This section introduces you to staking principles and running your validating node.
NEAR Protocol uses Proof-of-Stake (PoS) to secure its blockchain. Validators represent the community of node operators that take care of the blockchain consensus. Technically, the validating nodes are servers that aggregate transactions into blocks, execute them, and maintain the latest state of the blockchain. The owners of these nodes, the Validators, get rewards for their service at the end of every epoch (~12 hours).
All Validators must stake a certain amount of NEAR tokens, which represent a collateral against their dishonest behavior. Staked tokens can't be spent: if a dishonest Validator attacks the blockchain consensus, the protocol progressively destroys their stake (see slashing). Staked tokens can be unlocked anytime, but remain unspendable for three epochs, even after the validating node goes offline or decides to stop validating.
NEAR Protocol automatically picks the best validators with an auction. Anyone running a validating node can participate by staking their tokens. At the end of every epoch, NEAR automatically selects the nodes with the biggest stake, making them eligible to generate new blocks and get rewards. If the stake is too small, the validating node will not receive a validator seat and will work as a normal relay node, waiting for the next epoch (see the market dynamics from the validator economics page).
Validators can increase their stake, thus their rewards, by asking for delegation. Delegation is the opportunity for all token holders to stake in partnership with a Validator, leasing a small portion of their validating node. Delegators can lock their funds into a staking pool, and receive rewards at the end of every epoch, minus the fees paid to the Validator.
NEAR rewards are predictable, and proportional to your stake. The protocol generates new tokens at a rate of ~5% of the total supply (annualized) and most of them are rewards. As an example, if the total supply is 1 billion tokens, and the annualized rewards are ~4.5%, all Validators will share 45 million NEAR tokens (see the economics page for more details). Regardless if you are Validator or Delegator, the bigger the stake you provide, the higher your cut of those rewards.
If you want staking rewards, but you don't want to run your own validating node, spend anyway some time to know NEAR economics and what it takes to become a great Validator. Good starting points are:
- Understand the Economics of a Validator
- Look at the current Validators on the block explorer. Gather information on their reliability, fees and current stake.
- Properly plan your tokens custody, starting from the available custody options.
- Verify what Validators offer to you, asking if they use the staking pool from NEAR Core Contracts, or their own smart contracts.
- If you are proficient with command-line interface, look at the delegation page for a list of low-level commands you can use to stake.
- Join the Validators channels on Discord to ask questions and meet NEAR staking community.
did you know?
NEAR Protocol doesn't punish Delegators. So, if your favorite Validator screws up and get slashed, you will only lose a few rewards, and your stake will remain untouched.
You are decided to see how deep the rabbit hole goes? No worries! NEAR is like many other Proof of Stake networks: keep your servers online ~100% of the time, be always ready to update your node, participate in the community. However, you have important differentiation factors, such as staking via smart contracts; planned protocol upgrades without hard forks; gas fees that burn tokens instead of giving rewards.
You can find additional material below:
- Understand the Economics of a Validator
- Check the basic staking commands
- Deploy your staking pool from the core contracts
You are still here? If you want to learn more about NEAR, have a look at
- The Beginner’s Guide to the NEAR Blockchain to get a high level overview on NEAR.
- The NEAR Whitepaper to see the big picture.
- Economics in Sharded Blockchain to know more about the incentives structure of NEAR.
- Sharding Design: Nightshade to gain a more detailed understanding of the consensus mechanism.
If anything is unclear or you get stuck, please head over to our official chat on Discord, and join the validators section.
Once you open the Discord link above, you must complete an automated verification and enable your role as "validator", otherwise you'll not be able to send messages in the validator channels.
Stake Wars testnet
Stake Wars was NEAR's incentivized testnet for professional validators. This initiative is over, but you can still learn from it.
NEAR’s MainNet is now "community governed" (see full roadmap and the launch blogpost) so any validator can join. However, the network is running on a single shard, temporarily limiting the available slots for validators. As a result, you may need a high amount of tokens (around 1% of the total stake) to have your node elected as a block producer, and receive the rewards.
While the network is getting additional shards and become more accessible for smaller validators, you can still use the Stake Wars repo to understand the techincal needs, test the stability of your system, and learn some of the unique aspects of NEAR’s delegation in preparation for the next phase of the protocol.
If you want to know more about this opportunity, read the "Stake Wars is Over, but We’re Just Getting Started" blog post.
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