PHALA Staking

There are several ways to earn a return on your PHA, including lending them out to custodial providers or through decentralized lending protocols, running your own Phala StakePool, or delegating your tokens to StakePools of your choosing.

To delegate your tokens, you first need to bridge ERC-20 PHA to KHA, then you will be ready to start staking. Follow these steps below:

Step 1: Go to the Phala Staking Dashboard and connect your Talisman wallet.

Step 2: If you have ERC-20 PHA in your wallet, you will need to use SubBridge to bridge your tokens into Khala (KHA) to start staking 

Step 3: Navigate to the ‘Delegate’ tab on the Phala Staking Dashboard and click ‘Delegate’. Click on the ‘StakePools’ button and click the ‘Verified’ box to only filter for Verified Staking Pools and select a staking pool. If you are uncertain about how to choose a StakePool, refer to our FAQ for guidance on selecting a good StakePool.

Step 4: Once you have chosen a Staking Pool and decided on the number of tokens you would like to stake, click ‘Delegate’ and sign the transaction.

Please see here for a more detailed step-by-step tutorial.

The Staking Rewards on PHA consist of TEE mining rewards:

• TEE Mining Rewards (Block Rewards): Phala has allocated 70% (700M PHA) of its supply to TEE mining. The StakePool’s Annual Percentage Rate (APR) is determined by forecasting the number of tokens that will be mined in the upcoming hour, using information about the StakePool’s Workers and their attributes. The forecast is then adjusted to account for the Treasury Fee (20% of mining rewards are allocated to the treasury) and the commission rate charged by the StakePool owner. The adjusted forecast is then divided by the total amount delegated in the StakePool, and the resulting figure represents the mining rewards that each delegator will receive, proportional to their stake in the StakePool.

Please note that the total annual rewards are divided by all active delegators; hence, as the amount of staked tokens goes up, the reward rate goes down.

PHA has a total supply of 1 000 000 000 and has an annual inflation rate of 5%.

Initial token distribution

The Initial token distribution of PHA is as follows:

• 70% is allocated to TEE Mining
• 15.00% is allocated to the Private Sale investors
• 5% is allocated to Developer incentive
• 9% is allocated to Stakedrop and the initial parachain offering
• 1% is allocated to the Testnet incentive

Funding Rounds:

• $1.68M was raised in a Private Sale in 2019

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: At present, Slashing is not yet enabled on the Phala Network, however, it will be at some point in the future. For now, you can always get back as much PHA as you delegate. Once Slashing is enabled this will no longer be guaranteed.

Unbonding risk: When staking PHA tokens, there is a lockup period of up to 14 days. This means that investors will not be able to sell their tokens immediately, but instead need to wait up to 14 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 PHA 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 PHA.

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

Once you have delegated your PHA, there are things you need to consider going forward. 

• Firstly, you may want to use our Phala Staking Calculator to determine your expected return over your planned staking period.
• Keep in mind that delegated PHA is automatically compounded.
• As a participant in the Phala ecosystem, you will have the opportunity to vote on Phala Governance Proposals. While your contribution and vote are highly valuable to the ecosystem, it won’t affect your rewards.
• After you delegate to a StakePool, your tokens will be transferred and locked. As proof of the delegation, you receive a Delegation NFT in return. The Delegation NFT records its owner, the StakePool where the delegation is located, and the share of the corresponding StakePool. Your Delegation NFT is transferable, and you can also sell it to others on PhalaWorld’s NFT platform. Please note that when your Delegation NFT is transferred or sold to someone else, the delegated PHA will no longer belong to you, because you have lost the certificate to withdraw it back from the corresponding StakePool or Vault.
• It is important to periodically check on the performance of the stakepool you have selected to ensure they are still performing well.

It is essential for users to stake their PoS tokens with a dependable and highly performant Staking Pools, which is why we have rolled out our Verified Provider Program in June 2022. Through this program, we thoroughly scrutinise potential validators, evaluating factors such as security measures, their on-chain reliability, their provider setup, and value-added services for the whole ecosystem.

You can find more information about the providers that have been verified in VPP Batch 1 and Batch 2. Validators that are part of the VPP will have a blue checkmark displayed next to their names on our website.

When choosing a Staking Pool to delegate to, there are numerous factors to take into account:

• Commission Rate: When staking your tokens with a stakepool, the commission rate represents the percentage of your rewards that the stakepool 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 stakepool operator in the future. It’s important to note that stakepool may change their commission rates at any time.
• Number of Users: A stakepool may be more popular or trusted if it has a higher number of delegators than others.
• Number of Workers in the StakePool: Verify the quantity of Workers in the StakePool, as well as their status trends. As a general rule, a larger StakePool signifies a higher level of operation and maintenance by the Pool owner, and indicates greater stability for the mining pool. Historical data can confirm this trend.
• Historical APR: Examine the historical trend of the Annual Percentage Rate (APR) for the StakePool. A reliable and top-tier StakePool will demonstrate a consistent and stable historical APR, with only minor variations. Please don’t fixate solely on the APR of the StakePool, as some unethical Pool owners may manipulate their commission rates to artificially inflate the APR. However, such tactics are not sustainable over time. Instead, pay close attention to the historical trend of the APR to evaluate the long-term performance and reliability of the StakePool. You can view this by clicking on the stakepool name in the Phala Staking Dapp.
• Validators Self-Staked balance: A stakepool 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.
• Network Share: You typically don’t want to choose a StakePool with the highest network share (Total Staked) or a StakePool with a low network share. Delegating to the most popular StakePools increases centralisation risks within the network as those StakePools will have more say in governance and a larger share of the rewards. A StakePool with a low network share, might not be profitable and hence increases the risk of them discontinuing their services.

PHA is the native token of the Phala network that is used to carry out the key functions of the platform as detailed below:

Token Utilities

• Staking: Users can temporarily lock up PHA to contribute to the security of the network and earn TEE mining rewards.
• Network Fees: PHA is used for network fees. Each transaction processed by the network requires a small fee to be paid, which goes directly into the treasury.
• Governance: PHA is used to vote on governance proposals on the network. Public referenda can be proposed and voted on by any token holder in the system as long as they provide a bond.The number of PHA a person or group has determined how much influence your vote will have on the outcome of a proposal. Voters who are willing to lock up their tokens for a greater duration of time can do so and get their vote amplified.

In Polkadot, there are collators and validators. Collators maintain parachains (in this case, Phala) by collecting transactions from users and producing state transition proofs for the relay chain validators. The collator set (nodes that produce blocks) are selected based on the stake they have in the network.

In Polkadot, there are collators and validators. Collators maintain parachains (in this case, Phala) by collecting transactions from users and producing state transition proofs for the relay chain validators. Phala Network is currently running its collators on Aura consensus. Aura is a simple block authoring engine that rotates the block producers among the registered collator candidates one by one.

Unlike other Proof-of-Stake consensus systems, Phala can manage as many as one million CPU cores from over 100k nodes, which requires their staking mechanism to outperform existing PoS in both performance and efficiency. That’s why they have proposed Stake Delegation, which introduces an extra role of ‘StakePool’ into their system to connect computing nodes with PHA holders. Anyone can create a StakePool, and a PHA holder can delegate their PHA to the pool. Then the pool Owner can manage and stake for any Workers belonging to the pool.

PHA has a total supply of 1 000 000 000 and has an annual inflation rate of 5%.

Initial token distribution

The Initial token distribution of PHA is as follows:

• 70% is allocated to TEE Mining
• 15.00% is allocated to the Private Sale investors
• 5% is allocated to Developer incentive
• 9% is allocated to Stakedrop and the initial parachain offering
• 1% is allocated to the Testnet incentive

Funding Rounds:

• $1.68M was raised in a Private Sale in 2019

There are several ways to earn a return on your PHA, including lending them out to custodial providers or through decentralized lending protocols, running your own Phala StakePool, or delegating your tokens to StakePools of your choosing.

To delegate your tokens, you first need to bridge ERC-20 PHA to KHA, then you will be ready to start staking. Follow these steps below:

Step 1: Go to the Phala Staking Dashboard and connect your Talisman wallet.

Step 2: If you have ERC-20 PHA in your wallet, you will need to use SubBridge to bridge your tokens into Khala (KHA) to start staking 

Step 3: Navigate to the ‘Delegate’ tab on the Phala Staking Dashboard and click ‘Delegate’. Click on the ‘StakePools’ button and click the ‘Verified’ box to only filter for Verified Staking Pools and select a staking pool. If you are uncertain about how to choose a StakePool, refer to our FAQ for guidance on selecting a good StakePool.

Step 4: Once you have chosen a Staking Pool and decided on the number of tokens you would like to stake, click ‘Delegate’ and sign the transaction.

Please view our detailed step-by-step tutorial on How to Stake Phala (PHA).

Once you have delegated your PHA, there are things you need to consider going forward. 

• Firstly, you may want to use our Phala Staking Calculator to determine your expected return over your planned staking period.
• Keep in mind that delegated PHA is automatically compounded.
• As a participant in the Phala ecosystem, you will have the opportunity to vote on Phala Governance Proposals. While your contribution and vote are highly valuable to the ecosystem, it won’t affect your rewards.
• After you delegate to a StakePool, your tokens will be transferred and locked. As proof of the delegation, you receive a Delegation NFT in return. The Delegation NFT records its owner, the StakePool where the delegation is located, and the share of the corresponding StakePool. Your Delegation NFT is transferable, and you can also sell it to others on PhalaWorld’s NFT platform. Please note that when your Delegation NFT is transferred or sold to someone else, the delegated PHA will no longer belong to you, because you have lost the certificate to withdraw it back from the corresponding StakePool or Vault.
• It is important to periodically check on the performance of the stakepool you have selected to ensure they are still performing well.

PHA is the native token of the Phala network that is used to carry out the key functions of the platform as detailed below:

Token Utilities

• Staking: Users can temporarily lock up PHA to contribute to the security of the network and earn TEE mining rewards.
• Network Fees: PHA is used for network fees. Each transaction processed by the network requires a small fee to be paid, which goes directly into the treasury.
• Governance: PHA is used to vote on governance proposals on the network. Public referenda can be proposed and voted on by any token holder in the system as long as they provide a bond.The number of PHA a person or group has determined how much influence your vote will have on the outcome of a proposal. Voters who are willing to lock up their tokens for a greater duration of time can do so and get their vote amplified.

The Staking Rewards on PHA consist of TEE mining rewards:

• TEE Mining Rewards (Block Rewards): Phala has allocated 70% (700M PHA) of its supply to TEE mining. The StakePool’s Annual Percentage Rate (APR) is determined by forecasting the number of tokens that will be mined in the upcoming hour, using information about the StakePool’s Workers and their attributes. The forecast is then adjusted to account for the Treasury Fee (20% of mining rewards are allocated to the treasury) and the commission rate charged by the StakePool owner. The adjusted forecast is then divided by the total amount delegated in the StakePool, and the resulting figure represents the mining rewards that each delegator will receive, proportional to their stake in the StakePool.

Please note that the total annual rewards are divided by all active delegators; hence, as the amount of staked tokens goes up, the reward rate goes down.

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: At present, Slashing is not yet enabled on the Phala Network, however, it will be at some point in the future. For now, you can always get back as much PHA as you delegate. Once Slashing is enabled this will no longer be guaranteed.

Unbonding risk: When staking PHA tokens, there is a lockup period of up to 14 days. This means that investors will not be able to sell their tokens immediately, but instead need to wait up to 14 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 PHA 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 PHA.

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

It is essential for users to stake their PoS tokens with a dependable and highly performant Staking Pools, which is why we have rolled out our Verified Provider Program in June 2022. Through this program, we thoroughly scrutinise potential validators, evaluating factors such as security measures, their on-chain reliability, their provider setup, and value-added services for the whole ecosystem.

You can find more information about the providers that have been verified in VPP Batch 1 and Batch 2. Validators that are part of the VPP will have a blue checkmark displayed next to their names on our website.

When choosing a Staking Pool to delegate to, there are numerous factors to take into account:

• Commission Rate: When staking your tokens with a stakepool, the commission rate represents the percentage of your rewards that the stakepool 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 stakepool operator in the future. It’s important to note that stakepool may change their commission rates at any time.
• Number of Users: A stakepool may be more popular or trusted if it has a higher number of delegators than others.
• Number of Workers in the StakePool: Verify the quantity of Workers in the StakePool, as well as their status trends. As a general rule, a larger StakePool signifies a higher level of operation and maintenance by the Pool owner, and indicates greater stability for the mining pool. Historical data can confirm this trend.
• Historical APR: Examine the historical trend of the Annual Percentage Rate (APR) for the StakePool. A reliable and top-tier StakePool will demonstrate a consistent and stable historical APR, with only minor variations. Please don’t fixate solely on the APR of the StakePool, as some unethical Pool owners may manipulate their commission rates to artificially inflate the APR. However, such tactics are not sustainable over time. Instead, pay close attention to the historical trend of the APR to evaluate the long-term performance and reliability of the StakePool. You can view this by clicking on the stakepool name in the Phala Staking Dapp.
• Validators Self-Staked balance: A stakepool 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.
• Network Share: You typically don’t want to choose a StakePool with the highest network share (Total Staked) or a StakePool with a low network share. Delegating to the most popular StakePools increases centralisation risks within the network as those StakePools will have more say in governance and a larger share of the rewards. A StakePool with a low network share, might not be profitable and hence increases the risk of them discontinuing their services.