TXA Staking Details
The TXA network is a rapidly growing hybrid decentralized trading option that offers the convenience of a CEX framework alongside the security of a DEX framework. Put differently, the TXA hDEX framework offers the best of both worlds.
The magic of the hDEX is made possible by people who stake TXA for yield. While numerous people enjoy staking TXA, there are more who have questions about how staking works, what the upside is, and how all of this fits together.
This week, we asked our developers to shed some light on the specifics of staking on the TXA network. Here’s what they said:
How can TXA holders stake their tokens?
Token holders can stake their TXA into a smart contract and delegate that TXA to a validator. If the validator wins the right to report for a settlement, it can choose to use that delegated TXA to satisfy the collateral requirement. If it chooses to use the delegated collateral, then that staker earns a proportionate share of all trading fees in that settlement.
How are fees reported to each blockchain?
After a settlement is reported on the base chain, it is subject to an initial fraud period and a secondary fraud period. Once the initial fraud period passes, the smart contracts on the base chain can be called to relay a message to each other chain containing the merkle root of the settlement data along with the details of which addresses supplied how much collateral. Once the secondary fraud period passes, the smart contracts on the base chain can be called to relay a message to each other chain indicating that the fees for the settlement can now be claimed.
How can stakers claim earned fees?
On each chain where assets were affected by trades, anyone can then send a transaction with proof that a set of trades were reported in a settlement in order to transfer the associated fee to a distribution contract. Then, a staker can send a transaction to the distribution contract in order to claim their share of the fees.
When are fees assessed?
Fees are assessed each time a trade is executed on the exchange. A percentage of one or both assets in a trade are set aside as fees. It is the responsibility of the validators to ensure that the fee amounts in each trade were correctly set by the exchange. The rules regarding how fees are calculated are pre-defined in the smart contracts, along with what percent of each fee goes to the exchange, validator, insurance fund, etc. Invalid fees can be reported by validators as a fraud proof.
What happens to staked collateral when a validator reports?
When a validator reports for a settlement, any collateral becomes "staged," meaning it cannot be used for another settlement. If the settlement is reported as fraudulent, then a portion of the collateral can be slashed. Any remaining collateral is returned. Once the settlement passes the second fraud period, it becomes unlocked, meaning it can then be withdrawn or used in another settlement.
What are the risks of delegating stake to a validator?
1. A validator may not ever select a delegated staker when reporting for a settlement. For example, a validator may supply all the required collateral themselves, or there may already be sufficient collateral delegated by other stakers such that the validator does not use all the collateral that was delegated.
2. There is no guarantee that a validator actually reports any settlements. Likewise, a validator that has consistently reported settlements may stop at any point.
3. If a validator reports data that is then proved to be fraudulent, the delegated stake can be slashed.
As you can see, our developers are creating one of the most user-centric staking experiences in crypto, designed to protect assets while maximizing upside wherever possible. To get started with staking, check out the helpful guide here.
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