After delegating your SCRT tokens, there are a few things to keep in mind:

• You can claim your rewards either on the top of the Keplr dashboard or in your Keplr browser extension. A pop-up will appear asking you to approve the transaction. After claiming your SCRT, it should be added to your wallet balance.
• You can check the “Stake or Die” rewards calculator to see the potential return on your staked SCRT.
• It is possible to switch your delegation from one validator to another every 21 days. This may be something to consider if your current validator raises their commission rate or gets jailed for misbehavior on the chain. However, please note that once you’ve redelegated, you’ll need to wait 21 days before you can do it again. Further, during the 21-day unbonding period, you cannot earn rewards.
• 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 SCRT. 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 Secret Network, you will have the opportunity to vote on Governance Proposals either through the validator you delegate to or vote directly by yourself. 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 Secret Network are part of the VPP, simply go to the validator page on Minstcan and click on a validator’s name. If that validator is a verified provider, it will have the Staking Rewards logo shown under ‘Additional information’.

There are many metrics to consider when selecting a validator to delegate to:

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. Currently, the commission rate floor is 0%, while the maximum is 20%. It’s important to note that validators may change their commission rates at any time.

Extra Fees: Separate from commission rate, there are two additional sets of fees on earned block rewards: the community fee (2%) and the Secret Foundation fee (15%). The community fee gets pulled from all block rewards and is sent to a pool of funds known as the Community Pool. This pool is used to help fund on-chain governance proposals that help advance the Secret Network ecosystem and protocol. The Secret Foundation uses its block reward fees to aggressively expand the Secret Network ecosystem which includes direct support for valuable community contributors.

Number of Users: A large number of delegators may signal a positive reputation for a validator.

Validators Self-bonded Balance: Validators with significant amounts of self-bonded tokens may have a greater motivation to maintain their operations, as they have more at risk than those with lower self-bonded 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 network share could be the best approach to keep the balance in decentralization and profitability.

Performance: To ensure the best results, it’s important to select a validator with high uptime performance. You can view a validator’s performance on the Validator Dashboard. Our suggestion is to only choose validators with an uptime performance of 99% or higher and a track record of not being 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.

Native staking rewards for SCRT are composed of:

Block Rewards: Part of the SCRT staking rewards come from SCRT token inflation parameters, which is capped at 15% when the ratio of staked to non-staked SCRT remains under 66%. If the staking rate goes above 66% the inflation gradually declines to 7%. This means Secret Network has a variable inflation rate that ranges from 7% – 15%.

Transaction Fees: Each transaction processed by the network comes with transaction fees. The fee on Secret Network is set by the validators. The current gas fee per unit of gas is 0.0125uSCRT (0.0125 * 10^-6 SCRT). A transaction on average is sized at 100,000 gas units, each transaction therefore costs 100,000 * 0.0125 *10^-6 = 0,00125 SCRT. Transaction fees are collected by the network and distributed to each staker proportional to their stake. The Staking APR will vary with network usage. The APR will increase as the network gets more traction and more transactions occur on Secret Network. If your validator gets lucky and only produces high-fee blocks, your reward rate will be higher than one who proposes blocks with lower fees. 

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: The Secret Network adopts the same slashing penalities as Cosmos. For example, if a validator experiences downtime, it can result in slashing of 0.01% of the validator and its delegators’ staked SCRT, as well as jailing of the validator for 10 minutes. Validators do not earn block rewards for the jailing period and must manually unjail their node. Additionally, slashing for double-signing can occur when the validator signs the same block twice, which leads to slashing of 5% of the validator and its delegators’ staked SCRT, and jailing forever (tombstoned) of the validator node. A tombstoned validator cannot earn block rewards anymore, and its delegators must re-delegate their SCRT to another validator. If slashing occurs frequently, a validator may lose their ability to vote on future blocks for some time.
• Unbonding risk: When staking SCRT 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 for the tokens to unbond before they can be traded again. This is something to keep in mind when deciding to stake, as the crypto markets are highly volatile.Consider keeping funds liquid if you do not intend to hold SCRT long-term.
• Dropping out of the active set: The risk of a validator getting slashed or dropping out of the active set 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 SCRT.

This list is not exhaustive and other risks may apply.

Secret Network is powered by the Native public coin SCRT and it is used to perform various important functions within the platform.

Token Utilities

• Staking: SCRT holders can choose to lock up their tokens in the protocol contract in order to help secure the Secret Network and earn staking rewards.
• Gas token: SCRT is used for payment of transactional and computational fees. When processing transactions on Secret Network users need to pay for the space they take up in a block. This payment for computation of data is called a gas fee. The gas fee on Secret Network is set by the validators and can always change if validators decide to run with different settings.
• Governance: Voting on Secret Network is powered by the SCRT token, every staked SCRT equals to 1 vote. Secret Network uses the delegated Proof of Stake (dPOS) system coming with the Cosmos SDK and the Tendermint Consensus engine. This means validators vote with the power of the combined total staked SCRT of all their delegators. A delegator can also override the vote of their validator by voting themselves. If Quorum on a proposal is reached a simple majority of staked SCRT is needed to pass a governance proposal. Proposals have a 7-day voting period and a delegator can switch their vote up till the last block. Read more about how to vote on Secret Network here.
• Privacy: By wrapping SCRT or any bridged token (from various ecosystems such as Ethereum, Binance Smart Chain, Monero, Cosmos/IBC) into their “Secret Token” (SNIP-20) equivalent, users gain immediate privacy. The balance and every interaction with “Secret Tokens” are private by default. 
• Other utilities: Secret Tokens can be used to buy/sell NFTs, participate in DeFi, pay in private, escrow for data/content and even get a credit score all while maintaining your financial privacy.

Secret Network leverages novel key management techniques, encryption schemes, and Trusted Execution Environment (TEE) technology to bring encrypted input, output, and state to the blockchain. The decentralized network of computers that host Secret Network come to a consensus (delegated Proof-of-Stake — Byzantine Fault Tolerance) without ever obtaining access to the data they process. Users can use “viewing keys” to view their sensitive data or enable third parties to do the same. 

Secret Network’s default number of validator nodes is 50, with room for more nodes to join the network. You may see the current number of active valdiator nodes on the Validator Dashboard mentioned above. The more SCRT bonded to any given validator, the greater the likelihood said node will be selected for block proposal.

​​The SCRT token has no supply cap because it constantly rewards network participants with SCRT inflation to enable security of the protocol. The Secret Network inflation parameters are dynamic, the inflation rate is 15% as long as the ratio of staked to non-staked SCRT remains under 66%. If the bonded rate goes above 66% the inflation gradually declines to 7%.

Besides token inflation, SCRT tokens can be burned under several circumstances. For example, the system will burn SCRT tokens when slashing happens upon downtime and/or double-signing, which discourages poor practices and dishonesty by protocol-recognized actors. 

Initial Token Distribution Breakdown 

The initial supply of SCRT amounted to ~160 million SCRT after including the 114 million tokens generated via the token swap process. The distribution of these tokens is as follows:

• Community (46.6%): This allocation accounts for all tokens the community has swapped, coins held by genesis parties that are not affiliated with Enigma, and the on-chain community pool
• Team (22.4%): The team allocation includes all tokens granted to past, present, and future Enigma employees. It spans Enigma and other affiliated companies, such as the Secret Foundation (which employs past Enigma employees). Team tokens are normally vested based on personal employment or advisory agreements, ranging between 2-4 years.
• Enigma & Affiliates Treasury (18.6%): Enigma’s swap of its treasury tokens to 30 million tokens
• Ecosystem Pool (12.4%): An on-chain treasury that provides a source of funding for projects and initiatives being built on the Secret Network. It began with a 20 million SCRT allocation.