How to stake Ontology (ONT)
Disclaimer: This is NOT financial advice and should not be taken as such. Not guaranteed to be correct or continue to be correct. Do your own research.
This is a stripped down cross-post from my original on Medium.
Ontology (ONT) recently enabled staking in mid Oct 2018.
- Minimum to start is 500 ONT.
- You can stake more in multiples of 500 ONT.
- You stake by locking ONT in a smart contract, which generates ONG (Ontology Gas).
- Staking proceeds in rounds, each round lasting 120,000 blocks. Staking rewards can be claimed after each round.
- You can cancel staking any time to retrieve all the tokens, but they will be locked until the end of the current round or until the end of the next round depending on the node (more below).
- Both ONT and ONG are tradable on Bibox.
Staking is the process of locking up some tokens in return for some passive returns. In ONT’s case, each stake is in multiples of 500 ONT (ie, the minimum to start is 500 ONT, at pixel time that’s ~USD900).
The first round of staking officially started in mid Oct 2018, so it’s still in its early stages, and lots of information are still not documented properly. That being said, this is a good chance to start staking and getting familiar because 1) you get to be part of it from the early stage and can potentially influence the staking mechanism, 2) prices are still low and 3) not many are doing it yet so you might get a bigger share (compared to when it’s more mature)!
How to Stake
- First, you need to have at least 500 ONT. Buy some from an exchange. Make sure you factor in the exchange withdrawal fee! ONT is available on Bibox and Binance, but I recommend Bibox because the withdrawal fee is much lower (at pixel time).
- I highly recommend buying some ONG as well (I recommend ~1 ONG) and send to the wallet. This is to cover the transaction fees required during staking. This is another reason I recommend Bibox; Binance has not enabled ONG trading at this time.
- Send ONT to an Ontology wallet whose private key you control, such as on a hardware wallet.
- Download OWallet, an Ontology desktop wallet compatible with hardware wallets like Ledger, Trezor etc.
- Open OWallet and follow the steps here. In short: Go to “Node Stake” > “Stake Authorization” > choose a node > connect wallet > “Submit new stake authorization” > input number of stakes (each stake is 500 ONT) > click Submit > verify that “In authorization” reflects your stake > Tada! You’re set up for staking.
- Note: you won’t actually be staking until the next staking round starts. You can see how many blocks are left in the current round in the “Stake Authorization” screen.
There’re a bunch of questions I had when trying to stake so I’ve documented the answers below. The answers are from multiple sources (telegram, medium) but please verify them yourself as it could have changed. (My list of references are at the end of this article.)
I’ve done the steps but how do i know my ONT is in staking?
After selecting a node in “Stake Authorization” screen, you should see your stake in “In authorization”. Your stake will automatically activate when next round starts. You won’t see the reward until the staking round ends.
Your stake will continue to be active, with the same node, until you cancel it, or if the node drops out.
There is also a “My Stake” button, clicking it shows you all the stakes you currently have and is a nice place to get a summary of your current stakes. Note: If clicking it brings you to a blank screen, or a screen seemingly showing no stakes. Don’t panic! You might just need to update your OWallet.
Do I need to restake every round?
No, your stake will continue to be “in authorization” unless the node drops out or you cancel.
How do I cancel my stake?
Back in the “Stake Authorization” screen, choose the node you’ve staked with and click “Cancel stake authorization”. Please read the chunk below first!
Your stake will be locked until the end of the current round, and will continue to generate rewards until the end of this round. Note: If you stake under a consensus node, you will have an additional lockup of 1 round without additional rewards. Plan ahead.
Do I still get generated ONG while staking?
Yes but they will show up and be redeemable in the “Stake Authorization” page instead. It will be lumped with the staking ONG returns and shown under Redeemable section.
What nodes are available? How do i choose nodes?
The nodes available to choose from are either consensus or candidate nodes that have enabled public staking. They will appear in the “Stake Authorization” page. Each node also shows the % they will distribute to the stakers (1: Reward proportion for others), as well as how many ONT is staking with them (2: Current total stake).
The return for each node is therefore different. In general, you’d want to choose the node that has higher reward proportion (so that the pizza is bigger) and lower current total stake (so that each slice is bigger). If you have 2 or more stakes, telegram community members have recommended splitting them between different nodes to average out the returns.
How long does each round last?
Each round lasts 120,000 Ontology blocks. Each block range from 1 second (if there are transactions) to 30 seconds (if there are no transactions). So each round can range from 33 hours to 42 days.
The first round started at block 534,100. Round 1 took 9 days and round 2 took 2 days.
What are the returns?
By staking, you earn rewards from:
- Regular ONG generation (this is the same even if you’re not staking)
- Fees from basic consumption of the entire chain network system (network fees, storage fees, smart contract fees, and fees from other services)
- And for the first 3 years, additional ONG from the Ontology Foundation Bonus.
The actual returns are calculated in another article here.
What is the Ontology Foundation Bonus/Reward/Airdrop?
Nodes will receive 10,000,000 ONG per year for the first three years from the community incentives allocation. This will be distributed to stakers. However, there is a requirement:
- Stakers must maintain their stake in a node for the entire calendar month to receive Ontology Foundation rewards for that month. You will receive this portion directly to your wallet.
That means you will have to be staking continuously from the 1st of the month to the 1st of the next month (ie, a full calendar month). In practice, this means you have to enter the round before the month starts and stay on until the month ends or beyond.
Do I need to keep my computer turned on 24/7? What are the computer/machine requirements for staking?
No, you don’t have to. Other than OWallet, there is no other software to install. You also don’t have to keep OWallet or your computer turned on.
In short: just doing the steps above will suffice. Life goes on as usual.
Is my ONT safe when staking?
In short, yes. Once you’ve started staking, your ONT will be transferred to a smart contract and locked until you cancel. If a node is blacklisted you will not lose your ONT. In such an event the authorised stakes from all users staking with the node will be returned.
It says I have insufficient ONG!
All Ontology transactions costs 0.01ONG right now, including starting a stake and redeeming ONG. If you don’t have enough, either buy some and transfer to the wallet (listed on Bibox), or ask someone to donate. There is also a ONG faucet here (I am not related to the developer).
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