Native delegated staking on Aptos is live on Liquidswap
Table of Contents
Native delegated Aptos staking is finally available on mainnet. Head over to Liquidswap and stake your APT on one of the validators to earn passive rewards — but do read this guide first.
- Delegated staking with Liquidswap is live on Aptos mainnet! Try it here.
- Before, one needed a node and 1 million APT to stake. But from now on, Liquidswap offers delegated staking. Select a validator, enter the amount of APT to be staked, and confirm. Rewards will accrue automatically.
- Native APT staking is one of the safest yield-bearing instruments on Aptos, because the rewards are generated by the blockchain itself.
- Validators participate in Aptos governance by voting for blocks and as leaders, whenever they get selected according to a special formula. The leader gets the reward in each round of voting.
- The bigger a validator’s stake, the higher their chances to be selected and the larger the maximum reward. Validators vie for stakers’ funds to improve their own position,and share the rewards with stakers in return.
- Staking works in 30-day cycles, where the first available unlock date is at the end of the cycle. In other words, if the cycle ends on May 10 and you start the unlocking process on April 20, the funds should be unlocked on May 10. You will continue earning rewards throughout the unlocking period.
- The minimum amount you can stake is 10.001 APT. The smallest amount you can unstake is 10 APT. The remaining part of the position should be above 10.001 APT, or the whole balance will be unstaked.
- The target APR is 7%, but validators retain a commission (7-12%).
- When choosing a validator, make sure it’s active and pay attention to the commission and performance.
How do staking and delegated Proof-of-Stake work on Aptos?
In Aptos, staking is a key part of governance, consensus, and transaction validation. Every validator node needs to have funds staked on it in order to vote on new blocks. The minimum amount is 1 million APT.
Moreover, stake size is one of the variables in the special formula that selects a leader among all the validators. The leader proposes a block and gets the reward after a round of voting, as long as the block is accepted.
Leader selection happens many times during an epoch (approximately 2 hours), so every validator has multiple chances to become the leader and get rewarded. The incentive to be an Aptos validator is to become the leader as often as possible. To maximize one’s chances of being selected, a validator node needs to have a good performance record and a large stake.
The reward itself depends on how successful the leader’s previous block proposals were. For example, if a leader was elected 10 times, and 7 of the blocks they proposed were accepted by the voters, they would get 70% of the maximum reward. The maximum reward depends on the leader’s stake.
As of April 2023, there were 108 validators on Aptos mainnet. The top validators managed to be elected leader and score a reward more than 600 times in an epoch.
APT staking vs. delegated staking
Direct APT staking by validators has been available from the moment Aptos mainnet was launched. The feature we are offering to you now is delegated staking, where regular APT holders can delegate APT to validators ad participate in rewards.
This is known as Delegated Proof-of-Stake (DPoS). On the network architecture level, it was introduced in December 2022 through AIP-6 (Aptos Improvement Proposal no.6).
As long as you have an account on the Aptos blockchain with some APT in it, you automatically have an Owner role. As an Owner, you can stake your APT and appoint a node as a validator to vote on your behalf. (Of course, an Owner can also operate their own node, but that is technically complex.)
Whenever the validator node you appointed earns a reward, you’ll get part of it. At the same time, the validator won’t have access to your funds.
How to stake APT on Liquidswap mainnet
Before you start: while APT staking has been battle-tested over a few weeks on testnet, bugs can occur on mainnet, too. If you encounter issues staking on Liquidswap, write to our Telegram tech support chat.
How much is the APR?
The average target APR is 7% before commission. You’ll need to subtract the validator’s commission from this number. For example, if the commission is 10%, the actual APR should be 7%*0.9=6.3%.
Also, remember that the reward amount depends on how often your chosen validator is selected as leader, their total staked value, and their proposal success rate. Because of this, the APR can fluctuate.
How to choose a validator
You can view the list of active delegated nodes on both Liquidswap and Aptos Explorer. Most of them are run by well-known blockchain infrastructure providers like BwareLabs, Chorus One, and Luganodes. Clicking on the View icon (the little eye) next to a validator’s address on Aptos Explorer will take you to its details page.
Things to consider:
- Active/inactive - an inactive validator doesn’t earn any rewards;
- Commission - the reward share that the validator keeps for itself. Most pools charge between 7% and 12%. The lower the commission, the bigger is your share;
- Rewards earned;
- Performance and reward performance - how many of the validator’s proposals in the last epoch were passed and the percentage of the maximum potential rewards that it earned in the last epoch. Of course, past performance never guarantees future performance.
Pontem Network doesn’t currently have its own validator, though we may create one in the future. The pools, commissions, and APR you see on Liquidswap are the same that you’ll see on any other platform.
The unlocking period
Staking on Aptos runs in cycles of 30 days. No matter at which point during a cycle you stake, the nearest available unstaking date will be at the end of the cycle. You can submit a withdrawal request any time, but it will be processed at the end of the 30-day period. As each pool’s cycle starts at a different point, you’ll see different unlock times on Liquidswap.
Example.A cycle starts on April 20, so the unlock date will be on May 20. If you stake on April 21 and unstake on the same day, the funds will become available for withdrawal on May 20. If you submit an unstaking request on May 10, you’ll be able to withdraw the money on May 20 just the same. And if you stake on May 10 and click Unstake on May 18, you’ll still need to wait for May 20. All this time you’ll be earning rewards.
1) Make sure you have at least 10.1 APT. The minimum staking amount on Liquidswap is 10.001 APT, and you’ll need some for gas fees, too. Ideally, you need 20-21 APT because of how the stake withdrawal formula works (more on that later).
2) Connect the wallet to Liquidswap and go to the Staking page. Pick a validator and click Stake. Note that each validator can decide how much of the rewards to withhold, but the commission is generally around 10%.
Commission is NOT the APR. It’s the share of the rewards retained by the validator. Example: a validator has 100 delegators and earned 10 APT in rewards. If the commission is 10%, the validator will keep 1 APT and distribute the remaining 9 APT among all the delegates in proportion to their stakes.
Liquidswap displays which validators are currently active. If you stake on an inactive validator, you won’t earn any rewards until it becomes active again.
3) Enter the exact amount of APT you want to stake. It has to be above 10.001 APT. Click Stake and confirm in the wallet.
4) Once processed, the stake will appear in My Holdings. You can always add to your stake later.
Staking rewards begin to accrue starting from the next epoch. They are automatically restaked (added to the body of your stake), so that you’ll also be earning an APR on the rewards. So, if you see zero in Earned Rewards, check the number under My Stake - it will have increased.
You can’t claim the rewards separately. The only way to withdraw the rewards is through partial or full unstaking.
To withdraw the funds, click Unstake and enter the amount. Confirm in Pontem Wallet.
The My Deposit section will get updated: the part due for unlock and withdrawal will move to “Inactive stake”. You’ll also see it under Lockup Amount in the Unlocking tab. At this point, the initial unlocking period lasts 30 days, but this can change. Don’t worry: you will be earning staking rewards during the whole unlocking period, and they will keep getting restaked. However, once the funds move to Available for Withdrawal in My Holdings, they will stop generating rewards.
Notice anything unexpected? We set 9 APT for unstaking, but under Inactive it says 10 APT. Let’s see why it is so.
The system uses the following rules:
- The minimum unstaking amount is 10 APT. If you set a lower number, 10 APT will be unstaked.
- There is a tiny fee that is charged when unstaking, but it will be refunded to you at the end of the epoch.
- For partial unstaking, the remainder should be at least 10.001 APT. If this condition isn’t met, the whole position will be unstaked. For example, if you have 13 APT staked and enter 3.9 APT for unstaking, the remainder would be 9.5 APT. As it’s less than 10.001 APT, you’ll see a warning.
- From these two conditions follows that, if your stake is between 10 APT and 20 APT, you can unstake only the whole amount. Even if you have exactly 20 APT, you can’t do a partial withdrawal, because the minimum allowed remainder is 10.001 APT, so you’d need 20.001 APT to begin with (plus some for gas fees).
- If you already have at least 10 APT under Inactive Stake (waiting to be unstaked), you can make another unstaking transaction of any size, as long as the remainder is above 10.001 APT. For example, you could unstake 2.8 APT out of the remaining 13 APT.
Once the unlocking period is over, the funds will appear in Available for Withdrawal. From there, you can easily withdraw APT back to the wallet. Click on Withdraw and confirm. Your staking position in My Holdings will be updated.
That’s it - you’ve just learned how to stake APT natively on Liquidswap! Make sure you understand the math of unstaking - and do report any bugs to the Pontem team.
Pontem has many new features in the pipeline for Liquidswap and Pontem Wallet, so follow us on Telegram, Twitter, and Discord for the latest updates!
Pontem Network is a product studio building foundational dApps for Aptos. Our products include Pontem Wallet; Liquidswap, the first DEX (AMM) for Aptos; browser code editor Move Playground; the Move IntelliJ IDE plugin for developers; and the Solidity to Move translator ByteBabel -- the first implementation of the Ethereum Virtual Machine for Aptos.