Last Update: August 2022
This is a living guide for anyone who wants to help secure Secret Network by staking or delegating their Secret (SCRT).
If you are holding SCRT coins, you could be contributing to network security and stability while earning more SCRT! Staking is a more active form of "HODLing" that puts your Secret to work while also letting you directly participate in governance of the network. This post will teach you how to get started, how to calculate your SCRT staking rewards, and even how to run your own secret node.
Staking and directly supporting the security of the network is one of the best reasons to acquire and hold SCRT. In the early stages of our network, rewards for staking are high—so it's definitely worth it to take the time to learn!
Contents of this post include:
- How does staking work on Secret Network?
- How much can I earn with staking?
- How can I stake my SCRT?
- How can I participate in governance?
- How do I change or remove my stake?
- How can I run my own secret node?
Read on for all the details!
How does Secret Network staking work?
Secret Network's consensus model is Delegated Proof of Stake (DPoS). This means that holders of SCRT can delegate their stake to a block validator of their choice. This validator earns rewards by processing transactions and computations on Secret Network, then shares some of these rewards back to their delegators according to the size of their deposits.
Validators on Secret Network are known as "secret nodes"—and they have an extremely important job. All validators on the network must maintain high uptime and utilize compliant hardware (enabled with Trusted Execution Environments) in order to remain active. With Secret Network, we have taken great pains to ensure all validators are running the latest patched versions of TEEs in order to keep the network secure.
This is very hard work for validators, so the incentives need to be strong! In return for their effort, validators receive block rewards as each new block is generated on Secret Network. (This means Secret Network is inflationary, with new SCRT being created over time as a percentage of the current total supply.) Then validators pass on a percentage of these rewards to delegators while keeping some as a commission. This commission helps to fund their operations, ensuring that they can continue operating and that Secret Network can remain sustainable.
Interested in running your own secret node? Read on!
What are the rewards for SCRT staking?
Calculating exact rewards can be challenging because there are many inputs to the equation. One input is network inflation: how much new SCRT is created with each block? Another is the staking rate: what percentage of the SCRT supply is currently being staked or delegated? Then there is the validator commission to consider, some network taxes, the number of blocks per year... it gets complicated!
Fortunately, community members are on the case. There are now a number of tools available for calculating staking returns, like this Secure Secrets ROI calculator. While there are a number of different things in motion that could impact future staking returns, right now (as of August 2022) we expect annual staking returns for delegators to be between 20 and 23%.
How can I stake my Secret?
These returns sound really good, so you might want to start staking right away! Because Secret Network uses Delegated Proof of Stake, you don't have to run your own validator on the network to start staking and earning.
Anyone can receive a share of rewards by becoming a delegator! If you hold SCRT in your own wallet (not on an exchange), you can delegate your SCRT to any validator and begin earning more SCRT right away!
There are three primary ways that people create their own wallet addresses and interact with Secret Network: web wallets, hardware wallets, and the command-line light client. Most people will prefer to use a web wallet such as Keplr for its usability advantages, but more advanced users might prefer a hardware wallet like Ledger or the command line. These are all good options!
Web Wallet (Keplr)
Keplr supports multiple Tendermint-based blockchains besides Secret Network, including the Cosmos Hub and Kava. Here's a great introduction to getting started using Keplr!
Once you install Keplr, it's fairly easy to set up a Secret wallet address by selecting "Secret Network" as your network of choice. Once you have sent SCRT to this wallet address, you're ready to begin staking! Selecting "Secret Network" on the dashboard will take you to this page where you can see a list of all active validators and their commissions.
Click on "manage" to begin managing your stake with any of the available validators! From here you'll be able to delegate your SCRT. Or, if you've already delegated, redelegate to another validator or undelegate entirely. (Don't know what this means? Read the "How do I change or remove my stake?" section of this post and make sure you understand some of the potential pitfalls!)
Hardware Wallets (Ledger)
For many users, hardware wallets are a more secure option for managing their private keys and ensuring the safety of their coins. They can be complicated at first, but they're powerful! Right now you can use a Ledger to store your Secret safely. Here's a walkthrough guide on how to set up your Ledger to generate an SCRT address.
Once you have SCRT stored on your Ledger there are a few options for staking, including connecting your Ledger to either Keplr or using the command-line light client. Here is a walkthrough written by a community member (Toni) on using Ledger with Keplr.
Command-line Light Client
Are you more experienced as a developer and prefer more granular control over your SCRT? Follow this link for full documentation of
secretcli: the command-line interface tool that enables you to interact with a node that runs on Secret Network. You'll learn how to generate keys, delegate, and more!
How can I participate in Secret governance?
SCRT not only provides the ability to receive staking rewards, it also allows you to actively participate in governance of Secret Network! Validators and delegators vote on many important issues, including the inflation rate, community pool spending, and many other aspects of network governance. Check out our Secret Governance guide here.
One of the easiest ways to participate in governance is using Secret Nodes. If you're already managing your staked coins with Secret Nodes, it's easy to see current and past proposals and cast your vote! You are also able to submit new proposals to the blockchain. Go here to see all proposals.
How do I change or remove my stake?
Once you've staked with a validator on Secret Network, you can choose to redelegate your coins to another validator or undelegate entirely.
Please be careful if you decide to undelegate your coins! You will stop earning rewards immediately and there's currently a 21-day unbonding period. That means you can't move your undelegated coins for 21 days after you begin unbonding. (If you simply redelegate from one validator to another, you won't face this restriction. However, you won't be able to redelegate those coins for 21 days.)
Whether you're using Keplr, the command line, or another option for staking your SCRT, there are ways to safely redelegate and undelegate as well. Those options are found in the same places where you originally selected your staking provider. You should familiarize yourself with all the features of whichever method you choose for managing your coins!
How can I run my own Secret node?
Staking and participating in governance is exciting, but not as exciting as running your own secret node!
Secret nodes form the backbone of our network, securing computations and ensuring stability for applications that rely on Secret Network. Running your own secret node is one of the strongest ways you can support the project and help grow our ecosystem!
Know that running a node is not always simple. There are a lot of potential challenges, especially when you need to ensure your hardware is up-to-date and patched against vulnerabilities. Fortunately, our community is actively providing support to node operators and establishing best practices.
Thanks for helping support privacy as a public good!