P2P.org Blog: Insights, Guides, and News (Page 10)

Economy, Cosmos Slashing overview in cosmos network

We can define a cosmos network as a social galaxy with various entities and different types of participants who are fully self-responsible for decisions they make. To make such system as healthy as possible, minimize cheating and other fraudulent behavior that cause loss of confidence, it should contain a set of rules, instruments and other incentives which will determine the right direction together with moral ethics.Slashing is an event, which results in a loss of stake percentage, depending on the type of network violation and jeopardizing the safety of other participants. It represents not only a financial incentive to act properly but also is a measure to prevent nothing at stake problem.Cosmos is a complex ecosystem where atom act not only as an economic incentive but also represent a governance unit playing a crucial role in ecosystem security. In that way, slashing becomes a tool that influences voting power distribution.Besides, it affects the authority of caught fraudlent participant, motivates validators to improve their infrastructure and in case of delegators, to provide a deeper due-diligence and diversification amongst validators. Slashing also act as a decentralization mechanism motivating re-delegate atoms to more reliable or even smaller validators with equal level of security and infrastructure set up.For now this motivation can be not so obvious but after enabling Inter Blockchain Communication (IBC) and feature of shared security when validators will be slashable on multiple validated chains slashing risk will be different for all validators depending on conditions and number of chains they operate.<h1 id="slashing-events">Slashing events</h1>There are two types of events when stake liquidation happens:<ul><li>Downtime occurs when validator is offline and do not participate in block commitment signing less than <code>5%</code> of the blocks in a row of <code>10 000</code>. This situation leads to loss of <code>0,01%</code> stake not only for validator but for bonded to him delegators as well. In addition, validator drops out of the consensus and do not earn block rewards for at least <code>10 minutes</code>. After fixing the issues validator can re-join validators set by sending un-jail transaction.</li></ul><figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2020/09/1-14.png" class="kg-image" alt loading="lazy" width="647" height="151" srcset="https://p2p.org/economy/content/images/size/w600/2020/09/1-14.png 600w, https://p2p.org/economy/content/images/2020/09/1-14.png 647w"></figure><ul><li>Double-sign can lead to more harmful consequences than the previous one. It can cause double-spend or chain fork. The wrong setup of the validator’s infrastructure or key compromise are the most common occasions that cause this type of slashing. In this case, stake penalizes by <code>5%</code> and validator loses the right to propose blocks and earn rewards without an ability to un-jail. All delegators of this validator enter the unbonding period, which lasts <code>21 days</code>. </li></ul><figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2020/09/2-17.png" class="kg-image" alt loading="lazy" width="652" height="195" srcset="https://p2p.org/economy/content/images/size/w600/2020/09/2-17.png 600w, https://p2p.org/economy/content/images/2020/09/2-17.png 652w"></figure>Slashing also affect atoms, which were in unbonding phase at the moment when one of these events happened. If a validator have low self-bonded ratio (low self-delegated amount) and large amount bonded then, in theory, it could have economic incentive to double-sign. This behaviour will lead to a loss of confidence in this validator and as a consequence inability to earn transaction fees and atom provisions in future missing opportunity of the long term ecosystem adoption and development.Validators with low self-delegated amount should be able or will have to find the way to maintain resilent infrastructure with low costs in order to increase self-delegation and/or commision rate while bonded atoms to them are increasing.If self-bonded ratio is decreasing or low in some cases (for instance, validator bonded to other validators in order to diversify holdings or increase network decentralization), if validator charges fair commission long term incentives should overcome short term gains. Commission rate should be reasonable and cover existing expences. If a validator with high stake is not earning to maintain infrastructure and operations (by self-bonded amount that generate rewards and/or commission rate) it is at least concerning.<h1 id="how-slashing-works-in-theory">How slashing works in theory</h1>Assume that we have three validators:<ul><li><code>V1</code> with a commission of <code>5%</code></li><li><code>V2</code> with a commission of <code>8%</code></li><li><code>V3</code> with a commission of <code>9%</code></li></ul>If delegator bond to <code>V1</code> with an annual return on staking (RoS) around <code>10,2%</code> for 5 years and without taking advantage of compounding, then his cumulative interest for five years nominated in atoms will be <code>48,5%</code>. Let’s have a look at how monthly compounding with slashing will affect this number. To simplify calculation we assume that: In the case of downtime, it happened three times and delegators stake passively without re-delegating after the first event:<ol><li>End of the 2nd month and <code>2 days</code> passed before un-jail</li><li>End of the 7th month and <code>1 day</code> passed before un-jail</li><li>End of the 11th month and <code>1 day</code> passed before un-jail</li></ol>In the case of double-sign, slashing and unbonding period occurred once at the end of the 12th month. After <code>21 day</code> of unbonding delegator bonded to another validator with the same commission rate. I will use the same conditions for other comparisons in this article. Overall result for delegator will look like:<figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2020/09/3-16.png" class="kg-image" alt loading="lazy" width="1062" height="535" srcset="https://p2p.org/economy/content/images/size/w600/2020/09/3-16.png 600w, https://p2p.org/economy/content/images/size/w1000/2020/09/3-16.png 1000w, https://p2p.org/economy/content/images/2020/09/3-16.png 1062w" sizes="(min-width: 720px) 720px"></figure>We can notice that:<ul><li>Delegator who took advantage of monthly compounding even with a double-sign event outperformed another one who just delegated once and forgot. The magic of this feature I will cover in the next article.</li><li>Downtime has not much influence on the result for delegator even if it happens quite often and validator re-join validator set much later than current jail time for downtime (10 minutes). It has a bigger influence on the validator in the long term. His delegators will lose confidence and will immediately re-delegate their holdings to others. Until validator un-jail, the staked ratio will be lowered by the number of atoms delegated to him. This will increase voting power of other validators resulting in higher probability of proposing a block and may lead to higher transaction fee gais in comparison with validators who often go offline.</li><li>Double-sign has the most harmful event on RoS and the difference is about <code>9%</code> in comparison with delegator who have chosen an honest and secure validator</li></ul>If we will compare the performance of delegators who bonded to different validators with a various commission rate, we will see that RoS for <code>V3</code> is higher than RoS for <code>V1</code> and <code>V2</code> if double-sign occurred. For a taken period of 5 years this will be correct even if the commission of <code>V3</code> will be <code>16%</code> that is more than three times higher than the <code>5%</code> commission of <code>V1</code>.<figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2020/09/4-11.png" class="kg-image" alt loading="lazy" width="1062" height="535" srcset="https://p2p.org/economy/content/images/size/w600/2020/09/4-11.png 600w, https://p2p.org/economy/content/images/size/w1000/2020/09/4-11.png 1000w, https://p2p.org/economy/content/images/2020/09/4-11.png 1062w" sizes="(min-width: 720px) 720px"></figure>You can notice that in the longer term (in our example >5 years) current double-sign slashing do not cause huge effect on the performance and there still exist high incentive for delegators to choose validators basing predominantly on the commission rate. In theory, this may cause weaker decentralization level of the network.Downtime slashing has even less voting and economic influence. Current slashing conditions should be considered as a starting point for further discussion on that topic and may be changed in future via governance mechanism.For example, every repeating downtime event over the period of <code>X</code> could cause atom slashing equivalent to <code>prev_slashing_percentage * 2</code>. If a validator constantly goes offline this will cost more for him and his delegators thus increasing incentive to properly maintain the state of own infrastructure and for delegators to re-delegate to others. One of concerns about changing initial parameters is a lack of empirical data so as the network evolve we will see more experiments in this field.<h1 id="smart-ideas-for-delegators-to-protect-from-slashing-consequences">Smart ideas for delegators to protect from slashing consequences</h1>No one can predict the future and one of the best ways for delegators to protect themselves from misbehavior is diversification. Suppose that delegator bonded all his atoms to <code>V1</code> with the lowest commission possible, <code>5%</code> in our case. Another delegator diversified amongst all three validators equally - <code>33%</code> for each. If <code>V1</code> will be caught on double-sign, the second delegator will get <code>2,5%</code> higher RoS than the first one who put all atoms in one basket even if <code>V2</code> & <code>V3</code> went offline for some reason.Another idea is responsible behavior. Bonding to a validator is not a blind step and simple way to earn passive income. To be up to date delegators should continue to monitor validator uptime. Frequent downtimes may indicate unreliable infrastructure.<ul><li>What actions validator take in order to prevent slashing conditions?</li><li>Does valiadator disclose an infrastructure setup?</li><li>Is it secure?</li><li>What upgrades and improvements are in the roadmap?</li><li>Is the commission rate sufficient to support validator activities and maintain reliable infrastructure?</li><li>What is the responsibility level of a validator and how valuable is it's contribution to the ecosystem development?</li></ul>Answers to these questions can help delegators to diversify amongst the most remarkable validators.The most prominent validators who set up well-protected infrastructure and have a high level of confidence can offer refunds for their delegators in case of slashing event. In this case reserve funds or the idea of developing slashing insurance for delegators make sense. For some delegators who have no ability to follow up with the state of their atom performance this could be a reasonable solution.<blockquote>The first rule – do not lose your money, the second rule – remember of the first one. "Warren Buffet"</blockquote>In the cosmos ecosystem, your atoms are your assets, which can generate additional income for you. Take care of your holdings and be responsible for the decisions you make.<hr>P2P Validator offers high-quality staking facilities and provides up to date information for educational purposes. Stay tuned for updates and new blog posts.<hr>Web:<a href="https://p2p.org/?ref=p2p.org"> https://p2p.org</a>Stake ATOMs with us:<a href="https://p2p.org/cosmos?ref=p2p.org"> https://p2p.org/cosmos</a>Twitter:<a href="https://twitter.com/p2pvalidator?ref=p2p.org"> @p2pvalidator</a>Telegram:<a href="https://t.me/p2pvalidator?ref=p2p.org"> https://t.me/p2pvalidator</a>

Alex Bondar

from p2p validator

Staking How to delegate Cosmos Atoms with imToken wallet (Android, iOS)

<h2 id="step-1-download-imtoken-wallet">Step 1. Download imToken wallet</h2>Download imToken wallet for <a href="https://itunes.apple.com/us/app/imtoken2/id1384798940?ref=p2p.org">iOS</a> or <a href="https://play.google.com/store/apps/details?id=im.token.app&ref=p2p.org">Android</a>, securely save mnemonic phrase and password<h2 id="step-2-select-cosmos-and-transfer-your-atoms">Step 2. Select Cosmos and transfer your Atoms</h2><ul><li>Select Cosmos from the list & copy your address</li><li>Transfer your Atoms to imToken wallet</li></ul><figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2020/09/47861351251_5ecee94080_o.png" class="kg-image" alt loading="lazy" width="2000" height="1665" srcset="https://p2p.org/economy/content/images/size/w600/2020/09/47861351251_5ecee94080_o.png 600w, https://p2p.org/economy/content/images/size/w1000/2020/09/47861351251_5ecee94080_o.png 1000w, https://p2p.org/economy/content/images/size/w1600/2020/09/47861351251_5ecee94080_o.png 1600w, https://p2p.org/economy/content/images/size/w2400/2020/09/47861351251_5ecee94080_o.png 2400w" sizes="(min-width: 720px) 720px"></figure><h2 id="step-3-stake-your-atoms-and-get-rewards">Step 3. Stake your Atoms and get rewards</h2><ul><li>Select “Staking” button to start delegating</li><li>Select “Validators” tab</li><li>Choose P2P Validator from the validator list</li><li>Enter the amount and press the “delegate” button.</li><li>Enter your password to confirm the delegation</li></ul><figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2020/09/40894825453_44d5b3b78e_o.png" class="kg-image" alt loading="lazy" width="2000" height="644" srcset="https://p2p.org/economy/content/images/size/w600/2020/09/40894825453_44d5b3b78e_o.png 600w, https://p2p.org/economy/content/images/size/w1000/2020/09/40894825453_44d5b3b78e_o.png 1000w, https://p2p.org/economy/content/images/size/w1600/2020/09/40894825453_44d5b3b78e_o.png 1600w, https://p2p.org/economy/content/images/size/w2400/2020/09/40894825453_44d5b3b78e_o.png 2400w" sizes="(min-width: 720px) 720px"></figure><h1 id="congratulations-now-you-can-sit-back-and-watch-your-rewards-grow-">Congratulations! Now you can sit back and watch your rewards grow.</h1>If after following this guide you still have questions, issues or other concerns please follow us on <a href="https://twitter.com/p2pvalidator?ref=p2p.org">Twitter</a>. We will provide a personal consultation and guide you through the following process.Whether you chose to delegate your digital assets to P2P Validator or not, we welcome you to join our social channels, educational hub and use our DApps, all of which will be open-source.Public website: <a href="https://p2p.org/?utm_source=lunie_post&utm_medium=creds_link&utm_campaign=blog">p2p.org</a>Medium: <a href="http://medium.com/p2peconomy?ref=p2p.org">medium.com/p2peconomy</a>Twitter: <a href="http://twitter.com/p2pvalidator?ref=p2p.org">twitter.com/p2pvalidator</a>Telegram: <a href="http://t.me/p2porg?ref=p2p.org">t.me/p2porg</a>

Pavel Pavlov

from p2p validator

Economy, Cosmos Introduction to Cosmos economy

To understand economical structure of Cosmos we should look closely at the key principles of the ecosystem, basic incentives for all different participants and possible influence of these principles on their behavior. Overall network purpose (mission) is satisfying the needs of ecosystem users by giving them an opportunity to provide their services in a decentralized manner with the ability to interoperate without centralized entities.Cosmos network consists of application-specific blockchains (Zones) which can be designed differently depending on the utility purpose. All blockchains are interoperable within a single ecosystem connected through intermediary blockchains (hubs) that in fact replace centralized organizations by set of validators. As a separate blockchain each zone can have its own token to govern the private or public network and have its own set of validators but governance can decide that validators of the Cosmos hub will be required to validate additional zones.Cosmos ecosystem utilizes Tendermint - practical byzantine fault tolerance (PBFT) consensus mechanism. It means that finalizing blocks depends on 2/3 plus one quorum of all validators agreed on the current state of the network in order to reach the consensus. There are three key groups of participants in Cosmos ecosystem. Each group has its own incentives and impact on the state of ecosystem.<h3 id="validators">Validators</h3>For Cosmos hub there are <code>100</code> possible validators, who are responsible for proposing new blocks and validating transactions. This number will rise by <code>13%</code> a year until it reaches three hundred maximum possible validators. For other hubs and zones this number is not mandatory and will depend on the particular use case and required level of security. If there are more validators then the right to participate in consensus will have participants with the higher amount of ATOMs bonded. <figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2020/09/1-15.png" class="kg-image" alt loading="lazy" width="558" height="79"></figure>Cosmos hub validators has the highest impact on network security and provide intercommunication between zones. They must actively participate in governance and are required to vote on every proposal otherwise their ATOMs are at the risk of being slashed (currently this feature is not active).<blockquote>Tell me who are the validators and I will tell you if the network is safe</blockquote>This group have enough knowledge and resources to maintain infrastructure and are interested in generating maximum long-term gains from ATOM inflation and transaction fees (about this later). That is why validators care about healthy and sustainable ecosystem development. They should act in interests of their delegators if they want to keep them loyal and increase the voting power in the long term.<h3 id="delegators">Delegators</h3>This group consists of ATOM token holders who have not enough skills or resources to run and maintain the infrastructure but still want to increase the network security and earn a share of the transaction fees and inflationary reward by bonding tokens to the validators. It boosts the voting power of validator and frequency of being chosen as block proposer. In fact, by bonding ATOM to validator delegators choose one of the pillars of the ecosystem so their choice is very important and affects the level of decentralization. Delegators are eligible for transaction fees and inflation reward as well but they have to pay commission, which vary within existing validators. There is no way for validators to steal bonded tokens but there are still other risks related with choosing the validator, which we will discuss later. Decisions based solely on a low commission rate is not always the best decision for delegators.<h3 id="users">Users</h3>If we compare Cosmos network with the market, users are consumers and service providers. Developers, entrepreneurs and buyers who want to utilize the advantages of Cosmos ecosystem. Many different hubs can co-exist. To go further we can compare the network with a nation where there is a national hub with cities and zones each acting as smaller hubs within it and the possibility to join with the secure hub (Cosmos) if needed. Activity of this group measures the overall value of the network and can have a significant impact on demand for the token, transaction fees, workload and so on.<h1 id="cosmos-hub-economy-and-reward-distribution">Cosmos hub economy and reward distribution</h1>Cosmos hub economy relies on the inflationary approach. The target annual inflation rate represents the percentage from total supply that is changing each block. If the total bonded stake is less than <code>66%</code> of the total ATOM supply, the inflation rate will slightly increase until it reaches a maximum of <code>20%</code> or the total bonded stake climbs higher than <code>66%</code>. In this case, the annual inflation will decrease to <code>7%</code> depending on ATOMs participating in bonding. New tokens incentivize participants to secure the network. The more tokens locked via staking the higher the threshold for initiating a successful attack.There are two fundamental streams of revenue for validators:<figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2020/09/2-18.png" class="kg-image" alt loading="lazy" width="705" height="560" srcset="https://p2p.org/economy/content/images/size/w600/2020/09/2-18.png 600w, https://p2p.org/economy/content/images/2020/09/2-18.png 705w"></figure><ul><li>Block reward, which distributing amongst all validators proportionally to their voting power. This reward is paid in ATOMs and depends on the current annual inflation rate, which varies each block with the frequency of average block time. In the future, this reward can be split between ATOMs and Photons that will play the role of a secondary token with the purpose of transaction fee payment only, decreasing the velocity and liquidity of ATOMS and making a 1/3 attack more expensive. Inflation of Photons is expected to be fixed and equivalent to <code>500</code> tokens per hour. Currently Photons are not available but could be activated with specific implementation and distribution method by the community via governance.</li><li>Transaction fees form in each block and proposer gets <code>1%</code> or <code>5%</code> depending on the number of precommits included. The frequency of proposing blocks is proportional to the voting power of a validator. Before fees distribution, <code>2%</code> goes to a reserve pool. These funds can be spent on network development or other activities by voting. Currently transaction fees are close to zero as the network is still in an early stage of adoption. In the future, it will be possible to receive fees in other whitelisted tokens than ATOMs in Cosmos ecosystem. The amount of fees will depend on gas prices and usage of the network.</li><li>Validator’s commission rate represents a percentage from both streams of revenue that delegators pay to a validator. Delegators reward streams are the same as for validators less the commission percentage.</li></ul><h1 id="penalties">Penalties</h1>In some circumstances occurs slashing of bonded ATOMs. Penalties should increase the responsibility level of participants who are directly involved in decisions associated with network security. Validators have no control over delegator’s stake but if such an event happens both parties lose a percentage of their tokens. This is in order to prevent misbehavior and negligence from validators and bring incentives to delegators to diversify amongst them, perform proper due diligence and choose wisely.<ul><li>The first reason a stake can be slashed is double-signing a block. This means that a malicious node is broadcasting two blocks with different content for the same height. The penalty for that is currently set at <code>5%</code> and the validator who is responsible for that drops out of validators set. All ATOMs enter an unbonding (process of undelegating ATOMs from validator) period that lasts for <code>21 days</code> and within this period the stake will not earn provisions and transaction fees.</li><li>If a validator fails to sign more than <code>95%</code> blocks in a row of <code>10000</code> due to inactivity, <code>0.01%</code> of the bonded ATOMs will be lost and the validator will be jailed for <code>10 minutes</code> without allowance to participate in consensus and be eligible for rewards.</li></ul>If slashing happens, it decreases stake and leads to fewer ATOMs paid as a reward.<h3 id="example">Example</h3>Let’s compare three imaginary validators. Assume that delegator bonded equal amount of ATOM to each. Slashing decreases the amount of stake thus meaning a proportional decrease in ATOM provisions since the event has taken place.For example, validator 1 <code>V1</code> was caught on a double sign and slashing occurred on the 60th day. After unbonding, the rest was staked with the same conditions to another one. Validator 2 <code>V2</code> had three liveness slashes on the 30th day with a 2-day recovery period and an inability to fix the issue, on the 60th and 180th days being offline for one day each. Validator 3 <code>V3</code> had no such events in place.<figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2020/09/3-17.png" class="kg-image" alt loading="lazy" width="779" height="265" srcset="https://p2p.org/economy/content/images/size/w600/2020/09/3-17.png 600w, https://p2p.org/economy/content/images/2020/09/3-17.png 779w" sizes="(min-width: 720px) 720px"></figure>Overall results show that validator with a higher commission and honest behavior performed better than validators with stated slashing events. In this example we have not taken compounding into consideration. Every slashing event may decrease the confidence of delegators and may lead to immediate re-delegation to another validator. That will cause fewer commission rewards in ATOM for validator and can lead to inability to maintain secure infrastructure in future.<h1 id="recommendations-for-delegators">Recommendations for delegators</h1>Every delegator is self-responsible for the financial decisions made. To choose the proper validator and understand misbehavior risks it is important to read the full conditions of the delegator agreement and find out the validator’s policy on this topic.<ul><li>Security audit that proves the stated level of security that should decrease the probability of a key compromise that may lead to double-sign.</li><li>Check for an available roadmap of future steps to increase the security or transparency of annual expenses on upgrades and improvements.</li><li>Skin in the game proves that the validator puts their own funds at risk as well. The higher the percentage of their stake the more responsible the validator should be and if slashing does occur he will lose his own ATOMs and .</li><li>Compensation policy. Are there any payouts or bonuses from the validator’s side in case of a slashing event?</li><li>Diversification amongst 3-7 validators who operate in different countries and utilize different hardware. It sounds like a good idea, as it decreases amount of stake in case of slashing, increases overall network security and brings voting power diversification as well.</li></ul>Do not forget to re-delegate your ATOM rewards in order to maximize profits and take advantage of the compounding.<hr>P2P Validator offers high-quality staking facilities and provides up to date information for educational purposes. Stay tuned for updates and new blog posts.Web:<a href="https://p2p.org/?ref=p2p.org"> https://p2p.org</a>Stake ATOMs with us:<a href="https://p2p.org/cosmos?ref=p2p.org"> https://p2p.org/cosmos</a>Twitter:<a href="https://twitter.com/p2pvalidator?ref=p2p.org"> @p2pvalidator</a>Telegram: <a href="https://t.me/p2pvalidator?ref=p2p.org">https://t.me/p2pvalidator</a>

Alex Bondar

from p2p validator

Staking How to delegate Cosmos Atoms using Lunie wallet

Lunie (previous name “Voyager”) is an official audited web wallet and UI for interacting with the Cosmos Hub. The process of sending, staking and redelegating atoms could be done in a simple and secure way. Lunie will not ask for your private keys or seed phrases. To interact with it you need to have Ledger device. Following this two-step guide will not take more than 5-10 minutes.<blockquote>Note: If you participated in the fundraiser, you should be in possession of a 12-word mnemonic. When setting up a Ledger wallet, enter the seed phrase to access your digital assets obtained through an ICO. We advise you to connect a new Ledger device, in case of replacing the seed phrase on the working device, all data will be overwritten.</blockquote><h2 id="step-1-set-up-your-ledger">Step 1. Set up your Ledger</h2>Download <a href="https://shop.ledger.com/pages/ledger-live?ref=p2p.org">Ledger Live</a> to update your Ledger device to the latest version (1.5.5) Press the “Settings” button in the top right corner<figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2020/09/1-2.jpg" class="kg-image" alt loading="lazy" width="1599" height="210" srcset="https://p2p.org/economy/content/images/size/w600/2020/09/1-2.jpg 600w, https://p2p.org/economy/content/images/size/w1000/2020/09/1-2.jpg 1000w, https://p2p.org/economy/content/images/2020/09/1-2.jpg 1599w" sizes="(min-width: 720px) 720px"></figure>Turn on Developer mode<figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2020/09/2-19.png" class="kg-image" alt loading="lazy" width="2000" height="1326" srcset="https://p2p.org/economy/content/images/size/w600/2020/09/2-19.png 600w, https://p2p.org/economy/content/images/size/w1000/2020/09/2-19.png 1000w, https://p2p.org/economy/content/images/size/w1600/2020/09/2-19.png 1600w, https://p2p.org/economy/content/images/size/w2400/2020/09/2-19.png 2400w" sizes="(min-width: 720px) 720px"></figure>Go to the Ledger Live App Store and download the Cosmos application<figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2020/09/3-3.jpg" class="kg-image" alt loading="lazy" width="1598" height="439" srcset="https://p2p.org/economy/content/images/size/w600/2020/09/3-3.jpg 600w, https://p2p.org/economy/content/images/size/w1000/2020/09/3-3.jpg 1000w, https://p2p.org/economy/content/images/2020/09/3-3.jpg 1598w" sizes="(min-width: 720px) 720px"></figure>You will see a dialog window while the installation is processing, it can take a while<figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2020/09/4-3.jpg" class="kg-image" alt loading="lazy" width="1023" height="542" srcset="https://p2p.org/economy/content/images/size/w600/2020/09/4-3.jpg 600w, https://p2p.org/economy/content/images/size/w1000/2020/09/4-3.jpg 1000w, https://p2p.org/economy/content/images/2020/09/4-3.jpg 1023w" sizes="(min-width: 720px) 720px"></figure><figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2020/09/5-1.jpg" class="kg-image" alt loading="lazy" width="1599" height="759" srcset="https://p2p.org/economy/content/images/size/w600/2020/09/5-1.jpg 600w, https://p2p.org/economy/content/images/size/w1000/2020/09/5-1.jpg 1000w, https://p2p.org/economy/content/images/2020/09/5-1.jpg 1599w" sizes="(min-width: 720px) 720px"></figure>At the same time it will install on your Ledger<figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2020/09/6-1.jpg" class="kg-image" alt loading="lazy" width="1024" height="768" srcset="https://p2p.org/economy/content/images/size/w600/2020/09/6-1.jpg 600w, https://p2p.org/economy/content/images/size/w1000/2020/09/6-1.jpg 1000w, https://p2p.org/economy/content/images/2020/09/6-1.jpg 1024w" sizes="(min-width: 720px) 720px"></figure>After successful finish, check that the Cosmos application appears on your Ledger<figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2020/09/7-1.jpg" class="kg-image" alt loading="lazy" width="1024" height="768" srcset="https://p2p.org/economy/content/images/size/w600/2020/09/7-1.jpg 600w, https://p2p.org/economy/content/images/size/w1000/2020/09/7-1.jpg 1000w, https://p2p.org/economy/content/images/2020/09/7-1.jpg 1024w" sizes="(min-width: 720px) 720px"></figure><h2 id="step-2-connect-ledger-with-lunie-on-your-pc">Step 2. Connect Ledger with Lunie on your PC</h2><ul><li>Go to the <a href="https://lunie.io/?ref=p2p.org">Lunie website</a></li><li>Choose “Staking” and find there P2P Validator</li></ul>Press “Sign in” in the top right corner<figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2020/09/8-1.jpg" class="kg-image" alt loading="lazy" width="1599" height="849" srcset="https://p2p.org/economy/content/images/size/w600/2020/09/8-1.jpg 600w, https://p2p.org/economy/content/images/size/w1000/2020/09/8-1.jpg 1000w, https://p2p.org/economy/content/images/2020/09/8-1.jpg 1599w" sizes="(min-width: 720px) 720px"></figure>You will see a dialog window like in the picture - press “Sign in”<figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2020/09/9.jpg" class="kg-image" alt loading="lazy" width="640" height="369" srcset="https://p2p.org/economy/content/images/size/w600/2020/09/9.jpg 600w, https://p2p.org/economy/content/images/2020/09/9.jpg 640w"></figure>Lunie will connect to your Ledger and you will see Tendermint Cosmos appear on it<figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2020/09/10.jpg" class="kg-image" alt loading="lazy" width="640" height="480" srcset="https://p2p.org/economy/content/images/size/w600/2020/09/10.jpg 600w, https://p2p.org/economy/content/images/2020/09/10.jpg 640w"></figure>After that you can press “Delegate”. Your address can be found in the top left corner<figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2020/09/11.jpg" class="kg-image" alt loading="lazy" width="639" height="290" srcset="https://p2p.org/economy/content/images/size/w600/2020/09/11.jpg 600w, https://p2p.org/economy/content/images/2020/09/11.jpg 639w"></figure>Now you will be able to enter the amount of Atoms and finish the process by pressing “Next” and confirm the delegation.<figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2020/09/12.jpg" class="kg-image" alt loading="lazy" width="640" height="294" srcset="https://p2p.org/economy/content/images/size/w600/2020/09/12.jpg 600w, https://p2p.org/economy/content/images/2020/09/12.jpg 640w"></figure><h2 id="congratulations-now-you-can-grow-your-holdings-and-earn-rewards-with-p2p-validator-hooray-">Congratulations! Now you can grow your holdings and earn rewards with P2P Validator, Hooray!</h2>If after following this guide you still have questions, issues or other concerns please follow us on <a href="https://twitter.com/p2pvalidator?ref=p2p.org">Twitter</a>. We will provide a personal consultation and guide you through the following process.Whether you chose to delegate your digital assets to P2P Validator or not, we welcome you to join our social channels, educational hub and use our DApps, all of which will be open-source.Public website: <a href="https://p2p.org/?utm_source=lunie_post&utm_medium=creds_link&utm_campaign=blog">p2p.org</a>Medium: <a href="http://medium.com/p2peconomy?ref=p2p.org">medium.com/p2peconomy</a>Twitter: <a href="http://twitter.com/p2pvalidator?ref=p2p.org">twitter.com/p2pvalidator</a>Telegram: <a href="http://t.me/p2porg?ref=p2p.org">t.me/p2porg</a>

Pavel Pavlov

from p2p validator

Staking Introducing P2P Validator

Hello, world! We are building P2P Validator — the GUI for painless blockchain assets staking across 9+ Proof-Of-Stake networks. We support Tezos XTZ mainnet, Polkadot, Cosmos and IRISnet testnets from the beginning, and ready to take Nucypher, Dfinity and Solana on board.Our mission is to positively influence the development of Proof-Of-Stake technology and improve existing networks by mindful alternate proposals while offering token holders to hedge their staking rewards on the other hand.Whether you chose to delegate your digital assets to P2P Validator or not, we welcome you to join our social channels, educational hub and use our DApps, all of which will be open-source.Public website: <a href="https://p2p.org/?utm_source=1_post&utm_medium=creds_link&utm_campaign=blog">p2p.org</a>Medium: <a href="https://medium.com/p2peconomy?ref=p2p.org">medium.com/p2peconomy</a>Twitter: <a href="https://twitter.com/p2pvalidator?ref=p2p.org">twitter.com/p2pvalidator</a>Telegram: <a href="https://t.me/p2porg?ref=p2p.org">t.me/p2porg</a>By choosing a right delegate, supporting crucial network alternating decisions and first of all — by fully accepting and acting in course with decentralized community values and code of conduct, we will definitely achieve Proof-Of-Stake social and algorithmic consensus.<figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2020/09/1.jpeg" class="kg-image" alt loading="lazy" width="1000" height="666" srcset="https://p2p.org/economy/content/images/size/w600/2020/09/1.jpeg 600w, https://p2p.org/economy/content/images/2020/09/1.jpeg 1000w" sizes="(min-width: 720px) 720px"></figure><h3 id="why-delegate-to-us">Why delegate to us?</h3>Simplicity & Effectiveness. It’s unbelievably easy to stake your assets across different networks with us. Tezos Bakery is already available for XTZ delegation and will be expanded to 9+ networks all within single GUI, as soon as their testnets and then mainnets are launched. As of this writing, we’re moving towards adding an exhaustive cross-network analytics to help you track rewards flow and analyze the value of different stakes.Focus on Governance. PoS implies that the network alternations are voted by its nodes, where the highest stake value determines the power of voice. As a general stakeholder, we offer a smart on-chain governance insight within each ecosystem we are presented, meaning to represent your interests and execute your will whether you don’t have enough time or desire to do so. In other words, we help networks grow in value while increasing the value of your own stake and rewards by stopping unfair and making the right decisions happen.360° Security. All independent third-party auditors are welcome to try and test our infrastructure security.Community impact. We’re keen to become the leading educational hub and informational source for all things Peer-to-Peer and blockchain thus turn our financial experts, developers and analysts to look trendy and share their findings across our blog and social media.<h3 id="network-portfolio">Network portfolio</h3><figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2020/09/2-20.png" class="kg-image" alt loading="lazy" width="1000" height="539" srcset="https://p2p.org/economy/content/images/size/w600/2020/09/2-20.png 600w, https://p2p.org/economy/content/images/2020/09/2-20.png 1000w" sizes="(min-width: 720px) 720px"></figure>Tezos: mainnet / staking opened [<a href="https://p2p.org/?ref=p2p.org">start earning rewards</a>]Cosmos: testnet / staking openedIRISnet: testnet under constructionPolkadot: testnet under constructionDfinity: testnet under constructionAlgorand testnet under constructionSolana: testnet under construction<h3 id="become-a-business-partner">Become a business partner</h3>Running and maintaining an infrastructure are headaches.P2P Validator is built to simplify staking and take all the node weightlifting to unfold new revenue sources for you. We’re open for business offers and proposals from existing investment funds, exchanges, foundations, services and other blockchain-related financial institutions and all first-string asset holders.For example, if you’re an exchange then you probably aware that your customers most likely prefer platforms that provide staking and rewards among other options. While you may also know that running a dedicated node in each network results into tremendous headaches and unplanned costs. P2P Validator completely eliminates infrastructural, salary and token costs while makes you forget about time consuming node maintenance at the same time.<a href="mailto:[email protected]">[Drop offers here]</a><h3 id="risks-as-a-staking-as-a-service-provider">Risks as a Staking-as-a-Service provider</h3>We are aware and take on all possible risks associated with the unfair performance of our duties. In accordance with the rules of networks, such actions will be voting procedures evasion, double transaction signatures and low node uptime.In case, if you’re running your own node, all fines are your responsibility whether you have basic or venture-level infrastructure behind you. Voting also requires deep understanding of blockchain, PoS and network nuances and investments, which are not granted even with the highest stake possible. Token delegation is a solid workaround to decrease risks yet ensure your interests are presented in the exact network.<h3 id="core-business-values">Core business values</h3><figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2020/09/3-18.png" class="kg-image" alt loading="lazy" width="800" height="395" srcset="https://p2p.org/economy/content/images/size/w600/2020/09/3-18.png 600w, https://p2p.org/economy/content/images/2020/09/3-18.png 800w" sizes="(min-width: 720px) 720px"></figure>Security. Protection of your stake and personal data are our top priorities. Each P2P Validator community member is free to stay anonymous to others as well as hide their financial data, if feeling so, but not necessarily should. Each user is free to bring a crime to an arbitrage or raise suspicions and doubts against service itself or other members of the community. Arbitrage is done ad-hoc to ensure objectivity.Transparency. All our actions and decisions are clearly visible and transparent to our community. We are sharing all financial data on returns, cycles, stake amount and delegation capacity as well as the status of all networks and our project updates.Groundbreaking technology. P2P Validator is dedicated to combine different networks under a single interface for an investor’s the peace of mind and to save hours usually wasted on switching between wallets and staking service providers. We’re planning to further simplify staking by adding open-source DApps and other tools for community needs.Benefit. Staking exists to generate new coins and revenue. Although we do have static 10% fee implemented to all rewards you get from staking operations, we are 100% sure staking creates additional benefit for our users on the first place. Using our expertise, we pick only the most successful networks and execute smart governance to ensure growing value and high returns.Smartness. Perfection comes from experience. As the general stakeholder, we provide deliberated business decisions based on deep financial analysis and understanding. We are more than interested in avoiding overdelegation and helping networks thrive, as we are staking our own assets on our node.<h3 id="community-benefit-roadmap">Community Benefit Roadmap</h3><ol><li>Educate, demonstrate and influence. As we define ourselves as the general opinion leader, we see our purpose in creating an international educational hub for all things Proof-of-Stake. The part of our revenue is spent on maintaining the highest possible level of educational materials: webinars, guidelines, insights and news representation. The success of each community member affects the network and thus our success also depends on it, so we make sure that each community need is fulfilled within P2P Validator ecosystem.</li><li>Support open-source DApp development. Creating robust yet efficient applications is the part of our strategy to benefit the Proof-of-Stake community. We believe in open-source development and values, so expect all the DApp source code available on Github right from the start. Modes, upgrades and enhancements are welcome. Also we’re planning on supporting independent developers and projects to further enrich the ecosystem.</li><li>Spend our revenue for the community building. We will use a significant percentage of our income to construct a strong and intelligent community of users behind P2P Validator. In long-term this will help to further promote P2P economy and Proof-of-Stake as its integral part, diluting the existing community of enthusiasts, foundations, and core developers with fresh members.</li></ol><h3 id="tl-dr-project-origins">TL;DR: Project origins</h3>P2P Validator has been established in 2018 after a few successful projects delivered by the same team of chaincode developers and crypto enthusiasts. From testnets to mainnets our mission is to promote values of the blockchain assets and give people access to the new emerging peer-to-peer economy.Contributing to <a href="https://multy.io/?ref=p2p.org">Multy</a>:Multy is a blockchain-based multi-cryptocurrency and digital assets open-source wallet available in the web, on iOS and Android. Imaguru Blockchain Hackathon winners.Contributing to <a href="https://crypto3.nilfoundation.org/?ref=p2p.org">Nil Foundation</a>:This library is a modern cryptography backend designed in generic programming style. Library intention is to become an industry-standard cryptography library developing faster than OpenSSL and including modern schemes and protocols.<a href="https://p2p.org/?utm_source=1_post_link_end&utm_medium=medium&utm_campaign=blog">Start staking and earning rewards</a>

Konstantin Lomashuk

from p2p validator

Staking Game Of Stakes: The battle has begun!

Howdy, COSMOnauts,Game of Stakes has come online and P2P Validator is happy to be among ones to take part in the clash!We are pleased to announce a live explorer to help you enjoy this game at its best.⚔ <a href="https://cosmos.p2p.org/?utm_source=1post_medium&utm_medium=blog&utm_campaign=GoS">Use Game Of Stakes explorer to track highscores</a> ⚔️For those who haven’t been following the buzz, Game of Stakes or GoS is a unique participatory research program with real-life incentives for attackers. New adversarial environment Genki-3001 is designed to maximize the effectiveness of cartel formation and <a href="https://medium.com/tendermint/the-game-of-stakes-its-time-for-some-game-theory-278608c94e6e?ref=p2p.org">vote withholding attacks</a>, will demonstrate how collusion and deceptive actions interact with the incentive layer of a BFT Proof of Stake protocol.Participants are to acquire rewards through censoring others, highlighting misconfigured node setups, and sending deceptive traffic to other nodes (DDOS), and vice versa the stake is decreased for being a victim to such actions.Stay on our lookout for further updates and share your feedback on the explorer:→ <a href="https://twitter.com/p2pvalidator?ref=p2p.org">Twitter</a>→ <a href="https://t.me/p2porg?ref=p2p.org">Telegram</a>Let the most resilient win!

Konstantin Lomashuk

from p2p validator

Cosmos, Economy 5 reasons to stake your atoms

On the date of publishing <code>~69%</code> of current total atom supply is locked in staking meaning that for the rest, their holdings are considered more as speculative rather than potentially revenue generating assets. Most of Proof-of-stake (PoS) networks sometimes offer attractive yield nominated in native tokens. An effective and reasonable relation between risk and reward assists in achieving the implied level of network security and create economic incentive for delegators to lock their holdings if they believe in the value proposition of the token in the long term. Staking yield provides a reliable revenue stream for validators operating the network.If short term expectations about token price are bearish and speculators see a possibility to repurchase more tokens in future and this amount exceeds the expected return on staking (RoS) nominated in USD for a particular period of time then the reason to lock-up holdings in staking can be less attractive than just to hold and be ready to sell when emotions are high. It can be true for even long-term believers who consider such speculation as an opportunity to increase the overall network share as well.<h1 id="1-not-staking-missing-opportunity">1. Not staking = missing opportunity</h1>Not staking today may be considered as a missed opportunity to earn rewards tomorrow. The higher the belief in the long-term value growth the less speculation happens in the short term and more people agree to get higher benefits in the future. Atoms are not speculative assets and can be defined as units subject to inflation, generating revenue from transaction fees thus providing an incentive to actively participate in staking, securing the cosmos hub. Validators of cosmos hub will earn fees by validating on other chains in cosmos ecosystem and sharing security with them. Until Inter Blockchain Communication (IBC) and shared security features are not active, transaction fees are close to zero, short term ATOM value may fluctuate.However, from pure speculators tokens will go over to the long-term participants and their attempts to sell high and buy low may fail. Volatility expectations may become less interesting than staking or even erroneous, which will lead to a missed opportunity to jump into the leaving train. Unbounding also makes funds illiquid for three weeks and decreases the speculative attractiveness of ATOM.Some short-term traders prefer to store their tokens on exchanges. Even if exchange offer staking opportunities it is not secure because the person has no control over the holdings. Sometimes exchanges suffer from hacking attacks. The recent accident with Binance confirms that that exchanges are not the best option to store funds.If you believe in the ability of ATOM to gradually increase earnings in the long run, then buying low, adding on deeps and immediate staking with reinvesting rewards in order to increase overall share in the network can be a more reliable strategy, which can provide higher gains from transaction fees in future.<h1 id="2-inflation">2. Inflation</h1>To get rid of confusion, annual inflation is not the same as annual RoS. Inflation is a mechanism, minting rewards that go to stakers as a percentage of total ATOM supply. As a result, it dilutes a share of the network of speculators and passive holders.Annual ATOM provisions and annual RoS depend on initial parameters determined in genesis. lnflation percentage was set at <code>7%</code> from total supply. This number is slowly increasing and can go up a maximum <code>13%</code> and reach <code>20%</code> to incentivize staking until <code>67%</code> of ATOM supply will be bonded.If staking ratio is <code><67%</code> then annual inflation change in the moment can be defined with a following calculation: <code>7% + 13% * (67% - staking ratio)</code>. If staking ratio exceeds <code>67%</code> then inflation will gradually decrease.Validator ATOM provisions occur every first block of a new hour. These provisions are based on the estimated number of blocks in a year. When cosmos network first launched mainnet this number was calculated with the assumption, that average block time will be <code>5 sec</code>.By dividing the quantity of seconds in a year by average block time, we get the estimated number of blocks in a year. Calculated yearly ATOM provisions are evenly distributed to the blocks. After launch, it became clear that actual average block time is higher and stakers will get fewer amount of ATOMs than it planned. That is why the first proposal was about adjusting the number of blocks in a year with <code>6,75 sec</code> which is much closer to the actual block time.After we have figured out ATOM provisions per block we can find overall annual RoS. These rewards go only to participants who are involved in staking. If all ATOMs are locked in staking then everyone gets an equivalent amount of tokens and there will be no additional benefit relative to each other. In this case, annual inflation will be the same as annual RoS and no one will be diluted or rewarded.Otherwise, we need to include staking ratio in our calculation. <code>Annual RoS = annual inflation / staking ratio</code>, where <code>staking ratio = staked ATOMs / total ATOMs</code>. In fact, additional rewards that go to delegators from inflation are ATOMs intended for those who do not stake. In that way, net earnings are the difference between annual RoS and annual inflation rate. Passive holders are penalized by inflation and their share of the network is diluted and redistributed amongst delegators.<h3 id="example">Example</h3>Let's make it clear and simple to sum up the information written above. Imagine that we have total ATOM supply equal of <code>100</code>, annual inflation is <code>7%</code> (assume it is not changing), staking ratio is <code>20%</code>. Four participants have <code>20</code> <code>20</code> <code>20</code> <code>40</code>. Annual ATOM provisions from inflation equal <code>7</code> and total supply at the end of the first year will be <code>107</code> ATOMs.Only one participant with holdings of <code>20</code>ATOMs bonded. For these conditions, we observe the following parameters.<figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2020/09/1-12.png" class="kg-image" alt loading="lazy" width="698" height="179" srcset="https://p2p.org/economy/content/images/size/w600/2020/09/1-12.png 600w, https://p2p.org/economy/content/images/2020/09/1-12.png 698w"></figure>The first participant <code>P1</code> increased his network share by <code>5%</code> but also he decreased the distance from <code>P4</code> by <code>8%</code>. If we change staking ratio from <code>20%</code> to <code>60%</code> we will see the following results.<figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2020/09/2-15.png" class="kg-image" alt loading="lazy" width="698" height="180" srcset="https://p2p.org/economy/content/images/size/w600/2020/09/2-15.png 600w, https://p2p.org/economy/content/images/2020/09/2-15.png 698w"></figure>You can notice that gains in network share of staking participants are equal to the loss of passive holders.<h1 id="voting-power-and-network-decentralization">Voting power and network decentralization</h1>Cosmos network is a community driven project where all important solutions are accepting or declining via on-chain governance process. These decisions can have an enormous impact on token holders and other players. Participation is mandatory for validators but not for token holders. By staking, delegators transfer the voting rights to a validator. The higher the voting power the higher the influence on the results of the governance process. If a delegator does not agree with the decision of a validator he delegated to, then he is still able to cast his own vote subtracting voting power in this particular proposal from the validator.If a delegator has no intention to participate in governance then his stake will increase the voting influence of validators he bonded. If such power is distributed unfairly and a small number of validators control too much, it can lead to centralization of the voting process. Situations like <a href="https://www.evanvanness.com/post/184616403861/aragon-vote-shows-the-perils-of-onchain-governance?ref=p2p.org">Aragon experienced</a> undermine believef in the healthy decentralization and fairness of on-chain governance.Currently there are <code>100 validators</code> in the cosmos hub participating in consensus and the top 6 of them control <code>~36%</code> meaning they can possibly collude and cast a veto, declining any healthy proposal. To avoid that cosmos hub delegators are able to transfer their voting rights in order to support the sustainability of the network increasing voting power distribution amongst validators.Delegating to various validators is much better for the network than not delegating. In addition, it helps to decrease <a href="https://p2p.org/economy/slashing-overview-in-cosmos-network">slashing risk</a> for the stakers. The cosmos network is still in the early stages and new active participants may come as the project evolves so power distribution can change drastically in the future.<h1 id="4-compounding">4. Compounding</h1>Compound interest may serve as an effective tool for increasing the share of the network in the long-term. Walter Schloss, a famous notable disciple of the Benjamin Graham school of investing said:<blockquote>Remember the power of compounding. You don’t need to stretch for returns to grow your capital over the course of your life. Even small gains matter. By re-delegating your rewards you increase the overall return from year to year. The longer the period, the bigger the difference.</blockquote><figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2020/09/3-14.png" class="kg-image" alt loading="lazy" width="1180" height="620" srcset="https://p2p.org/economy/content/images/size/w600/2020/09/3-14.png 600w, https://p2p.org/economy/content/images/size/w1000/2020/09/3-14.png 1000w, https://p2p.org/economy/content/images/2020/09/3-14.png 1180w" sizes="(min-width: 720px) 720px"></figure>RoS depends also on the frequency of re-delegating. The most common re-investment frequencies are <code>year</code>, <code>quarter</code>, <code>month</code> and <code>day</code>. We know, that in theory, <a href="https://www.investopedia.com/terms/c/continuouscompounding.asp?ref=p2p.org">continuous compounding</a> can offer the highest return and the higher the frequency the higher the percentage in the end.<figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2020/09/4-9.png" class="kg-image" alt loading="lazy" width="1180" height="590" srcset="https://p2p.org/economy/content/images/size/w600/2020/09/4-9.png 600w, https://p2p.org/economy/content/images/size/w1000/2020/09/4-9.png 1000w, https://p2p.org/economy/content/images/2020/09/4-9.png 1180w" sizes="(min-width: 720px) 720px"></figure>However, in some cases in crypto networks it could be incorrect. To re-delegate ATOM rewards you need first to withdraw them manually. To conduct this operation you need to pay a transaction fee. After withdrawal another fee occurs when you stake your rewards. So if you are not a big fish and don't have a big stake then withdrawing too frequently can lead to a situation where small fractions of pending rewards may be less than the transaction fees or the difference may be too small and not make sense.<figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2020/09/5-9.png" class="kg-image" alt loading="lazy" width="1180" height="590" srcset="https://p2p.org/economy/content/images/size/w600/2020/09/5-9.png 600w, https://p2p.org/economy/content/images/size/w1000/2020/09/5-9.png 1000w, https://p2p.org/economy/content/images/2020/09/5-9.png 1180w" sizes="(min-width: 720px) 720px"></figure>Monthly compounding looks like the most optimal frequency to re-delegate ATOM rewards. However if the stake is higher than <code>3000 atoms</code> re-investing on a daily or weekly basis becomes more reasonable with stated RoS of <code>~12,2%</code>.<blockquote>"Compounding matters and does so far more than people expect. The human brain thinks in a linear way which means that if we were asked to estimate what <code>10.22%</code> (close to current annual yield of cosmos network) compounded over <code>100 years</code> would be then our answer is likely to be closer to <code>1,022%</code> than <code>1,679,600%</code>, something economists call exponential growth bias. This means that compounding is often underestimated and should be at the heart of long-term investing" Marathon Asset Management</blockquote><h1 id="increase-of-stability-and-network-security">Increase of stability and network security</h1>As pointed in the <a href="https://p2p.org/economy/introduction-to-cosmos-economy">previous article</a>, cosmos ecosystem utilizes tendermint consensus. It achieves absolute finality and any block that receives <code>>2/3</code> pre-votes and pre-commits are considered as valid. If <code>>1/3</code> malicious validators collude they can cause a fork. Off-chain coordination will allow honest validators to make a reorganization proposal as it would not be possible to perform on-chain as the malicious group will be able to veto every proposal.The resiliency and overall network protection depend on the staked tokens. In theory, bad actors should accumulate enough voting power and the cost of such an attack is higher when more ATOMs are bonded. Currently to accumulate <code>>1/3</code> of voting power and execute a successful censorship attack, bad actors need <code>~56 000 000 atoms</code>. That is equivalent to <code>~300 000 000 USD</code>.<h3 id="to-sum-up-everything-written-above-we-can-conclude-that-">To sum up everything written above we can conclude that:</h3><ul><li>Staking saves you from inflationary dilution of the network share</li><li>Staking early increases your ability to earn higher rewards in future</li><li>Smart staking helps the network to achieve higher decentralization of voting power</li><li>Compound interest on staking rewards work for you and increase your network share</li><li>By delegating, you increase the network security and support reliable project evolution in the long-term.</li></ul>Special thanks to <a href="https://twitter.com/Asmodat?ref=p2p.org">@asmodat</a> for bringing clarity to the inflation part of this article<hr>P2P Validator offers high-quality staking facilities and provides up to date information for educational purposes. Stay tuned for updates and new blog posts.<hr>Web:<a href="https://p2p.org/?ref=p2p.org"> https://p2p.org</a>Stake ATOMs with us:<a href="https://p2p.org/cosmos?ref=p2p.org"> https://p2p.org/cosmos</a>Twitter:<a href="https://twitter.com/p2pvalidator?ref=p2p.org"> @p2pvalidator</a>Telegram:<a href="https://t.me/p2pvalidator?ref=p2p.org"> https://t.me/p2pvalidator</a>

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