Staking DOT with a Figment Managed Controller
Polkadot recently launched its Proof of Authority (phase 1) mainnet and plans to transition to its Nominated Proof of Stake (phase 2) mainnet later this year. Figment has signaled support and will be accepting nominations to our nodes during phase 2. This article will highlight how nominators can fully optimize their rewards via our fully managed Polkadot controller. Check out our other articles on the Polkadot/Kusama ecosystem for more information.
Benefits of our managed controller:
- Maintain custody of your DOT at all times
- We optimize your rewards for you
- Guarantee your rewards are claimed
- Minimize slashing risks
There will be two different accounts for managing your funds:
Stash – This account directly controls the funds bonded for staking. In order to make and change staking decisions easily, and without compromising security, the stash account is used to designate a separate address called the ‘controller’ to make staking decisions, and without giving the controller direct control over the “stash” funds.
Controller – Once designated by the stash account, the controller is used to make staking decisions, like nominating and bonding. You’ll need a small amount of funds in this account to pay for transaction fees. The controller account can be changed at any time by the stash account.
Controller accounts are able to nominate to up to 16 individual validators.
Things to Consider When Staking DOT
The Polkadot network is unique in many ways and there are a few things to consider when choosing a validator to nominate to.
Polkadot’s NPoS mechanism distributes rewards on a daily basis evenly across all validators currently in the active set. Rewards will not be distributed to validators based on the amount staked with individual validators. Once rewards are distributed to validators, and the validator fees are taken into account, the rewards will be distributed to nominators proportional to amount staked. This means that a DOT holder who chooses to nominate to a validator with more stake will receive less rewards than a DOT holder who chooses to nominate to a validator with less stake.
Polkadot requires stakers to manually claim their rewards, by submitting a transaction. If stakers do not claim their rewards within 84 eras (84 days), then those rewards expire and are unrecoverable. Any staker, both nominator or validator can trigger a payout for a validator. Once triggered, rewards are dispersed to the appropriate stash or controller accounts and restaked if selected.
Validators will be slashed a fixed percentage of their stake and not a fixed amount of DOTs. This means that more DOTs will be slashed from validators with a higher stake.
Figment Managed Controller
With Figment fully-managed controller service, DOT holders are able to point to a Controller account we control, enabling us to optimally nominate your chosen validators in order to maximize the amount of rewards generated, and guarantee that those rewards are claimed for you, while minimizing risk.
It is beneficial for a staker to nominate a validator with less stake. That being said, the amount staked to any validator can always be in flux, which means that a staker will have to constantly be checking on the validators they have nominated to in order to maximize their rewards.
Connecting a stash account to our managed Polkadot controller solves this problem for stakers. We are able to control which validators you nominate to, without having custody of your DOT. This allows us to fully optimize your stake across our validators or other validators within the set.
Figment guarantees that validator rewards will be claimed for all stakers nominating our validators giving peace of mind to anyone who chooses to nominate us.
Our managed controller helps minimize risk to stakers since we distribute your stake to validators with a lower stake. We also help minimize risk by having our validators on different servers, which decreases the probability of our validators collectively experiencing downtime.
Interested in learning more about our managed Polkadot controller offering? Click the link below or email Yannick for more information. Discounts and premium features are available to large token holders via Figment Prime.