If you participated in the HydraDX Liquidity Bootstrapping Pool, you can now swap your xHDX, which are ERC-20 token running on Ethereum, to HDX token, which are native substrate—based assets. This is necessary to participate for you to use your token in the Polkadot ecosystem. You can learn how to swap your xHDX ERC-20 token to HDX token in this community-generated video tutorial or via this official guide.
Snakenet is the incentivized testnet for the HydraDX network that will transition into mainnet after several phases have been completed. During Snakenet, HDX token transfers are enabled and the HydraDX team holds Sudo keys. These are security measures until the network runs stable and everything has been tested thoroughly. While staking rewards can be earned right away, slashing will be implemented in later stages. You can learn more in this official Snakenet walkthrough.
The Relay Chain is the main chain of the Polkadot ecosystem (incl. Kusama/Edgeware/HydraDX). Your validator nominations count for the validators of the Relay Chain.
Most of the computation happens on Parachains, which are connected to and secured through the Relay Chain. Learn more about the status of Parachains here.
HDX holders can economically back up to 16 validators through their nominations. This increases the security of the overall network and enables token holders to earn rewards on their staked funds. You will receive rewards in the form of newly minted HDX. Conversely, if you do not participate in staking, your assets will get diluted over time.
You remain in full control over your HDX tokens when you stake. You simply delegate the right to propose blocks and validate transactions contained in each HDX token to the validators you nominate. However, please note that your tokens are illiquid while staked. You need to unbond in order to move your funds.
In substrate-based blockchains such as HydraDX both, validators and nominators can be subject to punishment in case of malpractice. This is referred to as "slashing" and can result in a (partial) loss of staked funds. Please note that during Snakenet, staking rewards can be earned right away, whereas slashing will be implemented in later stages. Slashing in HydraDX is a multi-level process according to its severity:
Our nodes are deployed at Tier 3+ data centers and protected by server-grade hardware security modules. We run nodes in different geographical regions to guarantee high security and availability. Furthermore, we put down a substantial self-bond for each of our validators, so our financial incentives are aligned with those of our customers.
There are two different accounts to manage your funds, namely the Stash Account and the Controller Account.
Stash Account: This account holds the funds which are bonded for staking. This is sort of your "safety box". Most functions relevant for your staking operations are done via your "Controller Account".
Controller Account: Through this account, you nominate the validators of your choice. The Controller account only needs funds to cover transaction fees, so make sure to allocate some funds for that.
Since transfers are disabled on the HydraDX Snakenet, it is currently not possible to use separate accounts. We highly recommend that you switch to separate Stash and Controller accounts as soon as this becomes possible in future.
No, you can only create one Controller Account per Stash Account.
Validators are elected each era (24h for Polkadot & Hydra; 6h for Edgeware & Kusama) to perform block production and validation. The more nominations a candidate has, the more likely it will be elected to the active validator set. Nominators can submit a list of up to 16 candidates that they want to back with their token. The list is without an order of preference.
Please note that your stake is distributed between the validators for each era separately. Since this is done automatically by the protocol and in a fashion to distribute voting power as equally as possible between all validators, it can happen that not all of your stake is distributed during one era. You are therefore best advised to nominate more than one validator in order to increase your return.
Every era, the validator set gets shuffled. Your bonded stake gets distributed among the validators you nominated and that got elected to the active set for that era. It is therefore advisable to nominate more than one validator, because if you e.g. only nominated one validator and he/she did not make it into the set, you will miss out on rewards for that era. You are best advised to nominate popular validators with a good reputation and track record (check the information provided in their on-chain ID). In order for you to increase your returns, you can also nominate a couple of smaller, less-popular validators with less stake backing them.
Make sure you do proper research on the validators you nominate since your stake is also subject to getting slashed in case of your validator misbehaving.
Here is a good overview by the Polkadot team of best practices when choosing your validators.
In order to successfully nominate validators, you need to make sure that your Stash as well as your Controller Account are properly funded. This is required since actions undertaken with the Controller Account incur transaction fees that need to be covered. We suggest funding it with a minimum of 3 token.
That is totally normal since it takes ~ one epoch until your nominations become active, so just check again after a couple of hours to a day and you should see your nominations as active.
After you stopped your nomination and sent the un-bonding transaction, your funds will remain locked and illiquid for 28 days. This is a security measure stipulated by the protocol. Learn how to unbond here.
At the end of every era, so every 24 hours. Please note that you need to withdraw your rewards regularly otherwise they will be gone after 84 days.
Rewards have to be withdrawn manually. If you do not claim your rewards, they will be lost after 84 eras (~84 days). To claim your rewards, click "Payouts" in the "Staking" section of Polkadot JS . There you find a list of all the validators you nominated in the past 84 eras as well as the option to trigger payouts of all unclaimed rewards. Please note that this action will incur transaction fees. Triggering a payout transaction automatically pays out every nominators' rewards for the same validator, so other nominators that nominated the same validator, as well as the validator itself, can claim rewards for you.
In Polkadot JS under "Network" / "Staking" / "Account actions", click the three dots next to "Stop". Click "Change controller account" in order to choose another controller account for your staking operations. Make sure that you are connected to the correct network (upper left corner).
Unfortunately we cannot answer this question in a general manner as tax regulation differs among legislations. Nevertheless, we advice you to always track your staking operations so you can provide a detailed history of your staking rewards.
In Polkadot JS under "Network" / "Staking" / "Account actions", click the three dots next to "Stop Nominating". Click "Change reward destination" in order to change the destination of your rewards.
In the Polkadot UI under "Staking" / "Account actions", click the three dots next to "Stop". There click "Bond more funds" in order to increase your stake.
In the Polkadot UI under "Staking" / "Account actions", click the three dots next to "Stop". There click "Unbond funds" in order to undbond your funds. Please note that if you have bonded your tokens, the 'Lockup Period' needs to pass before you can unbond. Once your tokens are unbonded, you need to issue another transaction, namely "Withdraw Unbonded" in order to be able to transfer your funds.
In case you want to stop your nominations, you can do so in Polkadot JS under "Network" / "Staking" / "Account actions" by clicking "Stop Nominating".
In case you want to nominate more validators, click the gearwheel next to "Stop Nominating" and then select "Set nominees". Make sure you are connected to the correct network (upper left corner).
In substrate-based chains, there is no limit on how many nominators can nominate a single validator, however there is a maximum amount of nominators that can back a single validator in the active set. Beyond that limit, the validator is considered oversubscribed and it will only be elected using the maximum allowed number of nominators. Nominators with a higher stake take precedence, so nominators with a lower stake than the lowest stake nominator of maximum allowed number of nominators are disregarded and will not earn any awards during that era.
The limit of maximum allowed nominators are:
Polkadot, Kusama & Edgeware - 128 nominators
Hydra - 64 nominators
In Substrate-based chain such as Polkadot, Kusama, Edgeware and HydraDX, you are advied to nominate more than one validator (up to 16). Each era, validators are elected to the active validator set and stake is divided among the elected validators according to the 'Phragmen' algorithm to optimize for equal distribution. Therefore, your nominations can have different statuses:
Usually, you only have one nomination shown as 'active'.