How to Restake on Tangle Network
Introduction to Restaking
This guide will walk you through the process of restaking using PolkadotJS, explaining important concepts along the way.
Key Concepts to Understand
1. Staking
- Definition: Staking involves locking up your tokens in a staking pool to help secure the network and, in return, you earn staking rewards. The staked tokens are used by validators to participate in block production and consensus.
- Impact: By staking, you're contributing to the security and decentralization of the network, while earning rewards.
2. Restaking
- Definition: Restaking is a process where staked tokens are reused to support additional services, such as providing security or computation for decentralized applications, without unstaking them from the original pool.
- Benefit: Restaking allows you to earn extra rewards from multiple sources while maintaining your original staking rewards.
3. Operator
- Definition: An operator is a validator or participant who manages restaking by offering services such as security or computation in exchange for additional rewards. By restaking, you can delegate your tokens to an operator.
How to Restake Using PolkadotJS
Step 1: Access PolkadotJS
- Action: Visit the PolkadotJS Apps (opens in a new tab).
- Select the Tangle Network: Use the dropdown menu in the top-left corner of the interface to switch to the Tangle Network.
Step 2: LiquidStake Your Tokens (If Not Already Staked)
- Action: If you haven't staked your tokens yet, navigate to the Lst tab, click on *Join**, and follow the steps to stake your tokens. Ensure that the tokens are bonded to a validator.
- Note: You must first stake your tokens before you can participate in restaking.
Step 3: Deposit Your LST Tokens
- Action: Navigate to the Lst tab, click on Deposit, and follow the steps to deposit your LST tokens.
Step 4: Select an Operator for Delegation
- Action: Review the list of operators or services and select one that suits your goals (e.g., maximizing rewards or contributing to a specific decentralized application).
- Click on “Restake” or “Delegate Tokens”: This option allows you to reuse your staked tokens for the chosen service without unstaking them from the original pool.
Step 5: Track Your Rewards
- Action: You can monitor the performance of your restaked tokens and track your rewards under the Dashboard or Restaking section in PolkadotJS.
- Claiming Rewards: Periodically, you can claim the additional rewards earned from restaking, as well as your base staking rewards.
Risks of Restaking
1. Validator and Operator Risk
- Risk: The performance of the operator you restake with may affect the rewards you earn. Poorly performing operators may result in reduced rewards or penalties.
- Mitigation: Choose operators with a solid track record and transparent operations.
2. Smart Contract Risk
- Risk: Restaking often involves interacting with smart contracts or decentralized applications. Smart contract vulnerabilities could lead to loss of funds.
- Mitigation: Ensure that the protocol or operator has been audited and has strong security practices in place.
3. Complexity of Managing Multiple Restaking Activities
- Risk: Managing multiple restaking activities can be complex and may require close monitoring to optimize returns.
- Mitigation: Start with smaller amounts and monitor the performance of each service before fully committing your tokens.