Wed. Jun 16th, 2021
Staking, TON Surf, Free TON

Surf developers have announced the release of version 5.0.0 with an infinity staking feature. We will tell you more about what staking is, its features in Free TON, and the corresponding functionality of TON Surf.

Free TON staking: general rules

Validator nodes are an integral and fundamental part of the Free TON blockchain work. Validators calculate smart contracts and record transactions in the nodes. Validators selecting procedure determines which nodes will sign the next block.

Staking is part of the Proof-of-Stake consensus-building procedure required for the successful operation of Free TON. Staking is the freezing of many TON Crystals by their owners to take part in the election of validators. By becoming validators, the largest token holders leave their funds as collateral, ensuring the integrity and quality of their further work and reducing the pressure on the crystal rate. On the one hand, validators are interested in the smooth operation of the blockchain, as holders of a large amount of its value, on the other hand, they risk losing part of the stake for low-quality work.

Mainnet And Shardchain Validator Elections

At the moment, 443 validators are registered in Free TON. Of these, there are elections for each 18-hour cycle. A special smart contract, Elector, handles the election and work of validators.

The owners of the maximum stakes become validators of the masterchain blocks, while the remaining selected ones validate the shards. The maximum number of main validators is 100, the minimum is 13. Currently, there are 16 shards in the Free TON blockchain, each with 13 or more validators. You can find all validation parameters in the corresponding tab.

During the working cycle, validators form blocks of transactions and sign them, leaving a stake as collateral. There is a slashing procedure, cutting the stake to punish the validator for poor-quality work. For example, he may lose part of his stake if he skips blocks. These sanctions are a serious motivation to continuously perform the work of the validator as efficiently as possible. While the slashing mechanism is being tested on the mainnet, validators work without the sword of Damocles.

For their work in the masterchain, validators receive 1.7 TON per signed block, in shardchains — 1 TON.

The income of validators consists of the following indicators:

  • the number of transactions in the cycle. The more of them, the more blocks generated and signed by the validator, the higher the revenue.
  • the number of validators in the network. A large number of validators increases the reliability of the network, but reduces the frequency of block signing by each validator, reducing the reward.
  • the size of the validator’s stake — those who made the maximum stake on the elections are sent to validate the masterchain, and in the current network configuration, these are the first 100 validators. 
  • slashing — from the moment of introduction.

Currently, the average revenue from the Free TON network validation is 5.6% per year.

DePool Formation

DePool is a special smart contract that allows users to take part in validator staking. Free TON now has about 400 DePools

DePool is forming from the funds of the corresponding validator and contributors. Any contributor can select and transfer funds to DePool address and count on staking income. The income is generated based on the specified annual return, minus the validator’s commission for servicing DePool. The commission usually ranges from 4% and more.

The DePool deposit operates on a “demand” deposit with the ability to withdraw funds after the end of the cycle. Since the stake of each validator cannot significantly exceed the rest, we can say that DePools are limited to a certain bar. The excess part does not take part in the validation process and is frozen. After the completion of the validation cycle, this part of the tokens is returned to the stake, and the validation reward is distributed among the contributors in proportion to their contributions. 

In the future, it is planned to introduce DePools with a long period of funds freezing to receive increased income for its contributors.

Let’s summarize. By depositing funds into DePool, you take part in the validation process. For example, if you have 100 crystals, then you block them in DePool, receive a reward — about 5.6% per annum, and pay a commission to the validator who owns DePool.

If you have an amount of 260,000 TON Crystal, you can establish your own node and directly take part in the validation.

TON Surf 5.0.0 — Infinity Staking

TON Surf 5.0.0 is already out. From that moment on, it became possible to test the DePool staking service directly in Surf. You can leave feedback about your experience in the Surf beta testing group. The appearance of such a service became possible thanks to the support of TON Surf interface smart contracts — DeBots, one of which provides the ability to interact with DePools.

This is what the staking information window looks like when you click on the Earn staking rewards card.

TON Surf, Staking, TON Crystal

Depending on the DePool, where stakes are accepted, the validator’s commission is indicated — Reward fee.

Funds in the staking are frozen for 54 hours. During this time enabled:

  • validator elections — 18 hours
  • validation cycle — 18 hours
  • the last 18 hours is the stake freeze period in the Elector’s smart contract.

The minimum stake that can be made (Min. stake) is 100.5 crystals.

The updated version of Surf does not have a maximum top stake value. Infinite staking promised! If the current DePool is already full, then your stake will go to the next one in the queue. The “Available pool” parameter specifies the number of tokens available for staking.

An important parameter is Assurance — this is the number of tokens that the validator directly risks. In the case of imposing fines on the validator, first of all, his funds are cut. If the amount of the penalty exceeds the Assurance of the validator, then it is the turn of the funds of DePool contributors.

Welcome To The Slashing Era

When investing in DePool, you need to consider the possibility of a fine. Remember, slashing is coming soon! The choice of DePool will need to be approached especially responsibly, first of all, paying attention to the amount of the Assurance. The higher it is, the more the validator can lose his funds. And the less likely the tokens of the contributors of his DePool will suffer. Then you should look at the reputation of the DePool validator.

Keep in mind that you may not earn a fixed percentage on staking, but, on the contrary, lose some of your crystals. 

How To Stake In DePool In Surf 5.0.0

There are several ways to send tokens to DePool in Surf 5:

  • Send crystals to a free DePool that Surf will offer. To do this, go to the staking window by clicking on Earn staking rewards and click Stake. Enter the number of crystals in the Amount line and confirm the action-Confirm and Send. Please pay attention to Fee, which will be deducted from you. The minimum stake is 100.5 crystals.
TON Surf, Staking, TON Crystal
  • Via DeBot. Select Browse DeBots and then DePool. After that, a question-and-answer interface appears for communicating with the bot. Click “I understand”, confirming that you are aware of the transition to a third-party service that is not controlled by TON Surf, and communicate with the bot.

While the application is being debugged, not all staking options through the bot are functional. You can send tokens to the address you entered yourself; by scanning the QR code or choose from several suggested DePools.

TON Surf, TON Crystal, Staking

There are wallets and exchanges in which staking is carried out virtually, interest is charged on your balance without transferring funds to a separate account. For example, and CEX.IO.

You can earn money on staking even with a few crystals. The key thing is to consider the risks and commissions so as not to miscalculate and increase your funds.

A Few Questions To TON Surf Product Owner Evgeny Teslov

  • What DePools will be in the final version of the staking?

There is no final version of the services around staking. These services will constantly develop and transform. Surf already offers a choice: 

  1. Surf DePools
  2. Any DePool network through DeBot.
  • Do you plan to have a DePool rating considering the planned slashing mechanism?

We are developing a service in Surf based on open scoring, which will consider the slashing mechanism.

  • Will the minimum stake threshold be lowered?

We see no prerequisites for changing the minimum stake.

  • Will there be a mechanism to protect stakes from being credited to an already fulfilled DePool? Stakes that will be blocked, but will not take part in the elections?

In Surf, the protection mechanism is already implemented and works, but you can “stake” in DePool in other ways. This solution should rather be implemented at the level of the DePool smart contract.