Today, the crypto wallet has been seen as a new avenue of financial freedom, but Klever Wallet has taken this to a new level by having a ‘nominate validator’ feature for users.
In this new feature, Klever allows users to nominate a Polkadot validator and earn rewards. So far, users can stake their crypto assets and earn passive income, swapping with over 300+ crypto tokens along with this new feature. But to nominate users need to hold Polkadot (DOT) tokens in their wallet. If the user doesn’t have it, they can easily buy it in their wallet using their debit/credit cards.
Before we understand how to complete the process of nomination, let’s first learn about Polkadot.
What is Polkadot?
Polkadot is an open-source sharded multichain protocol built for everyone. It connects private and consortium chains, public and permissionless networks, oracles, and future technologies that are in the making.
The blockchain network is empowering developers to develop a better internet so that large companies cannot violate the privacy and trust of users.
It also helps the internet where independent blockchains can exchange information and transactions in a trustless way via the Polkadot relay chain.
Polkadot unites a network of heterogeneous blockchains called parachains and parathreads. These chains connect to and are secured by the Polkadot Relay Chain. They can also connect with external networks via bridges, according to Polkadot Network.
Important features of Polkadot
- Relay Chain: It is the heart of the network and helps to create consensus, interoperability, and shared security across the network of different chains;
- Parachains: Are independent chains that can have their own tokens built for specific use cases;
- Parathreads: It is similar to parachains but it provides flexible connections based on an economical pay-as-you-go model;
- Bridges: It allows parachains, parathreads to connect and communicate with external blockchains.
How to nominate
Users need to have a minimum of 2 DOT in their wallet to add a nominator. Once the user has DOT, let’s start the process of nominating.
- Open the wallet, go to the portfolio page, and click on the Polkadot token.
- Users can now see Send, Receive, Scan, Charge, Buy, Bonding, and Nominate tabs.
- Click on the Nominate tab, it will take you to the nominate page, now select a good validator and stake your DOT.
- Users can select up to 24 validators and nominate them to earn rewards.
Nominating is the process of bonding and then nominating a validator. Also known as staking on other networks.
If a user has an account with DOT and wants to earn a fresh DOT, they can do so as a validator, which requires a node running 24/7. If a user does not have such a node or does not want to bother, the user can still earn DOT by nominating (staking) one or more validators.
By doing so, users become a nominator for the validator(s) of the choice. Pick the validators carefully, if they do not behave properly, they will get slashed and users will lose DOT as well. Staking rewards can be shared if users follow the rules of the network.
While users’ DOT is staked by nominating a validator, they are ‘locked’ (bonded). Users can receive a new DOT in your account but you cannot stake a validator or transfer DOT away from your account.
Users can now un-nominate at any time to stop stalking your funds. Keep in mind that the un-nomination is effective in the next era, and that un-nominating does not automatically unbond your funds. There is an unbonding period of 7 days on DOT.
Before you nominate, you first need to bond their DOT.
Select bonding, that user is about to bond their DOT. The amount users bond is locked and will take 7 days on DOT to unbond. While bonded AKA locked you cannot send/receive.
Users now need to choose the amount to bond and select that the rewards can either be
- Sent to another address
- Sent to stash account (Increase stake), this means will just be added to the existing amount that is bonded in the same account. So it will be like compounding the stake as rewards will keep going to your stake.
- Stash account without increasing stake means will go to the same account without increasing the stake/bonded value. The rewards will be available to send/receive/etc.
Once the user has selected the bond amount, submit the transaction.
Users will now see that it is bonded. This means users have locked these tokens and are now ready to choose validators to back. Now, select nominate to get to the window of which validators you want to back.
Here users will choose which validators to nominate. Users should see the reward and nomination status. Users’ nominations will be effective in the next era; once effective at the end of that era you will start receiving rewards.
What is Era?
Era is a (whole) number of sessions, which is the period that the validator set (and each validator’s active nominator set) is recalculated and where rewards are paid out.
Eras are roughly 6 hours on Polkadot. So the first time you nominate it can take 12-18 hours before you see rewards.
You can select up to 24 validators to nominate. Users’ stake will automatically be allocated when a new era starts.
What is Epoch?
An epoch is a time duration in the BABE (Blind Assignment of Block Extension), a Polkadot’s block production mechanism protocol that is broken into smaller time slots. Each slot has at least one slot leader who has the right to propose a block.
Users’ stake will either back one validator or may be split among one or two validators. Users cannot dictate the split and will be done automatically by an algorithm called phragman on Polkadot.
However, users can choose from the extensive list of validators. We would however have highlighted 2 trusted validators and recommend selecting a minimum of 2, ideally up to 5 validators.
This will ensure your stake always has someone to stake on. Selecting 1 validator could lead to eras with no rewards.
Select your validators Kleverly as Polkadot does make use of slashing for validators that do not behave.
After a day you will see the balance increase. This is a reward that is paid out. A very important note is that DOT rewards are paid out when the first nominator claims. This means that if validator Klever has 100 nominators when 1 of those nominators claims after the era has completed it will pay that 1 nominator plus the 99 other nominators.
So if you are using Klever Wallet and have learned about this now, nominate a Polkadot validator and earn DOT in rewards.