This is our third article in an on-going series to educate the crypto community about Terra, a blockchain project focused on becoming a stablecoin market leader through widespread adoption of its stablecoin.
What is Redelegate and Why Do It
Firstly, what is Redelegate? Redelegate is essentially a feature on Terra Station for stakers to move their LUNA stake from one validator to a different validator.
The reasons why stakers redelegate are mostly covered in an earlier article How to Choose a Validator on Terra. As a quick recap, those factors are mostly financial (staking rewards and slashing of stakes) or decentralisation-based (blockchain integrity and voting power).
Interestingly, after the publication of our last article, Do Kwon tweeted that an upcoming airdrop by Nebula Protocol will not be granted to any stake delegated with the top-5 validators on Terra. So if you have LUNA staked with a top-5 validator, there is now a strong financial incentive to Redelegate and move your stake to a different validator outside of the top-5.
Redelegate <> Undelegate
One important distinction to make is that Redelegate is NOT the same as Undelegate. Undelegate (or to unstake) is an action you choose only if you wish to remove your LUNA from staking altogether.
Furthermore, Undelegate is subject to a 21-day lockup period and during this lockup, you cannot do anything with your LUNA that is undergoing unlocking e.g., if you intend to transfer your LUNA to a different wallet, you will have to wait till this lockup period is over. Crucially, you would not enjoy any staking rewards, including airdrops, during this lockup period.
Therefore, if the plan is to continue with staking, and you simply wish to switch to a different validator, use Redelegate instead to continue accruing your staking rewards and airdrops.
While there is no time constraint applied when you first attempt to redelegate any staked LUNA, you should be aware that the redelegated LUNA stake may not undergo a second Redelegate action within 21-days. So DYOR before committing to any redelegating decision.
How to Redelegate
First go to Terra Station and select Staking to the left of the screen.
Next, choose the validator that you wish to redelegate some of your LUNA stake to. This could be a completely new validator for you, or an existing validator that you have already staked some LUNA with. In this example, we assume you wish to redelegate your stake to AuraStake.
A new window should pop up that shows a Source field indicating My Wallet by default. Click on the dropdown, and you should be able to see a list of existing validators that you have delegated some LUNA with.
Starting from Delegate...
Select the validator that you wish to Redelegate your LUNA away from. Say we choose SGTerra.
You should now see that the window header changed from Delegate to Redelegate. Key the amount that you wish to reduce your LUNA stake by, and click Next.
Finally, click Redelegate. Depending on how you store your LUNA, you may also be prompted for a password beforehand.
You have now successfully Redelegated your staked LUNA from an existing validator!
This material is written for reference only and does not represent financial advice.