FAQ

All you need to know about staking SWTH

How can I start staking?

1. Select a trusted validator

Stake your SWTH with validators that are eligible for staking below.

2. Stake SWTH

Enter the amount of SWTH tokens you want to stake. Buy or deposit SWTH into your wallet.

3. Start earning rewards

You will receive rewards every second from your staked assets.

What does it mean by staking my SWTH?

Staking SWTH is the process of locking your SWTH tokens to support the security and operations of the Carbon protocol. Only validators who run a full node can participate in consensus by voting on and committing new blocks to the Carbon side-chain. As not everyone can run their own nodes, by locking your SWTH with one or more validators of your choice, you assign the intrinsic voting power of these tokens to the validators, who will act on your behalf.

This process is also known as bonding or delegating.

What does the 'Bonded' or 'Unbonding' status mean?

Bonded refers to the state in which your SWTH tokens are successfully staked and earning block rewards.

Unbonding refers to the state in which your SWTH tokens are unstaked, but remain non-tradeable and non-transferable as an earlier unstaking action has been executed.

The unbonding duration for SWTH is 30 days. During those 30 days you will not earn any rewards.

Important note:

• When you transfer your staked SWTH tokens (redelegate) from one validator to another (via the 'transfer' button), your bond is switched immediately. You will continue receiving rewards.

• You will still incur slashing penalties if your previous validator has committed a fault within the 30 days.

• Staked transfers can only be done ONCE per target validator every 30 days. This means that your staked SWTH tokens cannot be transferred from a new validator for 30 days after your last redelegation.

What are the rewards for staking?

Staking rewards consist of -

• “Block Rewards”, which are SWTH tokens generated by the protocol with each block through an inflation curve.

• “Fee Rewards”, which are the fees that traders and other network participants pay for using the network.

All rewards are distributed in proportion to the amount staked.

More details can be found here.

Is there a minimum staking amount?

There is no minimum staking amount. However, there is a network fee of 1 SWTH (or its equivalent) per staking transaction.

Is there a minimum staking period?

There is no minimum staking period. However, there is a 30 day unbonding duration should you wish to unstake your tokens. During this period, rewards will not be accrued to you.

What are the risks associated with staking?

Staking SWTH earns significant rewards but is not risk-free. SWTH delegated to a validator can be partially slashed if the validator misbehaves. Slashing means the delegated SWTH are forfeited (burned) without the possibility of recovery. On the Carbon blockchain, the following attributable fault can lead to slashing events for the delegated SWTH:

• Slashing by 0.1% can occur if the validator is offline for too long. Uptime is achieved when the validator signs at least 3,600 out of the last 36,.000 blocks. If a validator does not sign minimum 3,600 (>10%) blocks out of the last 36,000 blocks, a downtime slash occurs.

• Slashing by 5% can occur if the validator signs two different blocks at the same height (double-signing). This fault is harder to anticipate, resulting from bad operation practices or outright malicious intent from the validator operator.

When you delegate your SWTH to a validator, select a trusted validator to prevent slashing from these faults.

What happens if a validator commits a fault?

Staked tokens will be slashed by:

• 5% when a validator is faulted for a double sign.

• 0.1% when a validator misses more than 10% of its blocks in a 36000 block window.

To protect SWTH stakers from further losses, the validator who commits a fault will be “jailed” and will only be able rejoin the network after one hour. Rewards will not be earned when the validator is jailed.

When the validator is unjailed, all existing staked tokens will remain staked to that validator, unless the staker decides to transfer or unbond their tokens.