Step 1: Generate Stash and Controller accounts.
This step can be done using a Ledger hardware wallet, or the Polkadot extension.
- Stash Account is a cold wallet that holds funds. It decides how much funds are bonded and has its stored funds bonded to a Controller Account.
- Controller Account acts on behalf of the Stash Account to nominate and validate. It also sets preferences such as payout accounts and commission, and acts as signing accounts that dictates governance.
Step 2: Bond Tokens via Polkadot-JS UI
- Selecting the amount you wish to bond
- Choose payment destinations for reward distribution, such process will be executed with the Controller Key while the tokens will be bonded in Stash key
- If choosing “Stash account (increase the amount at stake)”, reward will be compounded, bonded and hence subject to 28 days of bonding period
- If choosing “Stash account (do not increase the amount at stake)”, “Controller account” or “Specified payment account” for payment destination, reward will not be bonded and will be liquid
- Once bonded, staked principal will be subject to 28 days of bonding period
Step 3: Nominate a validator via Polkadot-JS UI
- A nominator can nominate up to 16 validators
- If run your own validator, you need at least 1.804MM DOT (as of May 2021)
- Once selected validators, nominations will be active in the next era (~24h), which will be the period when validators are elected for block production.
- Only the elected validator and its pool will receive rewards
Step 4: Reward Distribution
- Reward is distributed to validators in each era (~24h)
- Equal block rewards are paid to validator pools regardless of total amount staked in the individual validator pool, meaning pools with less stake will generally pay more to the nominators than pools with more stake. A pool is the term for a validator and its nominators.
- A percentage of the total reward from Blockdaemon’s validator pool is paid to Blockdaemon as commission.
- The remainder is paid proportional to the amount staked by nominators.
- Reward compounds or not
- If you choose payment destinations specified in step 2.b.i, rewards are compounded and subject to a 28 days of bonding period.
- If you choose payment destinations specified in step 2.b.ii, rewards are not automatically compounded, but such settings can change at any point and time.
Step 5: Claiming rewards via Polkadot-JS UI (manual reward trigger and unbond)
- Rewards are claimed and distributed to nominators by the Blockdaemon team once a week.
- You will be able to self claim your rewards more often by using the polkadot-js UI. You will be responsible for paying the transaction fees for the claim, if done this way.
- If you choose to compound reward in step 2.b.i, the selected amount of reward will be subject to a 28 days unbonding period, during which the unbonded DOTs cannot be transferred nor accrue staking rewards.