Testnet update: Tokenomics Integration
Tags: Decentralized Exchange, Testnet, Polkadot Network, Polkadex, Testnet Launch

What is staking?

In a nominated Proof of Stake (nPoS) blockchain like Polkadex, staking allows token holders to actively participate in transaction validation. It can be thought of as similar (less resource-intensive) to mining on a Proof of Work blockchain like Bitcoin. Staking involves locking cryptocurrencies to earn rewards.

nPoS allows you to “vote” for validators and share in the rewards (and slashing) without running a validator node yourself. By staking your PDEX and ‘bonding’ it to a validator, you become a nominator in the network. Validators, who earn a share of transaction fees as they validate transactions, can choose to keep a percentage of the rewards and “reimburse” themselves for the cost of running a validator node. This is the validator’s commission. Other than that, all rewards are shared based on the stake behind each validator. This includes the stake of the validator itself, plus any stake bonded by nominators.

What are the advantages of staking?

Staking is integral to the security and efficiency of all PoS blockchains. By staking your PDEX, you make the Polkadex network more resistant to attacks and you contribute to its ability to process transactions. Ideally, 50% of PDEX will be staked on the Polkadex network at all times.

Network participants and token holders also benefit from staking directly as they earn rewards on their PDEX. The rewards will be around 10% depending on the number of tokens staked.

Are there staking rewards on Testnet?

No. Not only does the Testnet not provide financial rewards, there are also no PDEX tokens in the Testnet. Testnet participants can claim Polkadex Test Tokens which serve as a simulation for what PDEX will be like on the Mainnet. The Testnet serves as a model for participants to learn how everything works and interact with the blockchain in a risk-free manner. The main gain from participating in the staking of Testnet tokens in the Testnet is to gain the knowledge to do so when the Mainnet comes along.

How can you stake Test Tokens on the Polkadex Testnet?

Getting started

Before you start staking you will need a Polkadot.js browser extension. Then you will need to create an account on the Polkadex Testnet. You can do that here. Once you have an account, you can use your account address to claim Test Tokens. In order to claim Test Tokens, tweet the following:

👋 Hey @polkadex I want to try staking Test Tokens on the Polkadex Testnet. Please send me some #PolkadexTestTokens to [ACCOUNT]! 📲

Make sure you have pasted in your Polkadex Testnet account/wallet address where it says [ACCOUNT].

Staking

1) Select ‘Staking’ from the ‘Network’ drop-down menu and then click on ‘Account actions’

2) Click the ‘+ Nominator’ button

3) Select your controller account and your stash account. While these are recommended to be different accounts for fund security, they can also be the same account. Next, select the amount you want to ‘bond’

4) Then, select which validator you want to nominate with your funds. While profitability is important, it is also important to nominate a validator you trust.

You can visit the ‘Overview’ tab in the Staking menu to see different validators’ commissions, points, and own stake.

5) Search for your desired validator and select them. For the purpose of this demo, we have selected ClusterCuss, the first-ever Testnet validator from the Polkadex community.

6) Once you’ve found your desired validator click the ‘Bond & Nominate’ button.

7) Click ‘Sign and Submit’ and approve the transaction using your Polkadot.js wallet

How to run a validator node

Although last week’s article included a helpful guide on running validator nodes on the Polkadex Testnet, some of the details may have changed due to the Testnet update. Please follow the updated Run a Validator doc on Github to set up your validator for this next phase of the Testnet.

Questions or feedback?

If you have any questions about any of the steps above or general questions about the Testnet or Polkadex as a whole, we invite you to join the Polkadex Discord server, where other participants are already connecting with the Polkadex developers!

Follow Polkadex on our official channels to connect with the community and keep up with everything happening at Polkadex, especially during the next few busy weeks!

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