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Calculate Your MATIC Staking Rewards
Examine the Long-Term Compounding Effect of Staking - per Asset, Provider, Staking Amount and Price Scenario.
Learn about Polygon Staking
How to stake MATIC
To earn a yield on your MATIC, you can either lend them out to custodial providers or via a Defi lending protocol, run your own validator or delegate your tokens to validators of your choice.
We recommend using a Ledger Hardware Wallet to keep full control over your funds. To delegate your tokens, you should ensure you have your MATIC on your Metamask Wallet and follow the steps below:
Step 1: Go to the Matic Staking Dashboard and connect your wallet. Please note that you will need to pay gas fees in ETH, so it is recommended to have 0.05 to 0.1 ETH available.
Step 2: Choose a Validator and click the ‘Delegate’ button. If you are unsure which validator to delegate to, refer to our FAQ on how to choose a validator.
Step 3: Enter the amount of MATIC you would like to stake and click ‘Continue’
Step 4: Sign the transaction
Do I need to maintain my staking in any way?
Once you have delegated your MATIC, there are a few things you need to consider going forward:
- Firstly, to ensure that you are getting the best return on your staked assets, you should periodically review your validator’s performance and commission rate. If you notice that your validator has raised their commission or has been jailed for misbehaviour on the chain, you may want to consider switching to a different validator. Regularly checking in on your validator can ensure that they provide good performance and reasonable commissions.
- Secondly, staking rewards are not automatically compounded. To maximize your rewards on Polygon, it is recommended to claim and stake your rewards frequently. However, it is important to note that each transaction will incur gas fees, so you should optimize your strategy accordingly. By using our MATIC staking calculator, you can calculate the optimal re-stake frequency to help you maximize your rewards and optimize your strategy based on the amount of MATIC you have staked.
- Lastly, as a participant in the Polygon Ecosystem, once you have staked your tokens, your validator can vote on Governance Proposals. Please note that you as a delegator entrust the validators with your governance rights, you cannot vote yourself on a proposal.
How do I choose Polygon validators?
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.
There are many metrics to consider when selecting a validator to delegate to:
Commission Rates: The commission rate a validator charges is the % of your reward that the validator keeps for themselves. A high commission rate means your rewards will be lower whilst a low commission rate could mean that the validator is not profitable and could cause issues for them in the future. Keep in mind that validators can adjust their commission rates up or down over time.
Number of Users: A high number of delegators could indicate positive sentiment towards a validator.
Validators Self-Staked balance: A provider that has 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 Health 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.
Network Share: You typically don’t want to choose a validator with the highest network share 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: Make sure you pick a validator with the highest possible uptime performance by viewing the validator information on the Validator Dashboard. Our recommendation is to only pick those with a >=99% performance and a long history of not getting slashed.
Value Add to the Ecosystem: Some providers offer extra services to their delegators, such as tax reporting tools, explorers, etc. This can be another great way to filter for validators that are thinking long-term. You can view the value-added services of staking providers by searching for their profile on our website and scroll down towards the bottom of the page.
How are the staking rewards generated?
The Staking Rewards for MATIC are generated by:
- Inflation on the Polygon Network (Block Rewards): Polygon allocates 12% of its total supply of 10 billion tokens to fund the staking rewards. The number of tokens released per year for inflation is predetermined and can be seen here. This implies that MATIC holders who choose not to stake will get diluted over time.
- Transaction Fees: Transaction fees are collected by the network for every transaction processed. These fees are then distributed to delegators in proportion to their stake. The annual percentage rate (APR) for staking rewards will vary based on network usage.
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.
What are the risks to staking MATIC?
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: MATIC 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 2 – 5 % for double signing events.
Unbonding risk: The unbonding period for MATIC is 21 days. Crypto markets are highly volatile, and investors need to be aware that they cannot sell their tokens immediately once they have staked them. They first need to wait 21 days for the tokens to unbond before they become liquid. Please take note of this lockup before you decide to stake. Consider keeping funds liquid if you do not intend to hold MATIC long-term.
Dropping out of the active set: On top of potentially losing out on rewards if your validator gets slashed, a validator could also drop out of the top 100, meaning they no longer earn any rewards. Ensure you check back frequently to ensure your validator is active, not jailed and has not raised their commission fees.
Protocol security risks: There is an inherent risk that the protocol could contain unknown bugs. This not only applies to staking but your MATIC investment in general.
Please note that this is not an exhaustive list of all the risks related to staking.
What is MATIC?
MATIC is the native token of the Polygon network that is used to carry out the key functions of the platform as detailed below:
- Staking: Users can temporarily lock MATIC up to contribute to the security of the Polygon Network.
- Gas token: MATIC is used for transaction fees. Each transaction processed by the network requires a small fee to be paid to the validator, which gets shared with stakers.
- Governance: As a delegator on the MATIC network, you can participate in governance by voting on proposals using your staked tokens. Only tokens that have been staked are eligible for governance voting, and the amount of voting power you have is determined by your stake. Like many other networks, you as a delegator entrust the validators with your governance rights.
What consensus algorithm does MATIC network use?
Polygon uses the Plasma framework and the More Viable Plasma (MoreVP) consensus algorithm to ensure the security and scalability of its network. MoreVP is a variant of the Proof-of-Stake (PoS) consensus algorithm. In MoreVP, block validation is done through a hierarchical structure, with multiple levels of block validators working together to ensure the security and reliability of the network. This allows Polygon to achieve high transaction throughput and low transaction fees, while maintaining the security and decentralization of a PoS blockchain.
What are the tokenomics of MATIC?
Polygon has a maximum total supply of 10 billion tokens, of which ~ 8.96 billion are in circulation right now. The remaining ~ 1 billion tokens will be unlocked periodically over the next 2 years.
Initial Distribution Breakdown
12% of total token distribution is reserved for staking rewards, the number of tokens released per year for inflation is predetermined and can be seen here. The initial distribution of Polygon (MATIC) tokens is as follows:
- 12.00% is allocated to Staking Rewards
- 23.33% is allocated to the Ecosystem
- 21.86% is allocated to Foundation
- 4.00% is allocated to Advisors
- 16.00% is allocated to the Team
- 3.80% is allocated to Private Investors
- 19.00% is allocated to Binance Launchpad
- $165,000 was raised in the Seed Round on Apr 2019 with an average price of $0.00079
- $440,000 was raised in the Early Supporters on Apr 2019 with an average price of $0.0026
- $5M was raised in the IEO on April 2019 with an average price of $0.0026
- $450M was raised in the Funding Round on Feb 2022
From the Staking Rewards Journal