Stake DOT with Kiln, enterprise-grade staking
What is Polkadot?
Polkadot is a shared protocol providing interconnectivity and interoperability between blockchains. The native token of the Polkadot blockchain is DOT. Using shards, Polkadot aims to make a scalable and interoperable protocol based on parachain technology. This allows applications built on Polkadot to communicate in a fast and secure way.
What is staking?
Proof-of-Stake (PoS) protocols rely on staking to validate blocks. Staking is the process of locking up native tokens to secure a chain and earn rewards for it. Due to its eco-friendly and more efficient approach to the consensus process, PoS has become the most utilized method of securing blockchains.
By locking a protocol’s native tokens (ie DOT) to give “validators” the right to secure a chain. Validators propose new blocks or attest other validators’ blocks, gaining rewards for doing so.
Why should you stake your assets?
Staking offers a forecastable and consistent return on investment. It is seen as the most stable way of creating value as it relies on the intrinsic processes of inflation built into a chain’s native currency. When staking DOT you can help keep the chain safe and make a reliable return on your investment.
If you do not stake, your assets will be eroded from protocol inflation.
- Put your treasury to work
- Diversify and earn, while contributing to blockchains decentralization
- Bring new opportunities to generate safe yields to your users
How to stake Polkadot with Kiln?
The minimum you will need to stake DOT is 10 DOT. Select the Account you want to stake on and the amount of DOT and connect your wallet:
- Login to the Kiln dashboard
- Initial Stake by selecting your Account and the amount of DOT
- Connect your wallet: Polkawallet, Ledger, Atomic wallet, …Kiln supports multiple wallets as well as WalletConnect
- Delegate Stake
- Rewards will be claimable after the end of each era (24 hours).
The unbonding period for DOT is 28 days, however, as rewards are not automatically re-staked, they will appear in your wallet every time they are distributed.
What are the rewards associated with staking DOT?
Stakers and delegators receive rewards once every 24 hours based on blocks that their stake helped to produce. These account for a return of 14.58% APR* in staking rewards, according to the proportion of the stake you commit to your validator pool.
Why should you stake your DOT with Kiln?
Kiln is the leading enterprise-grade staking platform, enabling institutional customers to stake Polkadot, and to whitelabel Polkadot staking functionality into their offering. Kiln offers a wide range of coins to choose from and benefits from staking options. For DOT specifically, these include:
- Staking DOT in 1 click
- 99% uptime guarantee
- Management of all your DOT stakes and rewards from a single dashboard
- Non-custodial, work with your existing custodians DOTutions e.g.Fireblocks
- SOC 2 certification and Industry leading SLAs (0 penalties recorded and 99.95% effective uptime)
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Stake Polkadot FAQ
What does Proof-of Stake mean?
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.
What is the difference between PoS and dPoS?
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.
When will I receive DOT rewards?
DOT rewards are claimable every era (24 hours) from blocks that your stake contributes to the validation of.
Does the interest compound when staking DOT?
The Polkadot network does not automatically compound when staking DOT. These rewards will need to be re-staked every time you earn them.
What are the risks associated with staking DOT?
The Polkadot network implements a slashing penalty for any attempts at double signing, other penalties occur for downtime. Slashing penalties vary depending on the severity of the malicious activity that are presented by the validator, and can be as high as most, or all, of the staked and nominated tokens.
For validators that are unresponsive for more than four hours, the penalty is called a ‘chill’ where validators lose their nominators and the chance to validate until further addressed.
Is there a minimum and maximum amount to stake for Polkadot?
The minimum amount when staking DOT is 10 DOT; receiving rewards for staking, however, depends entirely on the amount of staked DOT you contribute. The more DOT you stake, the greater the chance of earning rewards.
Do I maintain custody of my DOT tokens? Is DOT staking non-custodial?
While you may self-custody your staked DOT (ideally using a Ledger hardware wallet), you may choose a third-party custodian to control the withdrawal of your staked DOT (ie Fireblocks).
What is the lockup period to stake Polkadot? When can I unstake and withdraw my DOT?
Once staking DOT, an unbonding period of 28 days will be required before your assets appear back in your wallet. Rewards are not automatically re-staked, they will be sent to your wallet as soon as they are distributed.
How rewards and penalties work?
Every slot the 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.
What is the average block time on Polkadot?
The average block time on Polkadot is ~ 6 sec.
What is an Annual Percentage Rate (APR) and how is it different from Annual Percentage Yield (APY)?
APR, or annual percentage rate, is the fixed interest rate earned on an investment over a one-year period. It is the percentage of return investors can expect to receive on their investment. On the other hand, APY or annual percentage yield, takes into account the compounding of interest on a fixed schedule. It includes both the interest earned and the interest on previously earned interest.
When it comes to PoS protocols, compounding does not always apply as additional validators can be needed to stake more. Therefore, APR is used instead of APY. It's worth noting that APY and APR cannot be compared directly, as they measure different things. However, it is possible to convert APR to APY and vice versa.
Where can I learn more about Polkadot?
There are many existing resources but we invite you to visit the Polkadot website and to check our latest articles on our blog.