This guide is intended to demystify trust-based staking and provide clarification on Nexus’ specific centralization safeguards. The significance of this consensus power shift to staking cannot be overemphasized, especially considering the vulnerable state of governance with emerging decentralized ecosystems.
Nexus trust based Proof of Stake (PoS) is a greener form of mining supplying similar consensus properties that Proof of Work (PoW) channels provide with minimal management overhead. The probability of finding a block is largely determined by the amount of coins staked. It is hardware agnostic, instead basing its hashing algorithm off balance and weight. This means there is no set amount of time to earn a reward. It happens when you stake a block, with the chances of doing that increased by staked amount/Stake weight and decreased by current network PoS channel difficulty.
Ultimately, the only thing that matters is that the wallet (node) finds a block once every 72 hours to keep growing stake rate. The reward itself is based on time, so frequency isn't important. If it takes 2 days then the reward is twice as much as if it takes one day. Once you stake a block then that node is locked for 240 blocks (120 min).
In PoW, if network hash rate increases, so does difficulty; similarly for PoS, more total coins staked on network = more difficulty. You can increase PoW hash rate by adding hardware, however hardware makes no difference for PoS. Effective PoS hash rate is increased by stake weight (block and trust weights) and staked amount.
True stake rewards, however, are not like earning interest. Staking rewards are given for running a node to secure blocks via consensus, similar to PoW rewards although generated differently.
Nexus has a total of 78 million native coins and these will be mined fully in 2024 with a tail end emissions / inflation of 3.67%. 3% will be for the PoS if all the nexus tokens are staked and 0.67% for the hash and prime mining channels.
Nexus provides desktop wallets for windows, mac and Linux. The mobile wallet (lite node only) is currently in public beta and will be released in Q1 of 2021. As of today, Nexus only supports full-node staking, although the next major upgrade will also include pooled staking using a lite node with a minimum balance of 1 NXS.
Nexus staked holdings will also be valuable for voting in the upcoming DAO, where trust will be an crucial factor. Voting will supply weight/age values to trust and amount of staked NXS, providing considerable resistance against manipulation and bad actor influences.. Note: In the previous election conducted for Nexus embassy allocation, the amount of nxs for each vote was capped at 10K nxs + trust weight. This is currently not hard coded, but will be implemented in the upcoming DAO release. The threshold variables can be changed as per the requirement and also can be voted on by the community.
Nexus wallet includes modular functionality consisting of the interface, module framework and core. The intuitive interface provides users and businesses an easy and seamless experience. A node can also be run as a daemon exclusively with management available via API or remote interface. This is advantageous when running a staking node on a headless system like a Raspberry Pi or NUC.
The daemon is tested and works flawlessly on a Raspberry Pi 3B+ with 1GB Ram, but the minimum recommendations are as follows to account for growth:
ARM: The Raspberry Pi 4B with 2GB RAM or equivalent SBC with 2GB with a min of 64GB SD card (Daemon /CLI on Linux only).
x64: Any processor with 4GB RAM. Make sure that you have at least 30GB free hard disk space before you install the wallet.
Note: The full node will download the complete copy of the blockchain database and as of today the extracted database is about 12.5GB in size and grows over time. Lite nodes will only maintain block headers and signature chain data minimizing the storage impact dramatically, 250MB approximately.
The PoS fundamental principle is securing the network, and for that it provides an incentive. Node operators incur expenses with the hardware, management, bandwidth and electricity. The instructions in this section provide an optimal configuration for strict budgets and the IoT industry.
Average Users (GUI Wallet): Any computer which meets the minimum requirements, If staking is the only service planned an Intel NUC core i3 / Ryzen 3 or equivalent with 4GB RAM and 120GB SSD is recommended. If the staking computer will be used for other purposes, increase memory and disk space appropriately.
Advanced Users (CLI Wallet): RPI 4 with 2/4GB, NUC or equivalent will run the headless core and control it via an interface from an alternate computer. (RPI can run only the CLI daemon so command line interaction is necessary. Nexus has great step-by-step guides to aid those who are unfamiliar.)
Nexus wallet daemon staking on a RPi 4 takes just 243 MB of RAM and is extremely resource conservative overall.
All major Operating Systems (OS) are supported , but the community recommended OS is Ubuntu LTS or derivatives. Any Linux distribution can be used however the guides have been tailored for Ubuntu.
Stake Rate: This is the annual incentive percentage of your total stake. It begins at 0.5% p.a. and increases non-linearly to a max of 3% p.a. in a year (1% in a month, 2% in 6 months, and 3% in a year).
Block Weight: This starts with the genesis transaction at 0%, then begins climbing slowly to 100% within 72 hours, once a new block is staked the block weight resets to zero and then the cycle starts again.
Trust Weight: Trust is representative of cumulative time spent staking, though it can decay if your node doesn't mine a block within 72 hours of the previous one. It starts at 1.1% and increases to 100% when staking continuously for a year. Trust extends beyond 100%.
Stake Weight: Stake weight is a product of block and trust weights, and the higher this weight, the higher chance of staking a block.
Approximately 20-25K NXS (For full node only at the time of writing).
The minimum threshold varies every few minutes as staking difficulty changes. The only way to know for sure is to start staking. If no blocks are found within a reasonable time, add more NXS to trust balance and adjust the staking amount. This is the equivalent of adding more Graphics Processing Units (GPUs) to a PoW mining rig. The minimum amount is an estimation, a ballpark approximation depending on community participation and ecosystem adoption. Additional clarification is provided below:
The Nexus wallet is enabled for staking by default. No setting adjustments are required initially.
Go to the “Settings” module on the bottom, click on the “Core” tab and locate the toggle button to enable/disable staking. (Follow highlighted icons & text in image below).
Staking can be stopped or started from the “User” module at the bottom bar. Click the “Staking” tab on the left, then find the “Stop Staking” button on the right. Once selected the core will restart and activate the “Start Staking” button.
Send the staking coins to the trust account. (All unstaked NXS should remain in the default account).
NXS coins need to age 72 hrs in the trust account for staking to start. If any additional coins are sent between the 72 hour aging window, the timer will reset to the beginning.
After 72 hours the wallet attempts to find a block and depending upon the number of NXS in the account, a genesis transaction is initiated, which locks the stake amount in a trust account. Genesis is the start of your staking journey.
To increase the incentive from 0.5% to 3% (stake rate) the wallet must stake a block (mine a block) within 72 hours of the previous stake block. (Block weight = 100%).
Staking must occur continuously in order to increase the stake rate to 3%; This is attained after persistent staking for a year, and thereafter to maintain it.
The incentive earned is accrued in the trust account under “Available Balance” and will not be added to the stake. Accrued incentives can be withdrawn without penalties.
As the node is left unattended most of the time, please remain vigilant and verify activity at least every few days, this can be accomplished with a block explorer as well. Remember, if the node stops staking for whatever reasons the trust and stake rate will decay at a 3:1 ratio.
Send the additional NXS to the trust account.
Go to the “User” module at the bottom, click on “Staking” tab on the left. On the right it shows the staking details. Find the NXS under “Available Balance”, click “Adjust stake Amount” and select the total NXS to be staked. For example, you have 20K NXS already staked and would like to add 5K then, the adjusted amount should be 25K. Click ‘Set staking amount “ to save the changes.
The changes will be reflected in the stake details and on the next stake block the NXS will be transferred to the trust account.
Note: ‘Stop Staking’ is not the same as unstake. Staked coins are locked in a trust account and will not be available until properly unstaked.