Staking is one of the most critical things that our community can do to support the decentralization, security, and performance of the Radix Public Network. It’s what decides which validator nodes verify transactions, participate in consensus, and ultimately operate the Radix Public Network.
What is staking on Radix, and why is it important?
A key element of the decentralization, security, and performance of the Radix Public Network is the use of a Delegated Proof of Stake (DPoS) system where users stake (delegate) their XRD tokens to validator nodes. The staked tokens are not sent to the validator node – they are merely locked in place until the user unstakes them. It’s a form of voting.
The network then selects those nodes that receive the most stake to conduct consensus on transactions. Because of this, the community of XRD token holders is, in effect, choosing the set of validators that operate the Radix Public Network. Radix’s DPoS system, and your participation in it, is thus critical to the ongoing decentralization, security, and performance of the Radix Public Network.
Economic incentives are built into the Radix Protocol to encourage holders of XRD tokens to stake their tokens to good nodes and for node-runners to operate their nodes well. The Radix protocol creates these incentives through the minting of new XRD tokens called emissions. Emissions are provided to both stakers and node-runners (if they have specified a validator fee) if each node is doing its job by correctly participating in consensus on transactions.
Staking XRD tokens, therefore, requires making some careful choices on which nodes to delegate your stake to. It’s imperative that you are confident that the nodes you stake to are trustworthy and performant and for you to delegate your stake to a diversity of node-runners in case something goes wrong with any one of them. Unstaking takes 500 epochs, or between 1-3 weeks (depending on how quickly the network is producing “rounds”), so if you choose poorly or don’t spread your risk, you may lose out on network emission rewards.