👨‍🏫Staking FAQ

Frequently Asked Questions regarding staking.

What is the difference between staking with a Pool Staking vs Direct Staking?

There are currently 2 main ways to stake DOT or KSM tokens - self-delegation or via Nomination Pool.

A supporting article about Nomination Pools can be found here.

Self Delegation

When you delegate your tokens by yourself, you personally control which Validator nodes your tokens are staked with.

Positives of Self-Delegation

  • In control of which validators your tokens are staked with.

  • Can use staked tokens in on-chain governance votes.

  • Usually automated payouts by Validator

Negatives of Self-Delegation

  • Occasionally, you have to manage your stake in the event that validators are removed from the active set.

  • High barrier to entry (~500 DOT required to earn rewards).

Nomination Pool

Nomination pools allow users to pool their funds together and nominate/stake as a group - this greatly reduces the amount of tokens required to begin staking.

Positives of Nomination Pools

  • Greatly reduces the amount of tokens required to begin receiving staking rewards (1 DOT / 0.002 KSM) (Note: this value is subject to change).

  • Less management is required by the user, as the nomination pool's management team will move the combined stake to a new validator, should their selected validator(s) become inactive.

Negatives of Nomination Pools

  • Cannot use staked tokens in on-chain governance votes.

  • Have to claim rewards and pay transaction fees manually.

What is the difference between "Restake rewards" and "Transferable rewards"?

If you select Restake rewards, then the tokens you receive as a reward for staking will be automatically added (compounded) to your existing stake.

If you select Transferable rewards, then the tokens you receive as a staking reward will not be automatically added to your stake, and you will be able to freely transfer those earned tokens, without waiting for the unbonding period.

What is the unbonding/unstaking period?

The unbonding / unstaking period is determined by each protocol. It is the amount of time that it takes to receive your tokens as transferable balance once you have decided to unstake your tokens.

For example, on Polkadot you will be able to transfer your DOT after 28 days of unstaking them.

Why haven't I received my staking rewards?

The three main reasons for not receiving staking rewards are:

  1. Your validator is no longer active and thus is not producing rewards. You can either wait for your chosen validator to become active again, or choose to nominate another validator. We would recommend selecting numerous validators when staking to help avoid this issue.

  2. Your validator has stopped automatically distributing rewards, in this case, you can claim them manually in Nova Wallet. We would recommend swapping out validators who are not paying out rewards in a timely manner.

  3. You are staking via Pool Staking and must manually claim rewards every so often.

What is "slashing"?

Slashing occurs if a validator shows harmful behaviour - in this event a percentage of their bonded/staked tokens will get slashed as a penalty, meaning they lose them.

If you were actively nominating that validator when the slash occurred, your tokens will get slashed too. This incentivizes good behaviour and at the same time requires that you do your due diligence on vetting the validators you delegate your stake, to be sure that you are aligned with their intentions.

How does Nova Wallet select Validators / Collators?

Nova Wallet selects the top validators based on security and profitability criteria.

Most Profitable

Nova Wallet estimates APY for each validator and selects the most profitable ones.

Not oversubscribed

Oversubscribed validators have more nominators than will be rewarded. Nova Wallet avoids oversubscribed validators in order to minimise the chance for the nominator of not being rewarded in the future.

Have a set on-chain identity

Onchain identity provides the nominator with an opportunity to meet the validator's operator and have a way to reach them in case of problems.

Not slashed

Slashes are punishments for the validator and its nominator for misbehaves (e.g. going offline, attacking the network, or running modified software) in the network. Nova Wallet avoids previously slashed validator to minimize the risk of future slashing.

Limit of 2 validators per operator

To promote decentralization, Nova Wallet limits the number of validators per operator to give space for other operators.

X project's staking is not available in the staking section of Nova Wallet, when will it be available?

Nova Wallet is always willing to work with teams in the Polkadot ecosystem to improve the user experience for our users. Feel free to reach out to us via our social media if you have a suggestion, or use our canny page to leave us a suggestion!

What is Nominated Proof-of-Stake (NPoS)?

Polkadot implements Nominated Proof-of-Stake (NPoS), a relatively novel and sophisticated mechanism to select the validators who are allowed to participate in its consensus protocol. NPoS encourages DOT holders to participate as nominators.

Any potential validators can indicate their intention to be a validator candidate. Their candidacies are made public to all nominators, and a nominator, in turn, submits a list of up to 16 candidates that it supports, and the network will automatically distribute the stake among validators in an even manner so that the economic security is maximized. In the next era, a certain number of validators having the most DOT backing get elected and become active.

As a nominator, a minimum of 100 DOT is required to submit an intention to nominate, which can be thought of as registering to be a nominator. Note that in NPoS the stake of both nominators and validators can be slashed.

Although the minimum nomination intent is 100 DOT, it does not guarantee staking rewards. The nominated amount has to be greater than the minimum active nomination, which is a dynamic value that can be much higher than 100 DOT. This dynamic value depends on the amount of DOT being staked, in addition to the selected nominations.

What are Stash and Controller accounts?

Controller accounts are due to be deprecated in favour of Staking Proxy accounts.

Stash and Controller accounts are a unique feature of the Polkadot platform. The Stash account is a special type of account that holds the funds that are meant to be bonded or staked in the network. This account is used to participate in the consensus mechanism and secure the network.

The Controller account, on the other hand, is the account that manages the actions of the Stash account. It controls the actions of the Stash account, such as bonding, staking, and voting. The Controller account is also used to manage the rewards received by the Stash account.

When we talk about controller and stash keys, we usually talk about them in the context of running a validator or nominating, but they are useful concepts for all users to know. Both keys are types of account keys. They are distinguished by their intended use, not by an underlying cryptographic difference.

The controller key is a semi-online key that will be in the direct control of a user and used to submit manual extrinsics. For validators or nominators, this means that the controller key will be used to start or stop validating or nominating. Controller keys should hold some DOT to pay for fees, but they should not be used to hold huge amounts or life savings. Since they will be exposed to the internet with relative frequency, they should be treated carefully and occasionally replaced with new ones.

The stash key is a key that will, in most cases, be a cold wallet, existing on a piece of paper in a safe or protected by layers of hardware security. It should rarely, if ever, be exposed to the internet or used to submit extrinsics. The stash key is intended to hold a large amount of funds. It should be thought of as a savings account at a bank, which ideally is only ever touched in urgent conditions. Or, perhaps a more apt metaphor is to think of it as buried treasure, hidden on some random island and only known by the pirate who originally hid it.

Since the stash key is kept offline, it must be set to have its funds bonded to a particular controller. For non-spending actions, the controller has the funds of the stash behind it. For example, in nominating, staking, or voting, the controller can indicate its preference with the weight of the stash. It will never be able to actually move or claim the funds in the stash key. However, if someone does obtain your controller key, they could use it for slashable behaviour, so you should still protect it and change it regularly.

In summary, the Stash account holds the funds that are used to participate in the consensus mechanism and secure the network, while the Controller account is used to manage the actions of the Stash account. These two types of accounts work together to provide a secure and efficient way for users to participate in the Polkadot network.

Why have my staking rewards changed / staking APY has changed?

Note: As a non-custodial wallet solution, Nova Wallet does not have any influence over the returns from staking – this is all handled by the specific blockchain protocol you are staking on.

There can be multiple reasons why your staking rewards have changed day-by-day, or why the staking APY has changed:

  1. How validators you are staking with are performing – if a validator starts to perform less optimally, then their APY will lower as a result.

  2. Overall staking rate of the network – as the total amount of stake deviates from the network's ideal staking rate, the APY will change.

  3. Blocks per round – your validator / collator may have validated fewer blocks than normal in the previous round, this can be due to the validator's performance, or simply due to how the network allocated the work between the validators.

  4. Rewards may vary each day, but over a longer period of time (say 30 days) the rewards should average out to correspond to the APY.

  5. Validators you selected a long time ago may no longer be performing optimally – it is good practice to adjust your validators every month or so to ensure you are getting the best rewards.

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