Zilliqa Key Points
ZIL Staking vs Tezos/Cardano
- ZIL allows for staking across multiple pools. ADA/XTZ is all or nothing. You stake the whole wallet or none
- ZIL makes you your claim rewards just like ADA. XTZ automatically deposits to your wallet.
- ZIL makes you stake your rewards. ADA/XTZ automatically stakes your whole wallet.
- ZIL is non-custodial, which means your ZIL leaves your wallet. ADA/XTZ is custodial, so your control your coins
Multiple Pool Staking: here is the list
Zilliqa is unique in that it allows you to stake your ZIL across multiple pools. If you wanted to do this with XTZ or ADA, you would have to create multiple wallets addresses. There are two key advantages of this. For the network, it allows HODLers to spread the staking so one or two pools do not control the staking. Just like it is not good for one mining pool to control a majority of the mining for any coin, it is not good for staking. Right now, this is occurring with ZIL. At the time of this writing, Moonlet and Zillacracy controls 80% of the staking. This is down from 90% on the first day. Over time, I think this will drop even more.
The second benefit is for the Staker. If I put all my ZIL into one Operator, and that Operator has an issue, I may receive no rewards. For instance, if Zillacracy has a catastrophic failure, they will not earn for the day. If I have 1,000,000 ZEN staked to Zillacracy, I would lose about 1,000 ZEN in earnings. If I spread my ZEN equally over 4 or 5 pools, I lower my risk.
Using multiple pools is not for everyone. If you have 1,000 ZEN to stake, it is not worth spreading over multiple pools as fees will eat up your profit. You will incur a fee to stake, and then another to claim, and then again to stake those rewards. Please do your due diligence on which is best for you. See the section about Fees to get a better understanding.
ZIL Staking Cycle
The staking cycle is approximately 24 hours long. You must stake for the whole cycle. There is no staking for a partial cycle. So, if you stake after a cycle starts, you ZIL is buffered until the next cycle. Your buffered ZIL is automatically staked when the next cycle begins, you do not have to do anything other than stake your ZIL. Each cycle is 18,000 blocks. Your ZIL rewards are deposited over multiple transactions, not one large one. This site shows current block: https://viewblock.io/zilliqa
For every 1,000 ZIL you earn, you will also earn 1 GZIL. GZIL is a Governance Token that will give people a vote with the governance process of Zilliqa. GZIL is minted at the time you claim your ZIL rewards. You have one year to claim/mint your GZIL or it is burned. There will only be 722,700 GZIL minted, which means no GZIL will be awarded after Oct 14, 2021. You can go to ZILSwap to see the value of 1 GZIL. At the time of this writing it was between 6,000 ZIL and 20,000 ZIL. You will have to decide if you want to swap or HODL. It is unknown if there will ever be an open market for GZIL.
There is a fee of 0.9 ZIL every time you stake your ZIL. If you split your staking between multiple pools, you will pay this fee for each pool. For 2 pools, you will pay 1.8 ZIL. For three pools, you will pay 2.7. There is also a fee to claim your rewards. The fee is based on the last time you claimed your rewards.
1 Day – 1.5 ZIL
1 Week – 3 ZIL
1 Month – 5 ZIL
6 Months – 17 ZIL
1 Year – 30 ZIL
For large bag holders that are making 1000’s of ZIL each day or week, these fees are not import. However, for the small ZIL HODLers, you want to consider these fees. You do not want to see your profits eaten up by fees. If you are planning to claim, and then stake your earnings, it may be profitable to delay claiming. Also, consider staking earnings right after you claim. So, you are doing one claim and one stake. You want to consider the percentage of your profit that you are losing to fees.
There is an article being promoted on ZIL Telegram that shows the optimal withdrawal period depending on the amount of ZIL you have staked. Worth the time to read.
High level: under 10,000 ZIL, take rewards twice a month. Under 1,100,000 ZIL, take rewards once a week. Over 1,100,000 ZIL, take your rewards daily.
There is a 14-day bonding period when you initiate a Withdraw of Staking. Staking ZIL is for true HODLers. It is not for “weak hands” that sell at any minor drop in the market. There is not a 14-day bonding period when you transfer from one Operator to another. However, you will lose one 24-hour cycle. Tezos and Cardano has a similar concept, except it is on the front end. XTZ requires 5-6 Baking Cycles (a cycle is about 3 days) before you start earning, and then another 5 Baking Cycles as a bonding period. So, it takes about 30 days before you see XTZ deposited into your wallet. ADA requires 3 Epochs (each 5 days) before you start earning.
Rate of Return
This is based on the percentage of circulating supply being staked. The more staked, the lower rate of return. There is a fixed amount of ZIL rewards per cycle, so the more people staking, the same amount of rewards has to be divided among more people. Also, the more ZIL staked means less in circulation, which should mean a higher price.
The right column is the percent of circulating supply staked and the rate of return on your staked ZIL. The first day of staking had 1 Billion ZIL staked, which was just under 10%. We are getting close to 2 Billion at the time of this writing.