Staking MPX: What you need to know

This article will dive into staking MPX and answer our users' most frequently asked questions.

The number of users in the CrossFi ecosystem grows exponentially every day and many of these people want to learn more details on how to earn the XFI rewards through staking the MPX coins they bought or received as a prize for participating in different activities (such as Zealy campaigns, ambassador program for content creators and distributors, incentivized testnet or Discord server events). This article will dive into staking MPX and answer our users’ most frequently asked questions.

What is Staking?

Staking is a way to lock MPX coins for a set period for a reward in XFI coins. It can be considered a safety deposit for validation activities: validators will use the stakes to validate the transactions and keep the blockchain functioning. Staking allows for true decentralization.

The process occurs at the “Staking” tab in the CrossFi Console, where users can choose a validator to bond their coins to and learn the details, like the validator’s commission fee and the total transaction fee calculated based on the delegation amount. The staking amount will be subtracted from the total balance. Users can see the bond in the “My validators” area and the bond transaction details in the “Transaction history.” The rewards add up after processing every block and can be claimed anytime. A transaction fee will be required to move the rewards to the user’s wallet. When rebonding, unbonding, or adding delegation to an existing bond, the XFI rewards will be automatically claimed and added to the user’s balance.

Why stake MPX over any other crypto?

How do I choose a validator?

 Delegators are free to choose validators according to their subjective criteria. Selection criteria include:

• Amount of self-delegated MPX: Number of MPX a validator self-delegated to themselves. A validator with a higher amount of self-delegated MPX indicates that the validator shares the risk and experiences consequences for their actions.
• Amount of delegated MPX: Total number of MPX delegated to a validator. A high voting power shows that the community trusts this validator. Larger validators also decrease the network’s decentralization, so delegators should consider delegating to smaller validators.
• Commission rate: Commission applied on revenue by validators before the income is distributed to their delegators.
• Track record: Delegators review the track record of the validators they plan to delegate. This track record includes past votes on proposals and historical average uptime.
• Community contributions: Another (more subjective) criterion is the work that validators have contributed to the community, such as educational content, participation in the community channels, contributions to open-source software, etc.

Apart from these criteria, validators can include a website address in their description on the XFI Scan tool.

How are the rewards calculated?

The most important indicator for staking is APR (Annual Percentage Rate). APR is an annual interest rate calculated to measure the yield of MPX coin staking, excluding compound interest.

APR has a dynamic value that can change at any time. APR directly depends on the XFI coin rate, the total MPX stake in the network, and is calculated using the following formula:

APR =[XP x  B x E / M x MP] x 100 

Constants:

• B – number of blocks per year (6,307,200)
• According to the emission algorithm, e-XFI emission per block (5) changes every four years.
• MP – MPX rate (is stable and equal to 0.02$)

Variables:    

• XP – XFI rate ($)
• M – total MPX stake in the network

Since the stake is in MPX and the rewards come in XFI, the interest rate is calculated in dollars to MPX.

Example:    

• XP = $1.59
• M = 10 000 000 000 MPX

With these rates, the APR is 25%. A stake of 50,000 MPX ( $1,000 ) will yield 148 XFIs for the year, which will be worth $250 (12,500 MPX).

MPX $ APR is dynamic and directly related to the total amount of MPX in the stake and the current market value of the XFI. The APR value for the MPX coin can be tracked in real-time on XFI scan: test network version and main network versions are available.

What is Rebond?

When a user who delegated their coins wants to choose another validator from the active set, Rebond happens immediately. The user needs to pay a standard transaction fee (approximately ~3 MPX) to move the funds from one validator to another. Only the total delegation amount is available for a rebound, as choosing an amount is impossible.

What is Unbond?

When a user who delegated their coins wants to retrieve part or all of their deposit, they can use an “Unbound” feature. The time for sending funds to your wallet can be up to 15 days from the date of sending the request. During this time, the funds will be frozen, and you cannot use them. The XFI rewards claim will happen automatically and will be delivered immediately. To complete the unbound, the user must pay a standard transaction fee (approximately ~3 MPX) to return the funds from the validator.

What should you do if the XFI rewards are not generated?

 It’s possible that a user delegated to the validator had technical problems and went inactive, therefore not generating XFI rewards for their delegates until they fixed it. In this case, users can wait until the validator goes back to the active status, Rebond their delegation, or Unbond it.

Can a validator run away with their delegators' MPX?

By delegating to a validator, a user delegates voting power. The more voting power a validator has, the more weight they have in the consensus and governance processes. This does not mean that the validator has custody of their delegators’ MPX. A validator must stay with its delegator’s funds.

Even though delegated funds cannot be stolen by their validators, delegators’ tokens can still be slashed by a small percentage if their validator suffers a slashing event, which is why we encourage due diligence when selecting a validator.