original
https://medium.com/@xaifoundation/xai-announces-staking-pools-1d303995c921
Introduction
The Xai team believes that staking has huge potential as a way to promote community participation. The staking mechanism within the Xai ecosystem is designed to promote cooperation. In other ecosystems, staking mechanisms have significantly increased the overall value of the ecosystem. Specific staking groups and pools have collaborated to create compelling projects such as games, NFT releases, and more. We are eager to promote the development of the Xai ecosystem through staking, aiming to cultivate a healthier and more sustainable ecosystem in the long term.
Xai Node KEY Holder
It is important to understand that without a node KEY, there is no way to stake. A node KEY must be staked to create a pool, and the maximum amount of esXAI that can be staked in a pool is determined by the number of KEYs in the pool. In addition to creating a pool, node KEY holders can also stake their KEYs in one or more pools to increase the maximum esXAI staked for that pool.
KEY holders contribute to the pool through the rewards generated by their KEY. Their goal is to maximize rewards, and they do this by entering higher reward tiers, thereby increasing their chances of winning. To reach these top tiers, they need a pool with a large amount of esXAI staked.
If you own a node KEY, you are the cornerstone of the staking ecosystem.
Pool Holders
Only KYC-ed node KEY holders can create a pool. After creating a pool, the pool creator decides what percentage of the network rewards to keep for themselves. Pool owners act as de facto leaders, recruiters, and missionaries in the Xai staking ecosystem. These individuals are rewarded by the pool for their leadership, organizational skills, and marketing efforts. If pool creators do not perform these duties effectively, they may lose their stakers to other more successful pools.
A possible pool holder candidate could be a gaming project leveraging the Xai platform. By setting up a pool, they can effectively pre-release their game and airdrop to participants in the pool. This innovative approach gives the community the ability to stake their KEY or esXAI in a pool-like manner, demonstrating a high level of support. This strategy not only fosters community engagement, but also serves as a litmus test for product/market fit. Projects can leverage this approach to gauge interest and validate their concept, launching a pool by releasing a whitepaper or game announcement. The greater the number of stakers, the stronger the indication of product/market alignment, justifying the investment of time and resources in further development. Subsequently, when the project launches, they will have a comprehensive list of staked wallet addresses, representing a dedicated community that has been with them along the way.
esXAI Holders
Additionally, esXAI stakers may receive a percentage of network rewards at the discretion of the pool creator. The largest esXAI stakers are likely to be node KEY holders, as the majority of esXAI is currently owned by node KEY holders. Because XAI can be instantly redeemed for esXAI, it is possible for existing community participants to expand their support for the ecosystem, or for new members to join our community. Locking esXAI in the staking contract helps develop a healthier, more secure, and more valuable ecosystem, which is an inherent goal of any node KEY holder.
Creating a Pool
Any KYC-approved NodeKEY holder can create a pool, provided they have accepted the applicable terms and conditions. The creator of a pool is responsible for determining the distribution of the pool's network rewards, clearly specifying the percentages allocated to themselves, NodeKEY, and esXAI stakers. If the reward scenario fails to attract many NodeKEY and esXAI stakers, it may be because the percentage distribution chosen by the pool creator over- or under-compensates a particular group. Generally, we expect the largest portion of rewards to be allocated to NodeKEY stakers, the second largest portion to esXAI stakers, and the smallest portion to pool creators. Ultimately, the reward distribution is a matter for the pool creator to decide. If you are not satisfied with the operation of a particular pool, you are free to join another pool or even create your own pool and establish the scenario you like (provided you own the NodeKEY).
Pool maintenance and operation
The Xai Network allows pool holders to operate all the keys in their pool to ensure that they participate in challenges and receive rewards. It also allows pool holders to specify a "proxy address" for their pool, which can operate all the keys in the pool. If the pool holder does not specify a proxy address, they can operate the keys using the wallet address that created the pool.
Pool holders can operate the KEYs in their pool using the Node desktop client or CLI. The wallet address used to operate the KEY requires Arbitrum Ethereum to pay for Gas. This balance should be closely monitored to ensure that the KEY continues to have enough Gas for the required transaction operations - challenge assertions and reward acquisitions.
KEY holders can also continue to operate the KEYs they have staked in the pool. This creates redundancy to ensure that if the pool holder's Operator fails, the KEYs you staked in the pool will continue to operate and contribute to the pool's rewards. KEY holders should be aware that if their node submits transactions before the pool holder, operating these keys may require paying the gas fees of the transaction.
Cooling time
With the launch of the Xai staking pool, the network will introduce several cool-down periods to prevent various vulnerabilities and ensure fairness.
First, if you stake a node KEY to create a new pool, you will not be able to unstake and dissolve the pool within 60 days. This ensures that anyone who has staked in the pool has the opportunity to unstake and move elsewhere before the pool dissolves. If the creator of the pool initiates the process of unstaking their last node KEY, the UI will display an alert. During the 60-day dissolution period, it will be up to you to take appropriate action based on the circumstances, including transferring any esXAI out of the pool.
Second, as a pool creator, if you decide to change the pool's reward distribution - that is, the distribution between the creator, node KEY stakers, and esXAI stakers, these changes will take 14 days to take effect. This prevents pool creators from attracting stakers to their pool and then changing the reward shares without providing a 14-day fair notice period.
Third, for regular stakers (as opposed to pool creators), unstaking is limited to once every 7 days. This measure prevents situations where stakers engage in “pool hopping” to take advantage of the hourly challenge/assertion system and extract additional rewards from the ecosystem. However, since regular stakers have a shorter cooldown period than creators, they can leave a pool faster than disbanding or changing the reward landscape.
In the early days after the staking pool is launched, it is expected that the community will try different pools, and inevitably, some of them will not be able to gain strong staking support. Stakers should monitor the staking pools they are in to actively manage their stake and avoid staking with abandoned or unfavorable pools.
Gas Improvements for Xai Staking Pool
With the launch of staking, two major improvements have been implemented that will save gas fees: submitting multiple assertions and receiving multiple rewards.
Submitting multiple assertions will allow the Operator to batch submit all assertions for a challenge in a single transaction. Therefore, the larger the pool, the more keys that can participate in the challenge, and the greater the savings from making assertions in a single transaction.
Receiving multiple rewards will allow an Operator to batch all rewards for a challenge in a single transaction. Similar to the above, the savings will be greater for Operators with more keys in the pool.
Network Rewards and Tiers:
Xai's reward system is similar to Bitcoin, where miners are randomly selected to receive mining rewards. In Xai, there are challenges every hour, and each node KEY has a 1% baseline chance to participate in the challenge by asserting. In this way, they are eligible to receive rewards in subsequent challenges.
With the launch of the Xai staking pool, we introduced two new concepts: reward threshold and multiplier. The reward threshold represents the minimum amount of esXAI that needs to be staked in order to obtain the reward multiplier. The reward multiplier represents the adjusted 1% baseline probability for staking node keys to participate in the challenge.
The Xai staking pool enables any esXAI holder, big or small, to join and collaborate to enhance reward probabilities. Each Xai pool will belong to a defined reward tier (Bronze, Silver, Gold, Platinum, and Diamond). Each reward tier has a higher reward threshold and reward multiplier, incentivizing community members to build larger pools together.
This launch will also be accompanied by changes in global values.
The esXAI staking capacity of each KEY will be limited
The pool will have an initial maximum number of staked keys
The goal of the Xai ecosystem is to fully decentralize reward tier configurations and have these determined in a formulaic manner at each halving event. This process is ongoing.
It’s important to note that we are actively listening to community feedback, primarily via Discord and Telegram, both before and after the release of this new update. If community consensus clearly indicates that thresholds, tiers, or multipliers need to be adjusted, we will listen to the feedback and implement changes that we believe reflect the trend of community feedback.
Instructions on how to participate in the Xai staking pool:
The Xai Staking Pool will enable esXAI holders and KEY holders to combine their holdings, stake collectively, and achieve a greater probability of rewards.
The functionality of the Xai staking pool is divided into three parts:
Create a pool
Staking through a pool
Get pool rewards
Create a pool
Any KYC-ed node KEY holder can create a pool. Let's go through the steps for those who don't own a KEY to create a pool, ensuring that all potential pool holders are inclusive. Pool holders should carefully consider the reward distribution between themselves, KEY holders, and esXAI holders in their pool. Ensuring that both KEY holders and esXAI holders have enough incentive to stake, a competitive reward distribution is critical.
Purchase a node KEY at https://sentry.xai.games/.
Download the Operator client from https://xai.games/.
Install the Operator client and complete KYC using the wallet that owns the KEY.
Pass KYC.
Go to app.xai.games and connect the wallet that holds the node KEY.
Click "My Pool" in the left navigation.
Click the "Create Pool" button.
Enter your pool's information and settings (see Appendix A below).
Confirm and sign the wallet transaction - you will need some Arbitrum ETH to pay for gas.
Congratulations! Your pool has been created. Now anyone can find it at app.xai.games/staking to stake their KEY or esXAI.
Appendix A
Pool Name: Please name your pool after your brand or project on Xai to make it easier to be discovered.
Pool Description: Provide a brief description of who/what you are and why people should stake with you.
Proxy Address: This is the wallet address that can run a node operator for all the keys in the pool, and is essential to ensure normal operation and participation in assertions.
Pool Logo: Provide a URL to a pool logo as it is stored in the pool metadata.
Token Tracking Name and Ticker: Give a name and ticker to the token given to stakers. The staked token is a non-transferable ERC20 token that will represent the user's stake in your pool. This will be destroyed when the user unstakes. (Note: The token tracking name and ticker will appear on tools like Arbiscan, so it's important to brand your pool.)
Reward distribution: Allocate percentages to yourself, KEY, and esXAI.
- Gas fees for all keys in the pool are considered when determining the holder reward percentage.
- There will be a cap on the number of shares held
- KEY shares will have an upper limit
- esXAI shares will have a cap
Social Media: Include links to your social media platforms to present a professional image and communicate with your staking community.
Website, Twitter, Telegram, Discord links.
Select the amount of KEY you want to stake with your pool (minimum 1).
Staking through a pool
If you wish to stake your KEY or esXAI with a pool to earn rewards, you can browse the staking pools at app.xai.games/staking. Each pool lists the rewards for staking esXAI and KEY. Follow the steps below to stake with a pool:
Connect the wallet that holds the esXAI and/or node KEY you wish to stake.
Search for the desired pool.
Click a pool to open its details screen.
Click the Stake button for the KEY component or esXAI component.
Set your stake amount. There is no minimum, but the pool has a maximum stake capacity for both KEY and esXAI.
Confirm the amount and sign the transaction - you will need some Arbitrum ETH to pay for gas.
Congratulations! You have successfully staked with a pool.
Get pool rewards
After staking KEY and/or esXAI, you may be wondering how rewards accumulate and when you can claim them. Here is a breakdown:
A network challenge occurs and the referee determines which node KEYs can participate.
Referees evaluate the amount of esXAI staked in each pool to determine the pool's rank.
The referee applies the graded reward probability to each key in the pool to determine whether they can generate a reward from the assertion.
The node operator will submit assertions for any key that is able to generate rewards.
For example, if the referee determines that your pool has three KEYs winning:
The pool owner submits assertions for these keys, submitted as a single transaction.
Rewards for these assertions will be available for claiming after 1 hour.
The pool owner receives the esXAI reward for the winning KEY in a single transaction.
Batch acquisition can save gas fees, especially when there are more keys in the pool, because up to 100 keys can be in a single batch acquisition transaction.
The esXAI rewards earned will be distributed among the pool owner, KEY stakers, and esXAI stakers according to the pool’s reward distribution.
Stakers can claim their portion of the rewards in the pool list at https://app.xai.games/staking (Note: Stakers can let their rewards accumulate and claim them at a more favorable Gas time)
Through the staking model, Xai ensures that all participants have sufficient incentive to participate:
KEY holders benefit from the esXAI owned by others, contributing to a higher probability of rewards through staking tiers.
esXAI holders receive a portion of the KEY rewards by staking their esXAI to reach these tiers.
Pool owners earn rewards by operating KEYs, ensuring normal operation, and marketing the pool to attract more participants.
Xai's goal is to maximize staking participants, thereby demonstrating strong participation with the blockchain. Staking participation serves as a strong validator in the eyes of the community, making the blockchain more attractive to projects as the number of participants and staked percentages increase.
Please note that this blog post is for informational purposes only and does not constitute investment advice or other recommendations. Staking carries risks and you should seek your own advice before choosing to stake any assets. All staking activities will be subject to our terms and conditions as updated from time to time.
