The xDai Chain is transitioning to POSDAO, a Proof of Stake consensus protocol. POSDAO will introduce a staking token called STAKE. Individuals who own STAKE may become validators or may delegate their stake to validator candidates to secure the xDai chain. Validators and delegators (stakers) will receive rewards in exchange for providing STAKE.
The transition to POSDAO will proceed in phases. Phase 1 of this transition was completed on April 1, 2020. Below are details related to the transition & what to expect in each phase.
POSDAO transition for current xDai validators only
POSDAO open to public participation.
Anticipated: Q3 2020
New consensus integration - details TBD
Phase 1 was successfully activated April 1, 2020.
POSDAO will launch on the xDai chain with the current xDai validators. Public validators and delegators will be incorporated in phase 2.
Current validators each receive 20,000 STAKE at the start of the protocol. To participate, the entire amount must be staked.
Initial validators will receive 15% APR in STAKE rewards (eg 20k STAKE in protocol =~ 250 STAKE / Mo) . This rate is subject to adjustment in phase 2.
STAKE will be compartmentalized within the xDai chain. It cannot be moved to the Ethereum mainnet until phase 2.
POSDAO finalization & testing
March 1 - 30
Dai -> Chai conversion mechanism
POSDAO v1 migration & validator staking
In preparation for POSDAO migration, we will complete all required changes to the Open Ethereum client and xDai bridge, and complete all necessary testing. We will provide current validators with detailed upgrade instructions and 20,000 STAKE tokens (the minimum required amount to become a validator). In order to participate, validators must upgrade their nodes by March 31.
POSDAO v1 is scheduled to go live with current validators on April 1. Public staking will not be activated in phase 1.
POSDAO includes a multi-reward structure for stakers. In addition to STAKE rewards, stakers receive additional xDai rewards. To create these rewards, Dai locked in the bridge contract is converted to Chai, an interest earning form of Dai. The interest accumulated from the locked Chai during a staking epoch is divided amongst stakers at the end of each epoch. In phase 1, we will enable Chai conversion on the xDai bridge. However, xDai reward dividends will be not be incorporated until phase 2. More info on Chai is available here.
After the STAKE public listing is complete and POSDAO is running as expected with the current validator set, staking on xDai will open up to all public STAKE holders. Dates for the following upgrades are subject to the STAKE listing date and are currently TBD. In the interim, token holders can participate as mock delegators in the pre-staking initiative offered by BitMax.
Validator Candidate: 20,000 STAKE Minimum
Delegator: 1,000 STAKE Minimum
STAKE reward % will vary based on role (validator or delegator) and amount of total STAKE locked in the protocol. The APR may be adjusted from phase 1 (15%). For more details, see the reward distribution section of the POSDAO whitepaper.
The STAKE bridge will open bi-directionally, allowing STAKE to flow freely from the Ethereum mainnet to the xDai chain and back.
Open bi-directional STAKE bridge
Enable staking for new validator candidates
Enable public delegation
Enable bridge exit reward (additional STAKE reward)
Enable xDai Chai-based reward
Public participation will open in phase 2. Individuals who acquire STAKE on the Ethereum mainnet (through a private/public sale or some other means) may bridge that STAKE to the xDai chain. Here, it can be used in the protocol to secure the chain and earn staking rewards. STAKE actions on xDai will be intuitive and easy to perform through the staking UI.
Individuals with enough STAKE (20k minimum) and the ability to run a node may register as validator candidates. STAKE can also be delegated on validator candidates, forming a pool. Candidate pools with the most STAKE will have the greatest chance of selection to the next validator set (if there are more than 19 validator pools. If 19 or less all candidates become validators).
Validator sets will update after each staking epoch, initially set at 1 week intervals.
With public participation, additional rewards will be added to the protocol.
A fee will be charged when xDai is converted to Dai through the xDai bridge (moved from the xDai chain to the Ethereum mainnet). This fee (% TBD) will be distributed to validator pools active when the conversion occurs.
Interest earned from Chai locked in the bridge will be distributed as xDai to active validator pools. Additional Dai may be added to the bridge and converted to Chai to increase the interest reward at the team's discretion.
No timeline is set yet for HBBFT integration, we will provide further details once phase 2 is complete. More information on HBBFT is available here.