The Ultimate Guide to Staking ARK

How to stake and what is voting?

Welcome to the Ultimate Guide to Staking ARK. This post will cover staking the ARK cryptocurrency, reward structures and percentages, ARK’s custom DPoS(Delegated Proof of Stake) protocol and more. After reading this you will understand everything about staking ARK, from how to do it to how it works. Hopefully understanding the engine behind the coin a little better along the way.

Quick Note: This guide was put together under the assumption the reader has basic knowledge of cryptocurrency staking, but do not get discouraged if you are new to it as this article is easy to follow. Staking can be considered a form of earning interest on your coins in exchange for allocating them for a purpose, this purpose can be governance or security related. With some proof of stake protocols it requires a certain amount of coins to be staked in order to participate in consensus, sometimes referred to as a masternode. Some protocols require those coins to be locked or sent somewhere, but not ARK, your coins are always in your possession and never locked. You are free to add or subtract to your ARK address anytime. For more information on staking basics, check out some articles here, here and here.

First things first, is there staking on ARK?

Yes and no. Well not in the form you might be thinking anyway. It exists but only thanks to delegates in the form of a voting structure. There is no staking or mining built into ARK at the protocol level. The network doesn’t reward staking, it only rewards block validation. Now hold on, I know this may sound counterintuitive but let me explain.

Staking is an option provided by some delegates that run the network. The delegates are the ones making this a possibility, not the blockchain or protocol itself. This is something inherent in a decentralized governance protocol like ARK’s DPoS model and this article will help you understand how that works so we can get you staking your ARK as soon as possible.

So how can you stake ARK when the network doesn’t allow it?

This is entirely up to the delegates running the network. A delegate can offer many things including staking. Thankfully, there are many delegates that offer staking. What’s a delegate? Let’s break this down as simple as we can.

A delegate runs a full node on the network. Unlike other networks a full node is known as a forging node on ARK. If it’s not actively validating blocks it is then called a relay node.

Relay nodes are active on the network but do not validate any network blocks, they simply store the blockchain, process information and act as a network backup and access point. These are typical with exchanges or dapps that need all the functionality of a full node without the capabilities of validating and processing transactions and blocks.

A delegate that is running an active forging node is commonly known in the industry as a validator.

Sounds a little complicated but stick with me here. Think of it this way, a validator is a group which consists of a Delegate, which can be a single person, an entity or a group, that is actively running a full forging node on the network.

A delegate is separated because it is a real person, entity or group that is actively running the forging node and everything surrounding it. This delegate can be private or public and each delegate is different.

The ARK network is decentralized and run by delegates. Their responsibilities include setting up and properly securing full nodes, properly setting up and running backup nodes, staying up to date with all codebase upgrades and updates, and validating blocks and transactions on the network.

For each successfully validated block, a validator receives newly created ARK at the protocol level as incentive to continue and reward for doing their job. It’s very similar to rewards for miners in bitcoin.

There are a set number of validators/delegates that can run the network. This fixed number is currently 51 but can be adjusted with the delegates consensus to accept a network core update and fork. There have been talks about changing the number to 53 or more for years and this is a continued discussion and something to look forward to in the near future.

Currently, only the top 51 validators run the network, anyone not in the top 51 is actively campaigning to get into a forging position.

Ok, that was a lot to quickly digest but you are one large step into understanding ARK and DPoS itself.

How do delegates offer staking?

Each delegate has their own proposal and can offer more than just securing and running the network. Some delegates offer staking, marketing activities, development or more.

Most delegates that offer incentives are campaigning for a vote to become or stay an active forging validator.

That’s right, campaigning. As I stated earlier, only the top 51 can run the network. To become a top 51 validator, you must have enough votes to get in.

This is where the ARK coin acts like a governance token. By voting, you control who runs the network. The weight of votes is directly proportional to the amount of ARK coins voting. Each ARK coin is equal to 1 vote. So if you have 100 ARK, then you have 100 votes to give.

Each ARK address is allotted one vote. You can only vote for one delegate per address. If you want to vote for more than one delegate, you must have more than one address. All ARK in the address voting will be dedicated to the delegate it is voting for.

You can change and swap your votes anytime for a simple network transaction fee. You can also add or subtract the amount of ARK coins in the voting address at anytime, it will automatically adjust your voting weight for you. There is no locking of coins and you are free to add or subtract at anytime.

Be diligent in who you vote for

Are you still with me here? This was a simple breakdown of how ARK’s DPoS governance works and why voting matters. The staking is just a bonus in most cases and we must be careful who we vote for. No matter how good a delegate’s staking percentage may look, we must be cautious and investigate said delegate to weed out potential bad actors.

Some voting factors to watch for include:

• Are they active, visible and easy to find or contact?

• Do they have experience running infrastructure?

• Are they reliable and secure?

• Do they have a proper node setup and meet minimum network requirements?

• Do they over promise and under deliver?

• Do they under promise and over deliver?

• Are they reputable in the community?

• Do they have a great network uptime or are they constantly missing blocks?

Each delegate also has a proposal write up and is usually active in the community in some form, whether on reddit/twitter/discord or other platforms.

It is possible for a validator to be private and self voted into the top 51 and some would call these whales. But there are also smaller groups that pool together to run a validator and these are also private delegates. It is important to recognize that these private delegates usually do not share any percentage of their forging rewards outside of their group.

There are also public delegates that choose to provide a service in lieu of a sharing percentage. Instead providing a service or product on top of running the network in exchange for a vote.

There are many factors to account for when researching who to vote for so be sure to do some research.

Here are a few helpful links to bookmark:

• ARK Delegate Proposals - Here we can see a curated list of delegates and their written proposals. There is also a convenient newsfeed for delegate updates or news of active delegates that are participating and contributing outside of purely validating blocks. You can also click delegates up top to see a full list of all registered delegates on the network. Note that some will not have proposals linked and they may just be private. (This site is created and maintained by delegate itsanametoo.)

• ARK Rewards Calculator - This is a straight forward calculator. Just type in the amount of ARK you want to stake or your address and it will show you the current payouts. This site pulls stats from the proposal website listed above as well as onchain statistics such as total voters. (This site is created and maintained by delegate dated.)

Ok, so how to vote/stake?

Before we go even deeper into delegates, percentages, inflation and calculations, let’s get to the part you came here for.

Step 1

First we want to get the official ARK Wallet called ARK Vault.

Click Launch App to get started.

Step 2

Now we want to create a profile by clicking the plus sign.

** If using for the first time you may see an install option popup. This is because ARK Vault is a progressive web app. You can install it or continue to use it as a web based app. If you want to install it then simply follow the instructions. There are also great docs to install found here on ARK Vaults Install Docs site.

Step 3

Choose a profile name and check the terms of service box. You can also change your avatar by clicking the image next to profile name, choose a profile password if you like, choose your preferred currency valuation and even choose light or dark mode.

Once you are satisfied just click create at the bottom.

Step 4

We have now setup a profile in ARK Vault, you can click your newly created profile to continue to your new ARK wallet.

Step 5

Here is your brand new ARK web based wallet. This works on any device or operating system. These steps are the same if you install it or continue using the web version. You can also vote from your Ledger hardware wallet as well by connecting your ledger and selecting import ledger.

** Storing ARK on a Ledger Hardware wallet can be done by opening up your ledger live app and installing the ARK app from the ledger live menu. You will then be able to access your ARK address and view it in ARK Vault. Everything is the same in these steps to vote but you will just need to approve anything on the ledger itself.

Step 6 - pay close attention

Click create to create a new address. This step is very important. You must write down all the words in order. One space between each word, with no space at the beginning or end of the words. You must save these words and hold on to them. This is your mnemonic passphrase also known as seed key, recovery phrase, passphrase.

If you lose these words, you have no way to ever recover your address and it’s contents. Your passphrase is your ARK. You can access your ARK anywhere in the world at anytime with this simple passphrase. There is NO way to recover lost passphrases so be mindful during this process and store your passphrase safely.

Now that you have written down your passphrase and stored it somewhere safe, you have the option to use wallet encryption

This simply means you can create an easy to remember password that will act as your passphrase. This way you dont have to enter your 24 words every time you send a transaction, you will only need to remember your short password. This is only a convenience option and simply encrypts your passphrase as a password to store locally so be sure to keep that passphrase stored safely in case you lose access to your local device or your web cache is reset.

Step 7

Now it’s time to confirm your passphrase. This is a safety step to make sure you stored the passphrase safely. Just answer the questions and click continue to move to the next step.

If you have chosen to encrypt your passphrase you will get an additional step now to create a password. Choose a password and click continue to move on.

Step 8

We have now created an ARK address and you should see it on your screen.

Here you also have the option to name the address, but this is optional. Click go to wallet to move on.

Step 9

You are now inside your newly created address. You can create as many addresses as you want at anytime and they will all be listed under your portfolio tab in the wallet.

Now you must send ARK to your new address. You can copy the address by clicking the little copy icon next to the address.

Once you have copied the address you can use that as your receiving address to send to. You can send ARK from another ARK address or wallet or grab some ARK from an exchange. Here is a current list of all known exchanges that support ARK.

There is also an up to date list of exchanges on the ARK Blockchain Explorer called ARK Scan as well.

Once you have sent ARK to the address, it will confirm extremely fast and you are ready to vote!

Step 10

Let’s vote!

Clicking the vote button will take you to a list of current delegates ranked by the amount voting for them.

This list is many pages long and you must remember that only the top 51 delegates are actively forging. Anything outside of the top 51 is campaigning to get higher on the list to move into a forging spot.

Choose your vote carefully. Use the links provided above to see the delegate proposals and then check the calculator to see if that delegate shares a percentage of their forging rewards. Some delegates are private and do not share so you must pay attention closely.

For the sake of this article, we will be choosing a known sharing and contributing delegate, strake foundation. Simply click select next to the delegate to begin the vote process.

Now click continue at the bottom.

This will take us to the confirmation screen to adjust your fees and review your transaction.

Simply choose slow fee and continue through the process.

** There is currently no incentive for the network to choose a higher fee over a lower fee so always select the lowest. This may change with the upcoming network upgrades but for now it remains low and processes at the same speed regardless.

The next screen will either be imputing your passphrase or password and to confirm, followed by the transaction sent screen with your transaction id and information.

That’s it! You are now staking ARK. You can check back to see your rewards periodically. Remember that every delegate is different and sends staking rewards at different time intervals and days, this should be laid out in their proposal.

Lets get into the numbers

I hope this was easy to understand so far and you learned something about ARK and how the network and delegates operate. If you have read this far, why not learn a little more? It’s time to get a little more technical to understand how rewards work and why every delegate has different sharing percentages and the numbers continue to change.

Inflation and Rewards

At the protocol level, each validated block generates 2 ARK coins. These coins are rewarded to the validator that processed the block. This process is similar to a validated block on bitcoin which rewards the miner or pool that processed or solved it. You can actually think of sharing validators on ARK as pools.

With a block time of 8 seconds, ARK’s network processes approximately 7.5 blocks per minute, resulting in 450 blocks per hour. Therefore, a total of 21,600 ARK tokens are produced every day across the 51 delegates.

In an ideal network scenario without any latency issues, downtime, or missed blocks, each validator would forge approximately 423 ARK coins per day. This calculation assumes that all validators consistently validate blocks without any interruptions or failures.

*Please note that this calculation represents an ideal scenario, and in reality, various factors can affect the actual amount of ARK tokens forged by each delegate.

Now, this is a static number. There will never be more ARK created per day, but due to missed blocks and downtime there may be less ARK created per day.

Since this is a static number, we can easily calculate ARK’ s inflation rate overtime as illustrated in this graph.

You can see that inflation steadily declines overtime based on total ARK in circulation to only 1.54% in 50 years time. Resulting in a little over 500 million ARK being in circulation by that time. This simple calculation and graph can be expanded upon into hundreds of years as well, but let’s stick to 50 for now. This is of course based on 51 validators running the network. If this number was to change to 53 validators in the future, we can easily adjust our calculations and graph.

Missed Blocks and Round Time Extensions

When a delegate’s node misses a block, that block is pushed to the next available delegate. A total of 51 delegates is equal to one round. Each round is randomized so a missed block is pushed to the next available delegate in that round. This extends the round time. Which in turn brings the total ARK forged by the delegate that missed the block down and the network allocates that missed blocks reward to the next delegate that forges it. Missed blocks are simply missed by the delegate, not the network. The block and all transactions are just shifted to the next delegate in line and never lost.

It is important to check a delegate's missed block percentage over time. A delegate consistently missing blocks is not good for the network. A delegate's sole responsibility is to properly run a node and secure the network. This means running at least minimum node specs. It is the voters responsibility to use their vote accordingly. Voting for a delegate that cannot maintain their node properly is bad for the network. Even if the delegate is sharing a high percentage of their rewards with voters, it is still very bad for the network and they should not be voted for. Remember that the network is run by delegates and their voters.

You can see all delegates missed blocks on the ARK Block Explorer. Currently displayed as productivity percentage. You can also see missed blocks in real time in the arkbot channel in the ARK Community Discord.

Dilution and Staking Percentage Changes

A tricky thing to remember is that ARK block rewards are static. Meaning each delegate can only forge the maximum allotted number of ARK each day. If the delegate offers staking/voting rewards, you must calculate the total number of votes and divide it by that static number. So if a delegate offers a 50% share rate, that means only 50% of their total forged or block producing rewards are shared with voters.

Let’s say the delegate validated all their blocks for the day with no issues, that means they received a little more than 422 ARK for the days work. The delegate will then share 50% of that with all voting addresses. So now there is 211 ARK to share between all of the voters.

If a delegate only has 1 voter, then they get all 211 ARK, if there is 2 voters then it is divided between them and so on. The share each voter receives is directly proportionate to their total holdings also. So if the delegate has 100 ARK voting them by 2 addresses and voterA has 75 ARK and voterB has 25 ARK. Then voterA will receive 75% of the 211 share and voterB will receive 25% of the 211 share proportionately.

This is called dilution. Sharing a fixed percentage between a group that varies in size and holdings. The more voters, the more dilution. This is why you will see delegates paying better even with lower sharing percentages near the bottom of the 51 as opposed to the top of the list. Just because they are number one, doesn’t mean they payout the most due to dilution.

Conclusion

It’s always good to remember that ARK does not offer staking at the protocol level, delegates choose to offer it themselves as an incentive for votes. This is the easiest way for a delegate to get into forging by crowdsourcing and sharing like a pool in bitcoin mining.

Be sure to research who you vote for or stake with, and continue to keep tabs on them to hold them accountable for running the network properly and fulfilling any promises they may have. Remember, you control the network with your votes.

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If you enjoyed this article, we would really appreciate your vote for our delegate. In addition to our proposal here you can find more information about Strake at https://strake.foundation/delegate/.

Follow us on Twitter https://twitter.com/StrakeTeam

Follow ARK announcements and community discussions on the ARK Community Discord https://discord.gg/arkcoin and Reddit https://www.reddit.com/r/ArkEcosystem/

For those that prefer telegram with nothing but announcements, check out https://t.me/arkannouncements

This article was put together by The Strake Foundation. The official ARK Wallet, ARK Vault, is built and maintained by Ardent.