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Overview of Staking in Core Chain

Staking is a fundamental aspect of the Core Chain, serving as a key mechanism for network security, governance, and tokenomics. By staking their BTC or CORE tokens, participants contribute to the operational efficiency and security of the blockchain, while earning rewards for their commitment. This process involves locking up BTC or CORE tokens to support the validation of transactions and the maintenance of the network's integrity. The most bonded validator candidates of staking will become validators and produce blocks.

How Staking Works on the Core Chain​

Staking in Core Chain involves CORE and BTC holders delegating their tokens to validators, who are responsible for processing transactions and creating new blocks. The staking mechanism is built on a Delegated Proof of Stake (DPoS) model, where stakeholders influence the network’s consensus by selecting validators based on their staked tokens.

  • Validator Selection: BTC and CORE holders can choose validators they trust and delegate their respective tokens to these validators. The weight of a validator in the consensus process is directly proportional to the amount of BTC and CORE staked with them.
  • Staking Rewards: Validators and their delegators, both CORE and BTC stakers, earn rewards based on their contribution to network security. These rewards are derived from transaction fees and new blocks created during the consensus process.

Staking Economics​

  • Core blockchain allows staking of two tokens, namely, its native token i.e. CORE and the bitcoin. BTC holders can stake their assets through the non-custodial staking fearture of Core that allows BTC holders to stake and delegate their assets without having to give up custody of them.
  • The CORE validator set is determined by its staking and delegation logic, via a staking module.
  • Cycle time for Core to distribute rewards currently set to 1 day. Each day, 21 validators with the highest hybrid scores are elected to the validator set, thereby becoming responsible for producing blocks on the Core network for the entirety of the round. At the last block of each round, the accumulated rewards for the round are calculated and distributed.

Importance of Staking in Core Chain​

Staking is crucial for several reasons in the Core Chain ecosystem:

  • Network Security: Staking BTC and CORE tokens to support validators directly contributes to the robustness of the network’s security. Validators with a higher stake are deemed more trustworthy, as more at stake disincentivizes malicious behavior.
  • Decentralized Governance: Staking empowers CORE holders with governance rights, allowing them to participate in important decisions that affect the network, including protocol updates and improvements.
  • Economic Incentives: The staking model aligns the interests of both CORE and BTC token holders with the overall health of the network. By staking their tokens, BTC and CORE, participants can earn passive income in the form of staking rewards, thus incentivizing continuous support and investment in the network.
  • Reduced Volatility: By locking tokens into staking contracts, the circulating supply of CORE tokens is effectively reduced, which can help mitigate price volatility and maintain the token’s value.

Staking Dynamics and Strategies​

Participants in Core Chain network can adopt various staking strategies to maximize their returns and influence on the network:

  • Long-term Staking: Committing their assets, BTC or CORE, for longer durations typically yields higher rewards, as it provides more stability to the network.
  • Validator Performance: Choosing high-performing validators is crucial, as rewards are partly based on the validator's effectiveness in managing the network and creating blocks.
  • Risk Management: Diversifying the delegation across multiple validators can help mitigate risks associated with the potential underperformance or failure of a single validator.

Conclusion​

Staking is a critical component of the Core Chain ecosystem, offering a compelling blend of rewards, governance participation, and enhanced network security. By engaging in staking, BTC and CORE token holders not only help secure the network and drive its governance but also stand to gain from the economic activities generated within the blockchain. As Core Chain continues to evolve, staking remains a pivotal activity, underscoring the decentralized and participant-driven nature of the blockchain.