Once you have delegated your HBAR, there are a few things you need to consider going forward:

• Staking rewards do not automatically compound. To compound your staking rewards, you must redeem the rewards daily, either manually by pressing “collect rewards” or triggered through transactions you make.
• There is no lock-up period when accounts are staked to a node. Stakers do not need to choose an amount of HBAR to stake from their account. The entire balance of the account is staked automatically to the selected node or account. There is no concept of “bonding” or “slashing” of your tokens. The staked account balance is liquid at all times.
• Nodes have a minimum stake and maximum stake. The node’s minimum stake must be met for the accounts staked to that node to be eligible to earn staking rewards. Make sure that this minimum is met to ensure you are earning rewards. Staked tokens that go over the maximum stake will no longer impact the proportion of rewards returned. The maximum stake threshold for each node will be the total number of HBAR divided by the total number of nodes in the network. The minimum node stake threshold value will be 1/4 of the maximum node stake value. Please note that these values will change as more nodes are added to the network or can change by vote of the Hedera Governing Council.
• Keep in mind that there is a minimum staking period. This is the minimum amount of time an account needs to be staked to a consensus node before the account is eligible to earn rewards. The minimum staking period is one day (24 hours). The staking period begins at midnight UTC and the staking period ends at midnight UTC.
• You don’t need to unstake to change your Hedera node. You can submit an account update to change the node and continue to earn rewards. If you change the Hedera node in which your account is staked to, you will continue receiving interrupted rewards.
• If you do choose to unstake and change the Hedera node in which your account is staked to, you will need to wait up to 48 hours to start earning staking rewards again. The amount of time waiting to receive rewards in this scenario is dependent on being staked for a full 24 hour cycle.

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.

Hedera has a native proof of stake model, there are some things to consider when selecting a node to delegate to your HBAR to:

Minimum Stake: The staking reward account needs to meet a minimum balance before rewards can begin to distribute rewards earned to the eligible staked accounts. The minimum HBAR balance threshold for the reward account is 250 million HBAR voted on by the Hedera Governing Council. If this balance is not met staking rewards will not be distributed. Make sure the node you want to delegate to has at least 250 million HBAR staked with them by viewing the balance on HashScan.

Reward Rate: The actual reward rate will vary depending on how many HBAR are staked for rewards, but the rate will not exceed the cap of 6.5%.

Active/Inactive: At present, rewards will continue to be earned when a node is down or inactive in the first phase. In the future, when nodes are down or inactive the staked account will not be eligible to earn rewards.

Network Share: You typically don’t want to choose a node with the highest network share or a node with a low network share. Delegating to the most popular node increases centralisation risks within the network as those validators will have more say in governance and a larger share of the blocks. A node with a low network share, might not be earning rewards as they fall under the minimum threshold to start earning rewards.

The Staking Rewards for HBAR are generated by:

• Distributions: The staking reward account (mainnet account 0.0.800) is the account that will distribute rewards. This account can be funded by anyone who chooses to donate and will distribute rewards to stakers once it reached the minimum threshold of 250M HBAR. The HBAR Foundation donated HBAR to account 800 to help it reach the minimum threshold, but is not and may not be the only entity that donates to that account. A total of 1 billion HBAR is currently distributed for staking rewards per annum, as voted by CoinComm.

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: Hedera does not employ a slashing mechanism.

Unbonding risk:Staking HBAR on Hedera does not involve any lockup period or unbonding period.

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

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

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

Token Utilities

• Staking: Users can stake HBAR up to contribute to the security of the Hedera Hashgraph Network and earn staking rewards in return.
• Gas token: HBAR is used for transaction fees. For every transaction submitted to the network, HBAR is used to pay fees that compensate validator nodes for bandwidth, compute, and storage.

Initial Distribution Breakdown

The token distribution of HBAR is as follows:

• 32.41% is allocated to Hedera Pre-Minted Treasury
• 4.44% is allocated to Employees
• 17.4% is allocated to SAFTS, Purchase Agreements
• 23.99% is allocated to Ecosystem Development
• 7.96% is allocated to Swirlds
• 7.96% is allocated to Founders

Certain coins, which are not yet included in the available currency, are being staked to support consensus and ensure the network’s security. These coins usually originate from treasuries controlled by Hedera and do not receive staking rewards. The non-circulating tokens that are staked are held in Hedera Treasury accounts, managed in a completely decentralized manner by the governing council, and have chosen not to receive staking rewards.