Moonbeam, a fully Ethereum-compatible parachain on Kusama will complete the last two steps of its public launch on January 11, 2022, which includes:
- Balance transfers and EVM are enabled
- Initialization of the crowdloan rewards
Take-flight participants will have to wait for another 40 days to receive their tokens, on February 20, 2022. If you are among the crowdloan participants, you will receive 30% of your allocation on January 11th, and the remaining 70% will be vested over the Parachain lease (2 years).
Given the bearish current market sentiment, chances are that many GLMR owners will choose to stake their tokens to enjoy the high APY that proof-of-stake networks offer in the stages of their launch.
Currently, the GLMR APY is 505%. Although the APY will fall sharply on network launch, it will remain very competitive for some time. This is because only a small percentage of the GLMR tokens will be in circulation, which will limit the number of tokens that can be staked.
Staking GLMR – key points
Investors should be aware of a few key points on how to stake GLMR.
Minimum stake
The minimum staking amount is 50 GLMR. You will not be able to stake less than that. If you want to split your stake among many collators, you will need to stake at least 50 GLMR with each collator.
Minimum rewards-eligible stake
Even though the minimum amount is 50 GLMR, this does not mean that your delegation will automatically qualify for rewards. To get rewards, your staking amount must be in the top 100 of the collator you chose. You can find the min required staking amount on the official Moonbeam staking app.
The bad news is that this amount is likely to trend upwards, especially during the first days after the launch, so if you have a small amount, you must check daily to ensure you remain eligible for rewards. The good news is that Moonbeam will increase that number in the future.
Unstaking period
If you want to unstake your tokens, you will have to wait 7 days. This is longer than Moonriver’s unstaking period, which is 2 days, but still shorter than Polkadot’s which is 28 days. Moreover, contrary to Polkadot, you will continue to accrue rewards during the 7 days, while your unstake request is scheduled/pending.
Collator choice
Since you will only choose one collator (vs. multiple in Polkadot), you must exercise some extra due diligence to make sure your collator has a good track record and offers a competitive APY. Moonriver collator APY ranges between 15% and 30%, and Moonbeam collator APY is likely to also vary a lot.
You can check the APY of each collator at stakeglmr.com. Keep in mind that the APY will be very volatile during the first month. Collator APY depends on total backing – the more backing, the fewer rewards for each delegator. High APY collators are likely to attract more delegations which will reduce their APY.
Diversified Validator Network (DNV) is inviting users to join, it has a zero-downtime record on Moonriver, writes its own software for monitoring, alerts, and failover, plus shares its tools with other collators.
Risks
There is no risk of slashing as Moonbeam does not impose slashing on staked tokens. The worst that can happen, is that your collator becomes inactive or stops producing blocks, in which case, you will simply not receive any rewards. Note that, it takes at least 12 hours to start receiving rewards after you stake your tokens, due to the 2-round delay for rewards distribution.
So, don’t rush to change your collator if you don’t see any rewards right away!
Understanding Glimmer Staking Rewards
Stakers are sometimes puzzled over the volatility of their rewards, and the fact that other stakers seem to make more than they do, on percentage terms.
It should be noted that no matter which collator you choose, your rewards will vary from round to round, and from one day to the next. This is because Moonbeam is designed to work distribute rewards evenly on average, over the long term.
In the near term, the randomness generator has just not run enough times for the rewards to even out. Having said that, it’s already been discussed that your average rewards will differ based on the collator you choose to stake with.
This is for 2 reasons:
The foremost reason is that staking rewards are computed as a percentage of a collator’s total backing. The larger the total backing (the sum of all delegations), the smaller your percentage of that backing and the less your rewards will be. This means that you should choose a collator with lower total backing, or at least, that you should avoid collators with very large backing.
Second, staking rewards are generated every time a collator signs a block. Although all collators will have the same probability to receive a block-authoring job, sometimes they fail to produce that block in time. This has to do with the collator’s hardware and networking, as well as luck. The fewer blocks a collator misses (the more they author), the more rewards they will generate for their delegators.
Interesting Facts for Moonbeam Stakers
Collator Set
Moonbeam will start with 48 collators and will slowly grow to 75 collators or more. Since Moonbeam is a Parachain on Polkadot, it does not need its own Validators to secure the network.
Instead, Parachains like Moonbeam need a (much smaller) set of collators to produce state transition proofs and submit them to the relay chain. This allows the network of blockchains that is called Polkadot, to scale up with much more efficient use of computing resources.
Network performance
Currently, both Moonriver and Moonbeam are limited in the number of transactions they can run. Since the purpose of both networks is to provide an EVM for other applications, they need to be able to quickly scale up the number of transactions to avoid delays.
The Moonbeam Foundation has been at work to make the binaries more efficient, however, the largest (by far) performance gains will be achieved when the time to author the block is extended from the current 0.5 seconds to 3-5 seconds. This change will be first rolled out to Kusama and then Polkadot.
This news is republished from another source. You can check the original article here