Zilliqa is a high-throughput blockchain specifically designed to resolve scalability and throughput issues often seen in blockchain networks. Its approach involves implementing sharding, a technique that enhances transaction speed and establishes a scalable and secure platform.
Sharding, in simple terms, involves breaking down a blockchain network into smaller units called ‘shards’. Each of these shards can independently process its own transactions and smart contracts. This improves not only the network’s capacity but also its speed since transactions are processed simultaneously rather than one after the other. And as new nodes (or members) join the network, Zilliqa can handle more transactions, enabling it to scale with the demands of its growing ecosystem.
But Zilliqa doesn’t stop there. It makes a pioneering move by extending the concept of sharding beyond just transaction processing to include network and storage elements. This approach allows Zilliqa to process an increasing number of transactions per second as the network expands, a crucial attribute for platforms aiming to encourage mass adoption of decentralized applications (dApps).
On top of this, Zilliqa’s smart contract layer uses a unique programming language Scilla. This allows developers to create scalable dApps without fretting about high transaction fees, slow transaction speeds, or scalability issues.
Now that you’ve got an understanding of the technology behind Zilliqa let’s dive into how you can start staking on this blockchain. In this guide, we’ll walk you through staking your ZIL tokens using different platforms, including Torch Wallet, ZilPay on Zillet, and ZilPay on Zillion. Read on!
ZIL Token
As of the current data, the price of ZIL is approximately $0.02089 USD. The total supply of ZIL is 21,000,000,000, out of which 15,867,699,447 ZIL are in circulation. The market cap of Zilliqa is around $331,268,150 USD, and it ranks #97 in terms of market cap among all cryptocurrencies.
Earning Rewards with ZIL
Staking your ZIL tokens on the Zilliqa Network offers an opportunity to earn rewards. In each epoch, a certain number of ZIL tokens are distributed as rewards, and a significant proportion of this is allocated to those who stake their tokens. Additionally, all transaction fees in the network are added to these rewards, creating an incentive to stake. The quantity of rewards you can earn directly corresponds to the amount of ZIL you stake.
However, it’s important to note that the Zilliqa Network recently approved a proposal to adjust staking rewards. The decision was made to gradually reduce the staking annual percentage rate (APR) to an estimated 8%. This adjustment involves a planned reduction of the staking proportion from its initial rate, decreasing by approximately 1% each month until it reaches a new target.
Voting power with gZIL
While it’s no longer possible to earn gZIL by staking ZIL, you can still obtain it through centralized exchanges like Liquid and CEX, or through the decentralized exchange at ZilSwap. Holding gZIL gives you the power to vote on Zilliqa’s future direction.
Recently, the Zilliqa platform approved a proposal for gZIL delegation, enhancing its governance process. With this approval, a new smart contract, the gZIL delegation contract, was implemented on the network. This allows gZIL holders to delegate their voting rights without exceeding their total gZIL ownership. The Snapshot protocol has also been modified to capture the state of this contract at the voting block.
These measures aim to increase participation in Zilliqa governance, addressing previous challenges due to the fragmented nature of gZIL holdings and difficulties in reaching quorum. The introduction of gZIL delegation is expected to simplify future governance voting processes and ensure the ongoing effectiveness of Zilliqa’s governance.
For more details, you can visit the official Zilliqa governance page.
How to Stake ZIL
Step 1: Choose Your Wallet
The first step in staking Zilliqa (ZIL) is to choose a wallet that supports ZIL staking. A wallet is a digital tool that allows you to store, send, and receive cryptocurrencies. Each wallet has a pair of cryptographic keys: a public key, which is like an email address, and a private key, which is like a password.
When you choose a wallet, you’re essentially choosing a way to manage these keys and therefore manage your cryptocurrencies. There are several options available, including Torch Wallet, Moonlet, ZilPay, Ledger, Guarda Wallet, Zillet, and Atomic Wallet. All these wallets have staking enabled.
Step 2: Choose Staking Platform
After setting up your wallet, you’ll need to choose a staking platform. A staking platform is a service that allows you to participate in the network of a Proof-of-Stake (PoS) or Delegated Proof-of-Stake (DPoS) cryptocurrency by staking your coins.
When you stake your coins, you’re essentially locking them up for a certain period of time to support the operations of the network, such as validating transactions. In return, you earn staking rewards.
Step 3: Select a Seed Node Operator (SSN)
Once you’ve chosen your staking platform, you’ll need to select a seed node operator. These are trusted entities that help secure the network. You can choose your preferred SSN from the list provided on the platform.
Each SSN has its own fee structure and performance metrics, so it’s important to do your research and choose an SSN that aligns with your staking goals. Some factors to consider when choosing an SSN include their uptime, commission rates, and reputation in the community.
Everstake plays an active role in the blockchain networks we support, including Zilliqa. When you choose Everstake as your staking platform or SSN, you’re entrusting us with your staking power, and we’re committed to using that power to contribute positively to the network and earn rewards for our users.
We run our own node on these networks, using the staking power delegated to us by our users to participate in the network, validate transactions, and secure the blockchain. This is a responsibility we take very seriously, as the security and reliability of the network depend on the performance of our nodes.
Getting Started with Staking
To start staking, a minimum balance of 10 ZIL is required. However, it’s advisable for users to maintain an approximate balance of 100 ZIL in their wallet. This surplus serves to cover the costs of gas fees and any future transactions, such as fund withdrawals. When ready to stake, simply click on the Stake button and authorize the transaction through your wallet. Typically, this action incurs about 25 ZIL in fees.
Where to Stake ZIL
Navigating the world of cryptocurrencies requires a reliable digital wallet. It’s the primary tool for managing, transacting, and securing your digital assets. For Zilliqa (ZIL) holders, there are several wallet options available, each with its unique features and advantages. These wallets not only facilitate the storage and transaction of ZIL but also enable users to participate in staking and earn rewards. In this guide, we’ll explore three popular ZIL wallets: Torch Wallet, ZilPay on Zillet, and ZilPay on Zillion.
Torch Wallet
Torch Wallet is a secure and user-friendly wallet specifically designed for Zilliqa (ZIL). It offers a range of features that make it easy for users to manage their ZIL tokens. With Torch Wallet, you can stake your ZIL tokens, swap them for other tokens, and manage ZRC-2 tokens, which are tokens built on the Zilliqa blockchain. The wallet is known for its intuitive interface and robust security measures, making it a popular choice among ZIL holders.
To stake with Torch Wallet, first, click on Funding Wallet. After topping up, transfer your ZIL tokens to the smart wallet by selecting Funding wallet balance. A prompt will appear; click Continue to finalize the transfer. This ensures you have enough funds in your smart wallet for staking.
After transferring, you’ll get a confirmation notification. With your ZIL tokens now in the smart wallet, you’re set to stake. Click on the Staking tab to begin. By doing this, you’re on your way to earning rewards and contributing to the network’s consensus.
For a detailed guide on how to create and use Torch Wallet, please refer to our comprehensive guide, How to Stake the Zilliqa Token (ZIL) via the Torch Wallet.
ZilPay on Zillet
ZilPay is a versatile wallet that can be used as a browser extension or a mobile app. It’s designed to provide a seamless experience for Zilliqa users, allowing them to interact with dApps, store and manage ZIL and ZRC-2 tokens, and more. One of the key features of ZilPay is its integration with Zillet, a blockchain explorer and wallet for Zilliqa. This integration allows users to easily track their transactions and manage their ZIL tokens. For a step-by-step guide on setting up and using ZilPay on Zillet, please check out our detailed guide, How to Stake Zilliqa (ZIL) Using ZilPay on Zillet: A Step-by-Step Guide.
ZilPay on Zillion
Zillion is a platform that provides a user-friendly interface for managing ZIL tokens and participating in staking. It’s integrated with ZilPay, making it easy for users to manage their funds and stake ZIL. Zillion’s interface is designed to provide users with a clear overview of their staking activities, making it a popular choice for those who want to earn rewards through Zilliqa’s staking program. For more information on how to use ZilPay on Zillion, please refer to our comprehensive guide, How to Stake Zilliqa ($ZIL) Using the ZilPay Wallet on Zillion: A Step-by-Step Guide.
How stZIL and liquid staking works on Avely
Avely’s liquid staking protocol provides a solution that lets users earn staking rewards while maintaining access to their funds through the stZIL token. This approach doesn’t lock the funds like traditional staking. Instead, it provides stZIL, which can be used for various purposes, including payments.
To initiate liquid staking on Zilliqa, users access the Avely Finance dApp, connect a compatible wallet, and stake their desired amount of ZIL. Upon confirming the transaction, users receive stZIL tokens equivalent to their stake.
Avely also facilitates a smooth transition for users already staking ZIL via another SSN to liquid staking using the Convert feature in the dApp. All staking rewards are automatically re-staked, and users can withdraw their funds anytime as per standard ZIL staking rules.
Funds staked through Avely are managed by a smart contract that calculates an “honest price” for withdrawals, including all ZIL rewards with auto re-staking. Avely’s protocol imposes a 10% fee on all ZIL rewards, which can be offset by auto-compounding interest.
Alongside the protocol launch, Avely Finance introduced Avely Swap, a service that enables users to directly swap stZIL for ZIL and provide liquidity. This feature allows users to earn fees for providing liquidity using stZIL and ZIL.
Pros of Zilliqa (ZIL) Staking
High Security and Performance: Zilliqa is a high-performance, high-security blockchain platform. It was the first public blockchain to implement sharding on its mainnet, which enhances its performance and security.
Passive Income: Staking ZIL tokens can provide a source of passive income, similar to a savings account in a bank. The annual percentage yield (APY) for non-custodial staking on Zilliqa depends on the total amount of ZIL in circulation being staked. For instance, if 80% of the total amount of ZIL in circulation is staked, users can expect an APY of approximately 6%.
Decentralization and Community Involvement: Staking pushes Zilliqa’s network’s decentralization to a new level and brings more benefits to the wider community. It also allows long-term token holders and frequent engagers to become decision-makers in the Zilliqa ecosystem through the governance ZIL (gZIL) tokens.
Cons of Zilliqa (ZIL) Staking
Risk and Complexity: While delegating ZIL is considered easy in terms of risk and complexity, running a seed node is considered high risk and requires professional-level knowledge.
Minimum Staking Requirement: There is a minimum amount of ZIL required to participate in staking. You need at least 10 ZIL to be able to participate in staking. It is recommended to have over 100 ZIL to cover gas fees and future transactions such as withdrawing funds.
Lock-Up Period: There is a lock-up period for staked ZIL. The lock-up period (aka bonding) is around 14 days. This arrangement incentivizes longer-term holders to stake ZIL and encourages token holders to secure the network.
Buffering Period: When you stake your ZIL, it goes into a “buffering” state, meaning your ZIL is in line to be staked during the next reward cycle. One reward cycle is processed in around a day or 1800 DS blocks.
Claiming Your Reward
ZIL staking operates on a manual claiming system. You can expect your first reward to show up between 24 to 48 hours after you’ve delegated your tokens. Following that, you’ll receive rewards roughly every day at the conclusion of each epoch. Here’s how you can claim your reward:
-
Open up your ZIL wallet and navigate to the Staking tab.
-
Look for the Claim button and give it a click. Just a heads up, the maximum network fee is 120 ZIL, so you’ll need at least that much in your account to claim your reward.
Unstaking Your ZIL
If you decide you want to unstake your ZIL, here’s what you need to do:
-
Open your ZIL wallet and click on the Staking tab.
-
Click on Unstake and enter the amount you wish to unbound, then click Next. It’s important to remember to claim any outstanding rewards before you start the unstaking process.
-
You’ll be taken to a confirmation screen where you can check all the details. Once you’ve confirmed everything is correct, click Confirm. You’ll need to cover the network fee, so make sure you’ve got enough ZIL in your balance.
-
Now, you just need to wait for the withdrawal. Your unbounded tokens will be locked by the Zilliqa network for 14 days, during which you won’t receive any rewards. Once the 14-day period is up, you can get your tokens back by clicking Withdraw.
Remember, whether you’re claiming rewards or unstaking your ZIL, it’s all part of actively managing your digital assets. Stay informed and make the choices that best suit your financial goals.
The Takeaway
Staking Zilliqa (ZIL) offers a unique opportunity for token holders to actively participate in the network while earning rewards. This comprehensive guide has provided you with the necessary steps and insights to begin your staking journey. Whether you choose traditional staking or explore the flexibility of liquid staking with platforms like Avely Finance, remember that staking is not just about earning rewards but also about supporting the network’s security and stability. As the Zilliqa ecosystem continues to grow and evolve, staking will undoubtedly play a crucial role in its development.
As a trusted staking provider, we facilitate the staking of Zilliqa, among numerous other cryptocurrencies. By delegating your ZIL to Everstake, you can earn consistent rewards while contributing to the seamless functioning of the backbone of the future economy. Our dependable staking services enable you to participate in Zilliqa’s growth and potential, all while earning rewards for your contribution. For more comprehensive information, please feel free to contact our Zilliqa Blockchain Manager on X.
