Osmosis is an advanced automated market maker (AMM) protocol built using the Cosmos SDK. People can use this blockchain to create liquidity and trade IBC enabled tokens. OSMO is the token of the Osmosis Hub. This platform aims to aid in the interoperability solution offered by Cosmos and increase scalability, as well as access to tokens offered across the network.
Proof-of-Stake is a newer form of consensus algorithm that relies on a stake rather than electrical power. This makes it more efficient and environmentally adapted. By offering a stake in the form of locked tokens into a smart contract. This stake is used to secure the chain and validate blocks.
By locking a protocol’s native tokens (ie OSMO) to give “validators” the right to secure a chain. Validators propose new blocks or attest other validators’ blocks, gaining rewards for doing so.
Staking not only earns you a reward but also secures the chain in the process. It is a process that is part of the overall mechanics of a PoS chain. Tokens originate from the inflation of the chain’s native currency. You can help network security by staking your OSMO and also retain rewards in the meantime.
If you do not stake, your assets will be eroded from protocol inflation.
The minimum amount you will need to stake Osmosis is 1 OSMO. You will also need to pay 0.1 OSMO as a transaction fee for delegating your stake to the Osmosis validator of your choice. To stake with Kiln you will need to:
The unstaking period for Osmosis is 14 days, rewards are sent directly to your wallet whenever they are earned.
Detailed information about Kiln validators can be found here.
As an incentive for helping to safeguard the network, you can earn up to 10.58% GRR* from each validator you stake on Kiln. (Source: https://protocolstaking.info/)
Kiln has a strong record of staking Ethereum as well as other cryptocurrencies such as OSMO. It continues to expand its staking options to newer tokens like OSMO and are at the forefront of major network validation. The Kiln platform was even one of the first to stake on the new ETH 2.0 PoS system. Kiln is the leading enterprise-grade staking platform, enabling institutional customers to stake Osmosis, and to whitelabel Osmosis staking functionality into their offering.
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Proof-of-Stake (PoS) is a type of consensus mechanism used to validate cryptocurrency transactions. Through PoS, validators can contribute to the block production of a chain while keeping environmental concerns to a minimum, which is becoming an increasingly large issue in Proof-of-Work.
By staking capital rather than energy, validators risk losing a portion of their value and future potential for staking by misbehaving while creating blocks. This incentivizes collaboration and minimizes malicious activity in the consensus process.
Both are consensus algorithms, helping to democratize one participation to securing a blockchain. Delegated PoS or dPoS means that one validator can stake tokens from several clients. These clients can indeed delegate their tokens to an existing validator instead of running their own.
Validators and delegators receive OSMO rewards after every epoch (daily). OSMO rewards are not compounded and require re-delegation with each block reward you receive.
No, there are no compounding rewards when staking Osmosis, they will need to be restaked with every time they are received.
After 2 hours of downtime, validators can be ‘jailed’, preventing validating blocks until unjailed. Slashing for double signing is 5% of an Osmosis validator’s stake.
There is a minimum staking amount of 1 OSMO to validate blocks and a 0.1 OSMO transaction fee to delegate your stake.
While you may self-custody your staked OSMO (ideally using a Ledger hardware wallet), you may choose a third-party custodian to control the withdrawal of your staked OSMO (ie Fireblocks).
There is a 14 day unbonding period for Osmosis.
For every slot, the Osmosis validator is expected to sign attestations. If submitted attestations are good the validator receives rewards, otherwise it receives penalties. In case the validator is offline it will also receive penalties.
The average block time on Osmosis is ~ 6 sec.
In the context of Proof-of-Stake blockchains, the gross reward rate (GRR) refers to the total or gross amount of rewards earned from staking before deducting any fees or expenses. This is a reward rate that fluctuates with the operations of the protocol and the performance of validators, it is not set by Kiln. The net reward rate (NRR), on the other hand, takes into account the deductions or expenses, providing a measure of the actual rewards received after subtracting fees or costs.