What is staking?
Governance is a key aspect of the Enjin Blockchain, a Proof-of-Stake (PoS) blockchain. It involves users participating in the network's operations by "staking" or locking up their Enjin Coins (ENJ). Staking allows the network to validate transactions, secure the blockchain, and produce new blocks.
Individual users play an important role in validator oversight. They will be able to participate in governance by joining nomination pools, which are blockchain entities that enable users to contribute their tokens to the network. These pools select nodes (and stake the pooled ENJ toward these nodes) to become active validators for creating new blocks. Validators that produce valid blocks receive rewards in the form of ENJ tokens, which are then distributed among the users who staked their ENJ in the corresponding pool.
This process of participation within the Enjin Blockchain ecosystem is a way for ENJ holders to participate in validator oversight, thereby keeping the network secure.
How to join a nomination pool
❓ To join a nomination pool, your tokens must be ENJ tokens on the Enjin Blockchain.
If you still hold ERC-20 ENJ tokens, you will need to migrate them first, following the steps here: How to migrate ERC20 ENJ / EFI tokens to Native ENJ.
Begin by launching the Enjin Wallet app and selecting the "Stake" option from the bottom menu, followed by tapping the "Continue" button.
To contribute your ENJ tokens to a pre-selected nomination pool, simply press the "Stake Now" button. However, if you prefer to view all the available pools, tap on the "View Pools" button and choose the pool that best suits your needs.
Staking takes part on the Enjin Relaychain.
If your ENJ tokens are currently held on the Enjin Matrixchain, you first need to "Teleport" the tokens from Enjin Matrixchain to Enjin Relaychain.
❓ For more information on teleporting, check out Teleporting on Enjin wallet.
Next, decide on the amount of ENJ tokens you wish to stake.
You can enter this amount manually or tap the MAX button to stake all available tokens in your wallet.
Once you've confirmed the amount, tap the "Continue" button.
Give your staking settings one final review. Make sure everything is as you want it to be.
When you're satisfied with your selections, tap the "Stake" button to finalize the process and stake your ENJ tokens.
Frequently Asked Questions:
Can I stake using any cryptocurrency?
Staking on the Enjin Blockchain is only possible with native ENJ tokens that are on the Enjin Blockchain.
If you have ENJ tokens on the Ethereum network, you will need to migrate them to the Enjin Blockchain before you can stake them.
To learn how to migrate your ERC20 ENJ tokens to native ENJ, please follow the steps in this guide: How to migrate ERC20 ENJ / EFI tokens to Native ENJ
How often are rewards distributed?
Rewards are distributed at the end of each "era," generally a 24-hour period.
What is a validator?
Validators are nodes that become active participants in block creation on the network.
Validators that produce valid blocks receive rewards in the form of ENJ tokens.
What is a nomination pool?
A nomination pool is a blockchain entity that allows users to stake their ENJ to participate in the PoS system and potentially earn rewards in the form of ENJ tokens.
How is the amount of my staking reward determined?
The amount of your staking reward is determined by the proportion of ENJ tokens you've staked in a nominator pool.
The more ENJ you stake, the higher your share of the pool's total rewards.
Remember that it’s always possible for your rewards to change in the event that “slashing” takes place.
When a validator breaks security protocol, or puts the integrity of the blockchain at risk, that validator’s rewards and staked ENJ can be slashed (and so will the tokens of the nominator pools that backed it).
How long do I have to stake my ENJ?
The staking duration is flexible. You can stake your ENJ for as long as you want.
However, keep in mind that rewards are distributed at the end of each "era," which is typically 24 hours.
Can I remove my stake whenever I want?
Absolutely, you can choose to 'Release Stake' in the Enjin Wallet.
This process involves either instantly exchanging your staked ENJ (sENJ) for ENJ, given there's enough liquidity, or initiating an unbonding process.
In instances where liquidity is insufficient for a direct exchange, you can opt for unbonding.
However, it's important to note that unbonding takes 28 eras (roughly 28 days), and during the unbonding period, the staked ENJ cannot be accessed and will not accumulate staking rewards.
Does staking ENJ require a minimum amount?
Yes, the minimum amount that can be staked is 1 ENJ.
Is it possible to lose my staked ENJ?
It is possible to lose staked ENJ due to “slashing” or adjustment of rewards or loss of staked ENJ due to selection of a validator that fails to process transactions properly.
This is central to proof of stake blockchains, where staking holders are incentivized to select validators that secure the network and are penalized when these validators fail to do so.
Before contributing to a nomination pool, make sure to DYOR (do your own research) especially on the validators nominated by your chosen pool (since slashing is possible for misbehaving validators). Reviewing the performance of validators you choose through a nomination pool maintains the integrity of validator oversight. Further, given that holders may use an application or interface to interact with Enjin Blockchain staking instead of interacting directly with the chain, holders must assess the integrity and security of these applications and interfaces as these are separate from Enjin Blockchain.