Subsquid Staking

To earn SQD staking rewards, you can either run your own worker or delegate tokens to workers 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 SQD on your MetaMask wallet and follow the steps below:

Step 1: Navigate to the Subsquid Network App and connect your wallet.

Step 2: Go to the “Dashboard” tab.

Step 3: Select the worker from the list. Support your decision with workers associated with providers included in our Staking Rewards Verified Staking Provider (VSP) Program.

Step 4: Enter the amount of SQD you want to stake.

Step 5: Finalize the staking process by clicking “Delegate” and confirm the transaction in your wallet.

Delegated staking offers numerous node operators, 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 % of your reward that the workers keep for themselves. A high commission rate means your rewards will be lower, whilst a low commission rate could mean that the worker is not profitable and could cause issues for them in the future. Keep in mind that commission rates can change up or down over time and depend on the worker's uptime and the total amount of SQD delegated to the worker.

Number of Users: The number of delegators can significantly influence the decision of which worker to delegate to because it impacts rewards, network security, and the validator's reputation. Validators with more delegators enhance network security and are perceived as more reliable.

Performance: Make sure you pick a worker with the highest possible uptime. Our recommendation is to only pick those with a >=99% performance and a long history of not getting slashed. 

Staked Balance: The amount of tokens delegated to the worker influences the rewards. There is a sweet spot, as none of the extremes result in higher returns. Currently, both the worker and its delegators are rewarded the most when the total delegated SQD count is around 20,00-30,000. Anything more or less means fewer rewards.

Delegation Capacity: To maximize rewards, delegate to high-quality but lesser-known workers. Seek out workers with a high uptime percentage and significant available delegation capacity. The Delegator APR decreases significantly once more than 20,000 SQD is delegated to the worker.

SQD rewards are generated from a rewards pool allocated 10% of the total supply at TGE, which is 133,700,000 SQD. For each epoch, the rewards pool unlocks rewards. Rewards are distributed to workers and delegators through the Reward Manager's on-chain claim commitment. The reward cap is fixed during an initial 3-year phase, after which it drops until governance decides on a new inflation schedule to replenish the pool. This flexible approach allows the community to use historical data for informed decisions on future SQD issuance.

The reward rate depends on two factors: utilization of the network and staked supply. The rewards are then distributed between the workers and delegators, and the leftovers are split between the burn and the treasury.

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.

Protocol Security Risks: There is an inherent risk that the network could contain unknown bugs, this risk applies not only to staking but also to the investment in SQD.

Variable Rewards: Delegating to a worker with more than 20,000 SQD significantly decreases the APR. Therefore, it's crucial to find a balance in delegation to maximize rewards and avoid extremes. Delegators should monitor if their selected worker does not exceed the optimal SQD amount and has a high uptime.

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

• Staking rewards are influenced by workers’ uptime and the amount of delegated SQD tokens. Users should monitor selected workers' performance to ensure they are eligible for the most rewards.
• You can monitor your delegations and token holding using the Subsquid Network App and corresponding Delegations and Assets tabs. In addition, you can determine the state of your tokens and whether they are transferable, locked, claimable, bonded, or delegated.

SQD is the native ERC-20 token of the Subsquid Network ecosystem, deployed on the Ethereum mainnet and bridged to Arbitrum One. The SQD token serves several key functions within the Subsquid ecosystem:

Incentive Alignment: Rewards node operators for contributing computational and storage resources.

Participant Curation: Allows for the permissionless selection of trustworthy nodes through delegation.

Resource Consumption: Enables data consumers to increase rate limits by locking tokens.

Governance: Allows tokenholders to participate in decision-making and vote on protocol changes.

The total supply of SQD is 1,337,000,000 tokens.

Token distribution of total SQD supply:

• Pre-Seed Backers - 12%
• Seed Backers - 16.3%
• Strategic I Backers - 4.6%
• Strategic II Backers - 2%
• Team - 15%
• Reserved Treasury - 28.1%
• Liquid Treasury - 5%
• Worker Rewards - 10%
• Community Sale - 5%
• Testnet Participants - 1%
• Testnet Worker - 1%

Workers in the Subsquid network provide storage and computation resources, serve data in a peer-to-peer manner, and earn SQD tokens as compensation. They must register on-chain by bonding 100,000 SQD tokens, which can be slashed for protocol violations. SQD holders can delegate to workers to signal reliability and earn rewards. Rewards are distributed based on the worker's online presence, data served, delegated tokens, fairness, and liveness. Workers submit ping information and signed query logs to validators to commit to their results.