Moonbeam, one of the most anticipated Polkadot parachains, will distribute crowdloan rewards and enable staking and transfers on Jan 11th, 2022.
Staking APY is very high in the first days/weeks of a network’s launch. This is because, in proof-of-stake networks, the less the % of total staked funds, the higher the rewards are for staking. Current Moonbeam APY is over 500%.
This means that, if you don’t plan on selling your GLMR tokens right away, you will be missing out on a big chunk of rewards if you don’t stake them.
Before you stake, you should be away from a few Glimmer staking tips.
It only takes 7 days to unstake your tokens, so you are not locked in for a long period, in case you decide you want to liquidate.
You need not be afraid of slashing, as Moonbeam does not impose slashing on collators and delegators. However, you do need to be aware of a few gotchas to make sure you 1) maximize your rewards, and 2) you are eligible for rewards.
Contrary to Polkadot or Kusama, Moonbeam collators offer different APYs to their delegators. This might be counter-intuitive, especially since all Moonbeam collator charge the same “fee”, whereas Polkadot validators are free to set their own fee.
Your GLMR staking rewards will depend on two things: 1) the total backing of the collator you chose, and 2) how many blocks the collator authors per round.
Why would some collators author more blocks? Over time, all collators are given the same number of opportunities to author blocks. However, sometimes a collator fails to author the block in time due. This could be due to hardware, network, or just bad luck. Some collators tend to perform better than others.
The total backing of the collator you choose will also affect your rewards. The higher the total backing, the fewer rewards you will receive. This is on purpose so that delegations are spread among collators.
Although it’s certainly useful to be aware of the two factors above, you might find out that collator APYs are very fluid in the first few days. As more token owners come to stake their tokens, the total backing of each collator will change, affecting the collator APY. Therefore, trying to select the collator with the highest (future) APY is probably a futile task, at least during the first days/weeks of the network.
We recommend selecting a collator that is active on Moonbeam’s discord collators channel, had identity information, and a clear explanation of their backup and failover processes. Our collator is the Diversified Validator Network (DVN). We have a 100% uptime record in Moonriver, run multiple backup nodes, and write/operate our own AWS-based services for monitoring and failover.