Staking On The Matic Mainnet Has Gone Live
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Staking On The Matic Mainnet Has Gone Live

By Brennan | Crypto Stories | 2 Jul 2020


On June 29th, Matic announced that staking had gone live on their mainnet. Token holders can now delegate their ERC-20 MATIC tokens to validators and earn rewards for helping to secure the network.

Matic is a second layer sidechain to Ethereum, engineered to provide scalability to the often overburdened mainnet. The slow confirmation times and high gas fees on Ethereum have been obstacles for developers who want to design secure, yet responsive decentralized applications. Some Ethereum-based gaming projects have already announced partnerships with Matic, including Decentraland and The Sandbox.

The project implements an adapted version of Plasma, a framework that allows the creation of sidechains that send periodic checkpoints to Ethereum. In addition, Matic uses the Proof-Of-Stake consensus algorithm and limits the number of validators on the network. These optimizations enable transactions to be executed much faster and at a significantly lower cost, while still benefiting from the security of being finalized on the Ethereum mainnet.

Token holders who wish to delegate their tokens can do so by following the official staking guide on Matic's technical blog. Currently there are a total of seven validators to choose from, all of which are under the control of the Matic Foundation. The option to become a validator is still unavailable at this time.

Validators are essentially high-performance servers, often managed by small businesses, that are responsible for verifying user transactions and producing blocks. In exchange for their services, they are awarded tokens by the network so long as they perform well and do not misbehave by, for example, double-signing a block.

Delegators are token holders who do not have the resources to run their own validator, but assign their tokens to existing validators in exchange for a portion of their rewards. The validators who are assigned the most tokens end up producing the blocks on the network.

There is some risk involved for delegators who assign their tokens to a validator. For example, if an elected validator misbehaves or performs poorly, the delegators who voted for them may lose a portion of their tokens as a penalty, also known as "slashing". Therefore, it is in the delegator's best interest to research and elect trustworthy and reliable validators.

Using an Ethereum wallet such as Metamask, delegators can now assign their MATIC tokens to one or more validators. For example, out of a total of 5000 tokens, 2500 could go to "Node 1" and 2500 could go to "Node 2". If a delegator decides to unbond tokens from a validator there is a waiting period of 21 days before the tokens are returned to the original Ethereum address. A gas fee must be paid (in Ether), sometimes worth several dollars, to stake and unstake the tokens.

In the next phase of its mainnet launch, Matic will open up the network to external validators in order to start decentralizing the network. The organization reportedly already has several high-profile partners waiting to be onboarded.

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Brennan
Brennan

Interested in computer science, economics, democracy and monetary theory. Supporter of projects that aim to bring more economic freedom to the world. Hoping to share knowledge that would help others navigate the crypto space.


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