• Firstly, delegating from one validator to another can be done without waiting for the unbonding period. You might consider redelegating if your current validator raises their commission rate or gets jailed for misbehaviour on-chain. Once redelegated, you have to wait for 21 days before you are able to redelegate again. 
• Secondly, rewards are not auto-compounded. To get the most out of your tokens, you should consider claiming and staking your rewards more frequently, but consider that each transaction will cost you some gas. By using our ZetaChain staking calculator.
• By delegating to a good long-term oriented validator, you can reduce most of your maintenance and only have to check back to restake your rewards.
• Lastly, as a participant in the ZetaChain Ecosystem, once you have staked your tokens, you can vote on ZetaChain Governance Proposals. While your contribution and vote are highly valuable to the ecosystem, participating does not affect the sum of 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.

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 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. This metric has some limitations as Validators can choose to delegate to their own validator from another wallet, which is done to increase security of their funds. 

Current Status: To check if a validator is currently active, go to the Validator Dashboard. Check the status and make sure it is ‘Active’. Keep in mind that only the top 100 validators on ZetaChain, ranked by balance, receive rewards.

Network Share: You typically don’t want to choose a validator with the highest or 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 produce a larger share of the blocks. A validator with a low network share might not be profitable, increasing the risk of them discontinuing their services. If a validator drops out of the top 100, they also stop earning rewards. However, if you are willing to put more time in, then delegating to a smaller validator helps support the decentralization of the network. You would just have to make sure to check regularly if the provider is still active and operating. 

Performance: Make sure you pick a validator with the highest possible performance. Further, please check individual validators’ uptime, and our recommendation is only to pick those with a >=99% uptime 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 or explorers. This can be another great way to filter for validators that are long-term invested in the ZetaChain Ecosystem. By delegating to a validator that is strongly dedicated to the ZetaChain Ecosystem, you are supporting their development that indirectly impacts the value of your ZETA investment beyond the rewards from staking.

Staking rewards for ZETA are composed of:

Emissions: The initial 10% total supply pool of validator incentives are programmed to distribute over the first 4 years after the launch of the network. Emissions are fixed based on time/block. Validators earn emissions based on this curve and their securing the network. 

As this initial genesis pool tends lower, the protocol will introduce a planned 2.5% inflation through validator rewards separate from the emission curve at a certain block height. This inflation rate, at this shift, will replace the existing rate of validator emissions. Beyond this time, the inflation rate will be introduced and adjustable by the network via governance.

In addition, there is a factor of the bonded ratio and a target bonded ratio that is bounded. If the bonded ratio goes over the target, the emissions will reduce, and if the bonded ratio goes lower, the emissions will increase, helping incentivize more or less staking/bonding over time. However, the core emission curve and pool remains the same. Fixed rewards are emitted via the emissions pool. 

Transaction Fees:  Each transaction processed by the network comes with transaction fees. Transaction fees are collected by the network and distributed to each delegator 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 Cosmos Hub. 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. 

You are welcome to play around with our ZETA Staking Calculator to get a better feel of how these metrics can influence 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: ZETA delegated to a validator can be partially slashed due to validator downtime, a double signing event or other bad behavior. 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 up to 5% for double signing events. Slashed tokens are sent to the community pool.

Unbonding risk: When staking ZETA 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 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 ZETA long-term. 

Dropping out of the active set: A validator could drop out of the top 100 validators, meaning they no longer earn any rewards. Ensure you check back frequently to ensure your validator is active, not jailed and has not unreasonably raised their 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 ZETA.

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

ZETA is the native token of the ZetaChain ecosystem that is used to carry out the key functions of the platform as detailed below:

Token Utilities

• Gas token: Each transaction processed by the network requires a small fee to be paid to the validator. 
• Governance: ZETA is used to vote on ZetaChain governance proposals on the network. ZETA holders (not just stakers) can propose and vote on governance proposals to change a subset of network parameters. The amount of voting power is measured in terms of stake.
• Staking: Users can temporarily lock ZETA up to contribute to the security of the ZetaChain ecosystem.

ZetaChain Hub is powered by Tendermint BFT. Tendermint BFT is a Byzantine Fault Tolerant (BFT) consensus engine developed by Tendermint. It offers instant finality, is horizontally scalable and is secure against malicious actors. It is also open-source, meaning anyone can inspect and use the code. Additionally, it is simple to set up and use, allowing developers to quickly and easily build distributed applications. The active validator set consists of the 100 highest-ranked validators by staked tokens, from which 1 validator is randomly selected to propose a block with 66% of the remaining active validators being required to attest the block in order for it to become final. The higher the stake, the more likely they are to be selected.