Staking

The Hedera public ledger uses a proof-of-stake consensus mechanism, in which each node’s influence on consensus is proportional to the amount of cryptocurrency it has staked. A transaction is validated and placed into consensus after it is processed by nodes representing an aggregate stake of over two-thirds of the total amount of HBAR currently staked and dedicated to securing the network. Stake is expressed as an amount in HBAR. It is important to ensure that most of the cryptocurrency is actually being staked, so that the network continues to run. This information can be referenced from the latest Hedera whitepaper.

FAQ

What is staking in Hedera?

Staking is the process of participating in a proof-of-stake system to validate transactions and earn rewards. When staked, coins are locked but can be unlocked for trading. Staking allows participants (stakeholders) to earn rewards on their holdings, typically in tokens or coins.

Is there a lock-up period when accounts are staked to a node?

No, there is no lock-up period when accounts are staked to a node. The staked account balance is liquid at all times.

How are staking rewards calculated?

The staking reward rate is determined by the Hedera Council and updated on the mainnet. Learn more about staking rewards here.

How are staking rewards distributed?

Staking rewards distribution can be triggered by several different mechanisms, such as when an account is staked to a different node, when the total number of HBAR staked to an account changes, or when the staked account is auto-renewed.

Do staking rewards expire?

Staking rewards do not expire but can only be collected for up to 365 days without a rewards payment being triggered. If more than 365 days pass without a rewards payment, rewards can only be collected for the latest 365 days periods.