Staking is a contract created to manage an active validator set.
It implements delegation logic that allows users to vote for the best validators. It brings decentralisation into blockchain and allows users to gain rewards by voting for the most honest and stable validators. This is because the Annual Percentage Rate (APR) primarily depends on the stability of the validator.
The staking contract is fully compatible with the original Parlia’s validator set contract.
Staking is an integral part of the consensus mechanism. Likewise, the Chiliz Chain depends on a robust structure of validators that help in reducing gas fees and shorten block time. A common consensus mechanism used by blockchains is based on Proof of Stake (PoS).
Staking allows CHZ holders to contribute to the network by locking their assets on the chain. There are two different roles in staking, namely Validators and Delegators. They are also the participants in the Chiliz Chain staking model.
Validators must run a node and stake a large amount of native tokens to create and validate blocks.
Delegators are able to contribute to a validator's staking pool with a much lower amount of tokens, allowing communities with fewer CHZs to participate in the network.
The reward for each block comes from the gas fees spent on all transactions in the block. These rewards are then split between three entities:
- The validators who created the block,
- The delegators of the same validator's pool,
- and the network.