Go to delegations-helper.skale.network/delegations and connect your wallet
Go to delegations-helper.skale.network/delegations and connect your wallet
Enter the amount and click on Delegate
In the SKL Tokens section, expand the Select Validator dropdown, and select Chorus One
Approve the transaction in your wallet/ledger to start staking.
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The SKALE Network serves as a custodial execution and storage layer (Layer 2) for the Ethereum mainnet. Whereas non-custodial approaches use a system of fraud proofs to allow funds to move between chains, SKALE makes use of BLS threshold signatures, deposit boxes within the Ethereum mainnet, and other mechanisms to allow for custodial ownership and use within the network (which allows it to inherit security guarantees from the Ethereum mainnet but provide the performance inherent in a Layer 2 solution).
The stakes from the validators, developers, and the token inflation, are coordinated through SKALE Manager contracts on Ethereum mainnet and SKALE nodes in the SKALE Network.
This approach is different from other Layer 2 models that attempt to use mainnet interactions to run verification or fraud proofs. SKALE uses the Ethereum mainnet for staking and other mechanistic operations in a way that's better attuned to creating a robust and trustworthy Layer 2 network. SKALE will also support BLS Rollups for use cases that require complete reliance on Ethereum Mainnet custody.
SKL is a utility token that serves as a fundamental mechanism in the security of the network. A significant amount of tokens are staked into the network by validators and delegators as provided by chain sponsors for the provision of SKALE chains. The four primary functions of the SKL token include:
Security of and staking in the network
SKL token holders (delegators) stake their SKL tokens to validators who run nodes that make the SKALE network function by validating blocks, executing smart contracts, and securing the network. They're rewarded with SKL tokens for their efforts.
Sponsorship of SKALE Chains
Developers, DAOs, and other chain sponsors provision their subscription access to SKALE Chains using SKL tokens. SKALE Chains can be provisioned in several sizes and durations with larger chains and longer durations necessitating larger deposits of SKL tokens.
Rewards for validators and delegators staking their tokens
Validator and delegator rewards are accumulated on a monthly basis, based on developer stake for chains and monthly inflation of tokens.
Governance and voting
SKL tokens are intended to be used for onchain voting as the means to control all economic parameters of the SKALE Network.
More details about the SKALE token are here: https://skale.network/token/
The process for governance proposals is still under development. Look for future updates in the announcement channels as well as on telegram here https://t.me/skalefoundation.
The Product Team is working on the plans, see the current roadmap here.
Each SKALE Chain comprises a collective of randomly appointed virtualized subnodes that run a containerized SKALE EVM-client daemon (skaled) and SKALE ABBA-based consensus algorithm. Nodes in the SKALE Network aren't restricted to operating a single chain but instead can support multiple chains via virtualized subnodes. This multiplex capability is made possible via a containerized subnode architecture deployed on each node in the network. Each node is virtualized and can participate as a validator via this subnode architecture for an independent number of sidechains. Chains sizes can be small, medium, or large, with a small chain using 1/128 of a node's resources, a medium using 1/8 of the resources, and a large using the total amount. Medium SKALE chains are available at present but the other sizes will be made available in the near future.
The subnode virtualization is enabled via an innovative containerized architecture that provides industrial-grade performance and optionality for decentralized application developers – performance and flexibility that's similar to traditional centralized cloud and microservice systems. Containers are divided into several main components encapsulated via a dockerized Linux OS, allowing each node to be hosted in an OS-agnostic manner.
The governing body for the network is the N.O.D.E. Foundation. The Foundation believes that validators must play a primary role in policing. Given their responsibility to the network, validators are highly incentivized to act in their best interest in guarding and preserving the integrity of the network.
The Network of Decentralized Economics (N.O.D.E.) Foundation based in Liechtenstein has been created to carry out the mission of supporting the SKALE Network. The SKALE Network is designed to support businesses, people, organizations that run on the open internet.
The SKALE Network is governed by its code which includes the SKL token. Onchain voting will be required to change any economic principles of the protocol.
The Foundation will support the network by electing a diverse set of Network Representatives. These representatives will ideally comprise dApp developers who run SKALE Chains, validators who run SKALE Nodes, independents such as investors who helped kickstart the network economics, and developers/representatives that actively build, maintain, and evolve the codebase. These representatives will serve the community by facilitating on-chain voting, grants, and budget/treasury decisions. The representatives will be selected by the Foundation initially; however, future elections will be held via a variant of on-chain voting by token holders to choose representatives that facilitate on-chain voting.
Ten percent of the total pool of SKL tokens is allocated to the Foundation and is vested over seven years to provide it with a budget and resources to fulfill its mission.
The SKALE Network consists of a large pool of validator nodes, all running concurrently and independently, validating transactions within the SKALE Chains they oversee. These nodes coordinate with a set of smart contracts that run on the Ethereum mainnet called SKALE Manager. SKALE Manager includes SKALE Token that governs its issuance and how rewards get distributed to validators and delegators.
Developers request a specific size chain (small, medium, and large), chain duration (180, 365, 730 days i.e. 6, 12, 24 months), and then stake SKL tokens to complete the provisioning of the chain. These tokens get staked into SKALE Manager on the Ethereum mainnet. Each month, a set portion of tokens from this developer's stake move into a bounty pool which is then used to reward the validators and delegators within the network. An inflation event occurs each month whereby new SKALE tokens are created, which gets pushed into the bounty pool for reward to validators and delegators.
For example, suppose there are a thousand validator nodes in the network and they all perform in accordance with the service parameters. In that case, they will each participate in the monthly proceeds from the bounty pool, which includes a portion of the SKALE Chain token stakes plus the inflation/issuance amount. Note that the distribution to the validators isn't necessarily shared equally as there is a modifier component that adjusts the payout based on the stake duration. Nodes with tokens that are locked for twelve months, for example, will receive a greater percentage than those locked up for three or six months.
A SKALE Chain is an Ethereum native and Ethereum-compatible chain that provides developers with increased scalability, faster throughput, and zero-gas transactions over Ethereum mainnet transactions. SKALE Chains provide EVM compute power, decentralized database storage, and other functionality to help not only power dApps but allow them to scale in a cost-efficient manner. The SKALE Network unique Proof of Stake model and operational ties with the Ethereum mainnet provides the security guarantees of Ethereum with the performance and cost efficiency of a Layer 2 solution.
Staking your SKL via the Activate platform and Metamask involves three main steps:
Visit the Consensys Activate homepage and click “Sign Up” in the top right corner. Fill out the required information and make sure to choose a strong password for your account (Required: Minimum 8 characters, 1 number, 1 special character, 1 lowercase, 1 uppercase).
You need to verify your eMail address via a confirmation mail that is sent to you right after you filled out the required information. Click the link in the eMail and sign in to your newly created Activate account.
After your first login, you are asked to provide additional information and pass a KYC in case you want to participate in future token sales that are conducted via the Activate platform. You can either do this right away or come back to it later by visiting the “Your Profile” section in the upper right corner of the Activate UI.
The first step to staking your Skale is creating an Account on the Activate Platform
Visit the Activate main menu by clicking the icon in the upper left corner. Then click on Connect Wallet and choose Metamask (you can also use Metamask with a Ledger Device). You will now see your wallet address in the upper right corner.
Connect your Activate Account with your Metamask Wallet with just a few clicks
In case you do not have any SKL token in your account, make sure to properly fund it before you continue. Simply copy your address by clicking on it. Then send the SKL to it that you want to stake.
After you fund your account, visit the Staking page on Activate. Here you will find an overview of available validators that are active on the Skale network.
Fund your account and then visit the “Staking” menu
To start the staking process, click stake next to the validator of your choice. Read through the displayed information and then click Stake my first SKALE tokens.
Now choose the amount of your SKL that you want to stake as well as a staking period (currently only 2 months is available). Please note that you need to stake more than 100 SKL and that your staked funds are locked and illiquid for your entire staking period. Once you read through all the information, click Continue. In the subsequent window, click Stake [your amount] SKL to Chorus One.
Your stake will become active by the beginning of the next epoch (first of every calendar month) and once your delegation is accepted by your chosen validator. Once your transaction is confirmed, you are presented with a summary of your staking request.
Please note that you need to stake more than 100SKL
And that’s a wrap! You are now helping to secure the Skale network for which you earn rewards. Congratulations and welcome aboard our Skale validator, good to have you with us!
There are a few things to keep in mind when staking on the Skale network. Within the Activate UI, you can manage most of your staking operations within the “Token Inventory” submenu of the “Staking” page.
Most staking operations are performed in the “Token Inventory”
In the Token Inventory menu you find an overview of how your funds are constituted. At the bottom of the page, you can find an overview of your staking operation. Please note that once you staked your SKL, the stake will become active in the subsequent epoch and will remain locked for the entire staking period. The validator you chose to stake with has to accept your delegation.
The Token Inventory provides you with an overview of your staking operations
Epochs are units of time within the Skale network. They equal a one-month calendar period of network activity. They always start on the 1st of each calendar month. Rewards for validators and delegators are distributed at the end of each epoch and you are able to claim them within several days after the end of the epoch. Please note that claiming your rewards incurs a transaction fee, so make sure to have enough ETH in your wallet to cover the fees. Your rewards do NOT expire and you can claim them whenever you please. To claim your rewards, visit the “Token Inventory” and click “Claim [x] SKL”. Approve the transaction in the Metamask pop-up window and, in case you are using a ledger, sign the transaction on your ledger device.
How you can claim your Skale staking rewards
The default setting of your staking operation is set to “Auto-renew”. This means that your staking period is automatically renewed for the same period as you initially choose. Hence, your tokens are automatically re-delegated to your chosen validator at the end of your delegation period. You can always choose to stop this by visiting the “Token Inventory” and switching the button next to Auto-renew?.
Note that this will incur transaction fees that you need to cover. Make sure to stop the auto-renewal a few days before your staking period ends. Also, note that this cannot be reversed. Make sure to turn off “auto-renewal” in case you want your funds liquid after your staking period
It’s been over 2 months since the decentralization of the SKALE Network ( mainnet phase 2) began. With an unique approach of requiring participating investors to stake a minimum of 50% of their tokens for a period of at least 2 months ( Proof-of-Use), the SKALE team focused on attracting long-term supporters of the project, as opposed to speculators looking for a quick flip.
In this post, I want to take a look at a snapshot of the on-chain data that shines light on how SKL holders are engaging with the network now that the Proof-of-Use period has come to an end.
SKL is an ERC-777 token (backwards compatible with ERC-20), so information about it is available on Etherscan. We can see that there are 4,083,530,877 SKL tokens, which are held by 3,903 different addresses. 166,857,860, or roughly 4%, of those were sold in a public sale through the Activate platform. For a detailed breakdown of the supply and associated lockups, check out this 1-pager.
I want to start this analysis by taking a look at token transfers. Visualizing the transaction counts and amounts, we can clearly see how the initial tokens were distributed to investors leading up to the phase 2 mainnet launch on October 1. We can also note an uptick in activity when the first SKALE staking period ended Dec 1 (as of now, tokens can only be staked for periods of 2 months). At this point, the first tokens unlocked and the SKL token gets listed, e.g. on Binance. On Dec 1, 6,358 transfers were carried out moving 267m SKL, or around 6.5% of the supply (see chart). Right after, activity declined significantly with on average around 500 transfers happening per day during the past week.
Looking at the total stake in the network, which e.g. can be found here, we see that the overwhelming majority of tokens are involved in staking. 74.5% of all tokens are delegated, which places SKALE in the company of established networks such as Cosmos (71.42%) and Tezos (79.44%, see Staking Rewards). In terms of addresses that are involved in staking, we see that there are 1,167 unique delegators. 30% of all addresses that hold the SKL token are also staking.
Furthermore, one may wonder how many SKL tokens have been unstaked or are planning to unstake at the next boundary (Feb 1). The official dashboard shows 112m SKL (~3.7% of the currently staked supply) have been unbonded after the first staking period. So it seems like a majority of token holders plan to continue staking (it should be noted that a majority of token holders like the foundation, team, and early investors have longer lockup periods and cannot transfer their tokens yet).
Generally speaking, the interest in staking seems to remain high. While this amount will likely increase as the month continues, we can currently see that 15m SKL tokens plan to unstake at the next boundary (Feb 1). This is three times as much as new delegations that are coming in (i.e. accepted and proposed), which amount to around 5m SKL tokens at the time of writing. If we assume constant growth and that this ratio will remain until the end of January, then the staked supply would decline by roughly 80m, which would barely impact the staking ratio.
There are currently 47 validator organizations running a grand total of 152 nodes, whose resources are distributed across elastic SKALE-Chains. The average reward per node, which is split between the node operating entity and its delegators, is 211,075 SKL per node. With 152 nodes, this means the SKALE Network is currently paying out 32,083,400 SKL (or 1.04% of the supply) per epoch.
Using the median commission rate across validators of 12%, this means the average SKL delegator is currently earning 0.9152% per month on his SKL, translating to an APR of 11.55% (including compounding).
Looking at the stake distribution among nodes, we can see that a majority of the stake is controlled by a small subset of validators with only 3 of the 47 entities controlling right about 33% of the stake (see chart).
SKALE’s design seems to have successfully incentivized an engaged base of holders that are interested in supporting the project through staking. Nevertheless, it should be noted that the project is still in a very early phase of decentralization, which can be seen both by looking at the token distribution among addresses (the top 100 addresses hold a majority of all tokens), as well as in the stake distribution across validators. For more on the importance of censorship resistance in Proof-of-Stake, check out e.g. this thread by the Solana team.
Chorus One is offering staking services and building protocols and tools to advance the Proof-of-Stake ecosystem.
We are an active validator on the SKALE Network. Support our work by delegating to us. Learn more here.
Website: https://chorus.one
Twitter: https://twitter.com/chorusone
SKALE is an elastic blockchain network that gives developers the ability to easily provision highly configurable fully decentralized chains that are instantly compatible with Ethereum. SKALE chains can execute sub-second block times, run up to 2,000 tps per chain, and run full-state smart contracts in addition to decentralized storage, execute Rollups, and machine learning in EVM.
Website: https://skale.network/
Twitter: https://twitter.com/skalenetwork
Originally published at https://blog.chorus.one on December 10, 2020.
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