Xai Staking Pools Release (Staking V2)
Introduction
The Xai team believes that staking holds immense potential as a means of fostering community engagement. The design of the staking mechanism within the Xai ecosystem is centered around fostering collaboration. In other ecosystems, staking mechanisms have contributed significantly to the overall value of the ecosystem. Specific staking groups and pools have collaborated to create remarkable projects such as games, NFT drops, and more. We are eagerly anticipating the development of the Xai ecosystem through staking, aiming to cultivate a healthier and more sustainable ecosystem in the long term.
Sentry Key Owners
It is important to understand that staking is impossible without Sentry Keys. A Sentry Key must be staked to create a pool, and the maximum capacity of esXAI that can be staked into a pool is determined by the number of keys within the pool. Beyond creating pools, Sentry Key owners may stake their keys in one or many pools to increase that pool’s max esXAI that can be staked.
Key holders fuel the pool with the rewards generated by their keys. They aim to maximize their rewards, and they can achieve this by entering a higher reward tier, thereby increasing their chances of winning a reward. To reach these top tiers, they require a pool with a substantial amount of esXAI staked.
If you possess Sentry Keys, you are the cornerstone of the staking ecosystem.
Pool Owners
Only KYC’d Sentry Key owners can create a pool. Upon the creation of a pool, the pool’s creator determines the percentage of network rewards to retain for themselves. Pool owners serve as the effective leaders, recruiters, and evangelists within the Xai Staking Ecosystem. These individuals are duly rewarded by the pool for their leadership, organizational prowess, and marketing endeavors. If a pool creator does not perform these duties effectively, they risk losing their stakers to other more successful pools.
One of many possible candidates for a pool owner role could be a gaming project leveraging the XAI platform. By establishing a pool, they can effectively pre-launch their game and conduct airdrops to participants within the pool. This innovative approach empowers the community to stake their keys or esXAI with the pool, showcasing a high level of support. This strategy not only fosters community involvement but also serves as a litmus test for product/market fit. A project can utilize this method to gauge interest and validate their concept, initiating a pool alongside the release of a whitepaper or game announcement. The higher the number of stakers, the stronger the indication of product/market alignment, thereby justifying the investment of time and resources into further development. Subsequently, upon the project's launch, they will possess a comprehensive list of staked wallet addresses, representing a dedicated community that has been with them every step of the way.
esXAI Owners
Additionally, esXAI stakers may receive a percentage of network rewards, as determined by the pool creator. It is probable that the largest esXAI stakers will be Sentry Key owners, given that much of the esXAI is presently owned by Sentry Key owners. Because XAI can be immediately redeemed for esXAI, there are possibilities for existing community participants to expand their support for the ecosystem, or for new members to join our community. Locking up esXAI in staking contracts contributes to the development of a healthier, more secure, and valuable ecosystem, making this an inherent goal for any Sentry Key Owner.
Pool Creation
Any KYC-approved Sentry Key owner may create a pool provided they have accepted the applicable terms and conditions. The creator of a pool is responsible for determining the distribution of pooled network rewards, specifying the percentages allocated to themselves, Sentry Keys, and esXAI stakers. If a rewards scenario fails to attract many Sentry Key and esXAI stakers, it's possible that the chosen percentage distribution by the pool creator has either over or undercompensated a specific group excessively. Generally, we would expect the largest percentage of rewards to be allocated to Sentry Key stakers, the second largest to esXAI stakers, and the smallest to the pool creator. Ultimately, though, the reward breakdown is a matter for the pool creator to determine.. If you are dissatisfied with the operations of a particular pool, you have the freedom to join another pool or even create your own and establish your preferred scenarios (provided you own a Sentry Key).
Pool Maintenance and Operation
The Xai network allows Pool Owners to operate all of the keys in their pool to ensure that they participate in challenges and receive rewards. It also allows Pool Owners to assign a “delegate address” to their pool, which address can then operate all the keys in their pool. If the Pool Owner does not assign a delegate address, they can operate the keys in the pool with the wallet address used to create the pool.
A Pool Owner can operate the keys in their pool with the Sentry Node desktop client or CLI. Instructions for setup and operation can be found in the Xai gitbook. The wallet address used to operate the keys in the pool will need to be funded with Arbitrum Ethereum to pay gas costs. This balance should be closely monitored to ensure that the keys continue to have enough gas for the transactions required to operate - challenge assertions and reward claims.
Key holders may also continue to operate their keys that have been staked in pools. This can create redundancy to ensure that if the Pool Owner’s operator fails, the keys you have staked in a pool will continue to operate and contribute rewards to the pool. Key holders should be aware that operating these keys can result in paying gas costs for the transactions if their Sentry Node submits the transactions before the Pool Owner.
Time Cooldown
With Xai Staking Pools, several cooldown periods will be introduced to the network to prevent various exploits and ensure fairness.
First, if you stake a Sentry Key to create a new pool, you will not be able to unstake and dissolve the pool for a period of 60 days. This ensures that anyone who has staked in a pool has the opportunity to unstake and stake elsewhere before the pool is dissolved.If a pool’s creator has initiated the process to unstake their last Sentry key, the UI will display an alert. It will be up to you to take action as you see fit within the 60 day dissolution period, including to shift any esXAI out of the pool.
Second, as a pool creator, if you decide to change your pool’s reward breakdown – i.e. the distribution between the creator, Sentry Key stakers, and esXAI stakers, it will require 14 days for those changes to take effect. This prevents pool creators from enticing stakers into their pool and then changing the reward share without providing a fair notice period of 14 days.
Third, for regular stakers (as opposed to pool creators), unstaking is limited to once every 7 days. This measure prevents scenarios where stakers engage in "pool-hopping" to exploit the hourly challenge/assertion system and take additional rewards from the ecosystem. However, since normal stakers have the shortest cooldown period compared to creators, they can move out of a pool that is dissolving or changing its rewards scenario faster than the dissolution or scenario change can take place.
In the period immediately following the release of staking pools it is expected that the community will experiment with different pools and inevitably some of these pools won’t receive strong staking adoption. Stakers should monitor the staking pools they are in so they can actively manage their stake and avoid staking with an abandoned or unfavourable pool.
Gas Improvements in Xai Staking Pools
With the release of pooling there have been two major improvements that will result in gas savings; Submit Multiple Assertions and Claim Multiple Rewards.
Submit Multiple Assertions will allow an Operator to batch together all of the assertions for a challenge in one transaction. So the larger a pool grows, the more keys that will be able to participate in a challenge, the larger the savings will be to assert for them all in a single transaction.
Claim Multiple Rewards will allow an Operator to batch together all of the claims for a challenge in one transaction. Similar to above, the more keys an Operator runs for a pool, the bigger the savings.
Network Rewards and Tiers:
The reward system of XAI resembles that of Bitcoin, where a miner is randomly selected to receive the mining reward. In XAI, there are hourly challenges, and each Sentry Key has a baseline 1% chance of participating in a challenge through an assertion. By doing so, they become eligible for a reward in the subsequent challenge.
With the introduction of Xai Staking Pools, we have introduced two new concepts: Reward Thresholds and Multipliers. A Reward Threshold represents the minimum amount of esXAI required to be staked in order to attain a Reward Multiplier. A Reward Multiplier denotes the adjustment to the 1% baseline probability for staked Sentry Keys to participate in a challenge.
Xai Staking Pools enables any holder of esXAI, regardless of size, to join and collaborate for enhanced reward probabilities. Each Xai pool will belong to a defined rewards tier (bronze, silver, gold, platinum, and diamond). Each rewards tier will have higher reward thresholds and reward multipliers incentivizing community members to build bigger pools together.
This release will also come with changes to global values.
esXAI staking capacity per key will be cappedPools will have an initial maximum number of keys that can be staked
The Xai ecosystem objective is to fully decentralize the reward tier configurations and have these determined in a formulaic way at each halving event. This process is ongoing.
It's important to note that we are actively listening to community feedback, primarily through Discord and Telegram, both before and after the release of this new update. If the community's consensus is clear that the Thresholds, Tiers, or Multipliers need adjustment, we will heed the feedback and implement changes that we believe reflect the prevailing trend in community feedback.
Instructions for how to participate in Xai Staking Pools:
The release of Xai Staking Pools on the XAI blockchain will coincide with the introduction of staking pools. These pools will enable esXAI holders and key holders to combine their holdings, collectively stake, and achieve greater reward probabilities.
This article will dissect the Xai Staking Pools functionality into three parts:
Creating a pool Staking with a pool Accumulating pool rewards
Creating a Pool
Pools can be created by any Sentry Key holder who has undergone KYC. Let's walk through the steps to create a pool for those who do not own a Key, ensuring inclusivity for all potential Pool Owners. Pool owners should carefully consider the reward breakdown between themselves, key holders, and esXAI holders in their pool. It is crucial to ensure that both key holders and esXAI holders are adequately incentivized to stake, with competitive reward splits.
Purchase a Sentry Key at https://sentry.xai.games/Download the operator client from https://xai.games/Install the operator client and complete KYC with the wallet that owns the key.Pass KYC.Go to app.xai.games and connect your wallet holding the Sentry Key.Click on the left nav item “My Pools”.Click the button that says “Create Pool”.Enter the information and settings for your pool:Pool Name: Name your pool, preferably after your brand or project on XAI, to facilitate discoverability.Pool Description: Provide a brief description explaining who/what you are and why people should stake with you.Delegate Address: This is the wallet address that can run the Node Operator for all keys in the pool, crucial for ensuring uptime and participation in assertions.Pool Logo: Provide a URL for the pool logo, as it is stored on-chain in the pool metadata.Token Tracker Name and Ticker: Name and ticker for the staking token given to stakers. The staking token is a non-transferrable ERC20 token that will represent the users stake in your pool. When the user unstakes this will be burned. The token tracker name and ticket will appear on tools like Arbiscan so it will be important to brand them to your pool.Reward Breakdown: Allocate percentages to yourself, keys, and esXAI. Consider the gas costs for operating all keys in your pool when determining the owner's reward percentage.Owners share will have a capKeys share will have a cap esXAI share will have a capSocials: Include links to your social media platforms for a professional appearance and to communicate with your staking community.Website, Twitter, Telegram, Discord links.Choose the number of your keys to stake with your pool (min 1).Confirm and sign the wallet transaction – you will need some Arbitrum ETH for gas costs.Congratulations! Your pool has been created. Now, anyone can find it on app.xai.games/staking to stake their keys or esXAI.
Staking with a Pool
If you wish to stake your Keys or esXAI with a pool to earn rewards, you can browse the staking pools at app.xai.games/staking. Each pool is listed with the rewards for staking esXAI and Keys. Follow these steps to stake with a pool:
Connect your wallet holding the esXAI and/or Sentry Keys you want to stake.Search for the desired pool.Click on the pool to open its details screen.Click on the stake button for either the keys component or esXAI component.Set your stake amount. There is no minimum, but pools have maximum staking capacities for both keys and esXAI.Confirm the amount and sign the transaction – you will need some Arbitrum ETH for gas costs.Congratulations! You have successfully staked with a pool.
Accumulating Pool Rewards
After staking Keys and/or esXAI, you may wonder how rewards accumulate and when you can claim them. Here is a breakdown:
A network challenge occurs, and the referee determines which Sentry Keys can participate.The referee assesses the esXAI staked in each pool to determine the pool's tier.The referee applies the tier’s reward odds to every key in the pool to determine if they can generate a reward from an assertion.The Node Operator will submit an assertion for any keys that are able to generate rewards.For example, if the referee determines that three keys in your pool have won:The pool owner submits assertions for these keys in a single transaction.The rewards for these assertions become claimable after 1 hour.The pool owner claims the esXAI rewards for the winning keys in a single transaction.Bulk claiming results in gas savings, especially with more keys in the pool, as up to 100 keys can be in a single bulk claim transaction.The claimed esXAI rewards are distributed among the pool owner, key stakers, and esXAI stakers based on the pool's reward breakdown.Stakers can claim their portion of the rewards from the pools listing on https://app.xai.games/stakingStakers can let their rewards accrue to claim at more gas optimal times
With the pooling model, XAI ensures that all participants have sufficient incentives to engage:
Key holders benefit from esXAI owned by others, contributing to higher reward probabilities through staking tiers.esXAI holders receive a portion of key rewards in exchange for staking their esXAI to achieve these tiers.Pool owners earn rewards to operate the keys, ensure uptime, and market the pool to attract more participants.
XAI's goal is to maximize staking participants, thereby demonstrating strong engagement 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 stake percentage increases.
Please note that this blog post is provided for informational purposes only and should not be relied upon as investment advice or otherwise. Staking comes with risk and you should take your own advice before choosing to stake any assets. All staking activities will be subject to our terms and conditions as shall be updated from time to time.