Stake SUI

Once you have delegated your SUI, 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 SUI 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 SUI you have staked.

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.

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.

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.

The Staking Rewards for SUI are generated by:

• Inflation on the SUI Network (Block Rewards): The total amount of stake rewards is calculated as the sum of computation fees accrued throughout the epoch plus the epoch’s stake reward subsidies. The latter component is temporary in that it will only exist in the network’s first years and disappear in the long run as the amount of SUI in circulation reaches its total supply.
• 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.
• Storage Fees: When users transact on Sui, they pay fees upfront for both computation and storage. The storage fees are deposited into a storage fund used to adjust the share of future stake rewards distributed to validators relative to the users that stake SUI with them. Sui’s Delegated Proof-of-Stake mechanism calculates total stake as the sum of user stake plus the SUI tokens deposited in the storage fund. Hence, the storage fund receives a proportional share of the overall stake rewards depending on its size relative to total stake.

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.

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: Sui is designed to encourage and enforce community monitoring of the validator set. This is done through the Tallying Rule by which each validator monitors and scores every other validator in order to ensure that everyone is operating efficiently and in the network’s best interest. Validators that receive a low score can be penalized with slashed stake rewards.

Unbonding risk: The unbonding period for SUI is 1 day. 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 1 day 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 SUI long-term.

Protocol security risks: There is an inherent risk that the protocol could contain unknown bugs. This not only applies to staking but your SUI investment in general.

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

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

Token Utilities

• Staking: Users can temporarily lock SUI up to contribute to the security of the SUI Network.
• Gas token: SUI 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 SUI 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.

Sui uses parallel transaction processing and horizontal scaling to improve execution efficiency and scalability. Transactions are grouped by objects due to Sui Move’s object-centric model, allowing validators to process different objects’ transactions in parallel. For complex transactions, Sui utilizes the Narwhal and Bullshark protocol, providing a DAG-based mempool and efficient Byzantine Fault Tolerant (BFT) consensus. Narwhal maintains the availability of submitted transaction data, while Bullshark linearizes and orders the Narwhal DAG.

SUI has a maximum total supply of 10 billion tokens, of which 528,273,718 SUI (5.28%) was circulating at launch. The remaining tokens will be unlocked periodically over the next 7 years.

Initial distribution breakdown

• 20.00% is allocated to Early Contributors
• 14.00% is allocated to Investors
• 10.00% is allocated to Treasury
• 6.00% is allocated to Community Access Program and App Testers
• 50.00% is allocated to Community Reserve