TL;DR
Binance Smart Chain allows you to enjoy unlimited DeFi infrastructure at low costs. BSC is supported by a series of 21 community validators that process transactions, provide hardware and computing power, and maintain network security. In return, they receive rewards from transaction fees and BNB staking.
Do you also want to contribute to the growth of BSC and earn rewards? Anyone who owns BNB can do so by simply staking BNB as a delegator. Let's see how it works and how you can participate.
Introduction
BSC has seen a surge in activity. DApps like PancakeSwap, Venus, and many more have seen rapid growth. If you're not familiar with the BSC ecosystem, you can start by reading our quick start guide for BSC.
Building an ecosystem and community of projects, infrastructure, developers, tools, and users is not easy. This makes crypto so powerful, it also makes open source software a kind of mainstream product.
Binance Smart Chain (BSC) is supported by a number of community validators and delegators who can stake BNB to earn rewards. If you are new to BSC or don't fully understand the role of validators and delegators, read our article The Journey to Decentralization: Validators & Delegators.
The goal of community validators is to grow BSC into a larger and more accessible ecosystem. So, what does it really mean, and how can you participate?
What is the Binance Smart Chain (BSC) validator?
Binance Smart Chain uses a consensus model called Proof of Staked Authority (PoSA). This model is a mix between Proof of Authority (PoA) and Delegated Proof of Stake (DPoS). This consensus model can support short block times and low fees, and only requires 21 validators to run.
Validators take turns producing blocks. Basically, they power the BSC network by processing transactions and signing blocks. As compensation, they receive rewards in the form of BNB tokens. Meanwhile, they also need re-election by staking governance so they can continue to be part of the validator chain.
What are the requirements to become a validator? A validator must run a hardware node with the required specifications, run a full BSC node, and stake a minimum of 10,000 BNB. However, that's not all. These requirements are just enough to become a selected candidate.
In order to actually start producing blocks, a validator candidate must become an elected validator. The selected validators are the 21 validator candidates with the highest voting power. These candidates change every 24 hours through an ongoing voting process, and you can check them on the list of top validators on Binance.org.
What is a Binance Smart Chain (BSC) delegator?
Becoming a validator is not for everyone. So, how do you participate as a regular user?
You can become a delegator and stake your BNB to validator candidates via one of the supported wallets. Through staking, you can select the desired validators and help them reach the minimum staking required by the protocol.
As a result, you collect BNB pooling to the desired validator. As is known, validators receive their rewards in the form of BNB. We also know that cryptocurrency networks are very effective in creating economic incentives. You can probably guess what happens next. In exchange for staking votes, validators share a portion of their earnings with their delegators. This is a win-win situation.
Delegators can also carry out a process called re-delegation. This means that they can transfer part of their staking from a particular validator to another validator. Redelegation can be a great way to support more than one validator at the same time.
Delegators can also cancel delegation of their staking. This means that they stop delegating to the validators they have been delegating to. Note that delegation works with a 7-day unbundling period, at the end of which the delegator will receive the BNB used for staking. The delegator does not receive BNB rewards during the unbundling period.
Should I become a delegator on Binance Smart Chain (BSC)?
The choice depends on you. By becoming a delegator, you delegate your staking to a validator of your choice. You also entrust them to vote on governance decisions on your behalf. Wait, there are also governance rights over BNB? Yes. Validators can manage certain network features of the BSC, such as adjusting gas prices, changing system parameters, or even upgrading the blockchain.
By delegating, you also increase validator stakes in the overall reward pool. Because you both benefit from being together, you both get rewards. As of February 2021, the average daily staking reward for a BSC validator was 134 BNB. Meanwhile, the average APR for BSC delegators is around 60%.
While financial incentives are a great thing and make the world go round, being a delegator isn't just about the returns. By becoming a delegator, you directly support the operations and security of BSC.
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How to become a validator on Binance Smart Chain (BSC)
So, you've decided that you're going to reach for the sky and become a BSC validator. What should you do?
To become a validator on BSC, you must meet the following requirements:
Meets necessary hardware requirements.
Running BSC full node.
Stake at least 10,000 BNB.
This will allow you to get on the list of validator candidates and potentially attract more delegators to stake (delegate) their BNB to your validator.
As of March 2021, the 21 selected validators all had more than 150,000 BNB staked. So you have stiff competition (which is a good thing for the overall health of the network).
If you want to learn a more detailed technical guide on how to do this, read the BSC Validator guide.
How to become a delegator on Binance Smart Chain (BSC)
Becoming a delegator may be a better option if you don't want to go through the technical intricacies of becoming a validator. If you are a BNB owner, delegating your staking can be an easy solution to support BSC and earn returns.
You can read the following guide on how to stake BNB using several popular wallets:
Binance Chain Wallet
Trust Wallet
MathWallet
Rewards for staking are distributed to delegators every day at 07.00 WIB. When you delegate staking to a validator, you will start receiving rewards the second day after delegating.
So, what returns can you expect? Let's use one of the popular validators as an example, namely Ankr. As of March 2021, this validator generated an APR of 27%. Reasonable; However, don't forget that these rewards can fluctuate.
Closing
Whether you're a developer, user, or just a DeFi enthusiast, there are many ways to participate in building the BSC ecosystem. However, staking BNB is the perfect way for anyone to engage with BSC as a direct supporter of the health and security of the network.
If you want to read more about BNB staking details, read the Binance Chain docs.
Do you still have questions regarding Binance Smart Chain validators and delegators? Visit our Q&A platform, Ask Academy, where the Binance community will answer your questions.
