Staking

Delegated staking offers numerous validators, and selecting the right one 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 scrutinize potential workers, evaluating factors such as security measures, their on-chain reliability, their provider setup, and value-added services for the whole ecosystem.

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

Commission: The commission rate is the percentage of your reward that validators keep. A high commission rate reduces your rewards, while a low rate may impact the validator's profitability and long-term viability.

Number of Users: The number of delegators can significantly influence your choice of validator. More delegators typically enhance network security and reliability, reflecting positively on the validator's reputation.

Performance: Select validators with the highest possible uptime, ideally 99% or above, and a consistent track record of avoiding slashing.

Validator Self-Staked Balance: Validators with a high amount of self-staked tokens have more at stake, providing a strong incentive to maintain their services. However, note that validators can delegate to themselves from another wallet to enhance security.

Network Share: Delegating to the most popular validators can increase centralization risks. Conversely, smaller validators may need more profitability, potentially leading to service discontinuation. Supporting smaller validators can help decentralize the network, but requires regular monitoring to ensure they remain active.

KYVE staking rewards are generated through a combination of block rewards from the Chain Layer and bundle rewards from the Protocol Layer. Block rewards consist of transaction fees and newly minted KYVE from inflation, incentivizing validators to secure the network. Bundle rewards, which compensate validators for uploading and validating data, are funded by pool funders and an inflation-splitting mechanism that redirects a portion of newly minted KYVE to support protocol operations. These rewards are distributed among uploaders, delegators, and the treasury, ensuring fair compensation and sustainability.

Block Rewards: Includes minted KYVE from inflation and transaction fees from previous blocks.

Bundle Rewards: Funded by pool funders and inflation splitting, incentivizing data upload and validation.

Reward Distribution: Covers operating costs, storage costs, and validator commissions. A small network fee (1–2%) is allocated to the community pool. Rewards are distributed among treasury, uploaders, and delegators.

Inflation Splitting: Divides newly minted KYVE between chain and protocol to balance funding.

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: KYVE 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. You can get slashed up to 5% for double signing events.

Unbonding Risk: When staking KYVE 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 KYVE 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 to the investment in KYVE.

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

KYVE is a unique Layer 1 Proof of Stake (PoS) blockchain developed using the Cosmos SDK. It features a two-layer architecture: the Chain Layer and the Protocol Layer, each with its own node infrastructure.

Chain Layer serves as the backbone, operating as a sovereign PoS blockchain built on Ignite, utilizing the Tendermint consensus engine. Its primary role is to ensure consensus and secure the Protocol Layer above it.

Protocol Layer houses the core logic that sets KYVE apart, enabling efficient data validation and supporting its innovative functionalities.

Kyve Network native token, KYVE, plays a central role in the network and serves multiple purposes:

Chain Level: KYVE is used for staking and delegating, ensuring network security through Proof of Stake.

Protocol Level: It facilitates funding, staking, and delegating to secure and validate uploaded data.

Governance Level: KYVE enables stakeholders to participate in decision-making by submitting and voting on proposals, shaping the network's growth and development.

KYVE's token distribution ensures a sustainable, secure, and decentralized ecosystem with a total supply of 1 billion KYVE tokens allocated as follows:

• Ecosystem - 27.5%
• Korellia Testnet Rewards - 2%
• Foundation Delegation - 10%
• Developer Adoption - 10%
• DEX Liquidity - 2.5%
• Funding Rounds - 31.5%
• Team Allocation - 16.5%