Kava is a cross-chain DeFi platform which supports multiple applications and services for cryptocurrency users, with a focus on allowing users to borrow USDX stablecoins and deposit a variety of cryptocurrencies to begin earning a yield. Built on the Cosmos SDK, Kava makes use of a collateralized debt position (CDP) system to ensure stablecoin loans are always sufficiently collateralized. If a borrower fails to maintain their collateral above a required threshold, the Kava liquidator module will seize collateral from failing CDPs and send it to the auction module for sale. KAVA is the platforms utility token and also functions as a reserve currency for when the system is undercollateralized.
Why should I stake my KAVA?
Staking is the process of locking up a digital asset (KAVA) to provide economic security for a public blockchain, therefore staking your KAVA helps secure the PoS Stargaze network. Further, most PoS blockchains are initially inflationary in nature, so staking your KAVA prevents you from getting inflated out of your position as you earn rewards for helping secure the network and validate transactions. Lastly, you can participate in network governance.
- Secure the network – With KAVA, you have the power to contribute to the security and governance of Kava network through staking and voting on governance proposals.
- Earn rewards – When you stake to a validator, you are contributing to the security of the network and are rewarded with KAVA through staking rewards.
- Vote for the future – Staking KAVA allows you to vote on governance proposals and contribute to making decisions on the future and direction of the network.
What happens when I stake my KAVA?
As Kava utilizes a PoS consensus mechanism, you can delegate an amount of KAVA you hold to a "validator", making you the "delegator". Validators on the Stargaze blockchain (and most other PoS blockchains) validate the network by approving transactions. The more KAVA a validator holds the more powerful they are and the more "vote" the have in the network, which allows them to validate more transactions, thus earning more rewards. By delegating your KAVA, you trust the selected validator to be a good network participant. From the earned rewards, the validator gives a certain percentage (stipulated by the network) back to the delegators that have delegated (staked) their KAVA to them.
That's how you earn rewards.
How much can I earn from staking my KAVA?
At the time this post was published, the APY (Annual Percentage Yield) for staking KAVA is 34%.
For the most up-to-date rewards rate, you can check out the Steakwallet app.
What is the minimum amount of KAVA I can stake?
To stake KAVA, a minimum of 0.05 KAVA is required. This ensures you can stake and also pay the Kava network transaction fee. You should always make sure to have enough KAVA available to pay for network fees, as all blockchain interactions (such as sending a transaction, staking, unstaking, or interacting with other dApps) require them.
How do I stake my KAVA?
When you stake your KAVA, you are able to choose how much of your KAVA you want to delegate to the validator. You can stake any amount of KAVA, for which you immediately start accumulating rewards. You will not be able to use the staked KAVA for anything else or sell them during the period the KAVA are staked.
Make sure you have enough KAVA in your wallet to pay for network transaction fees.
Please note: You will need to manually claim your rewards and re-stake them to earn the maximum possible rewards. More on claiming your rewards below.
Which validator is my KAVA staked to?
Currently, if you stake your KAVA with Steakwallet your stake gets delegated to validators run by Figment. Figment is a reliable partner and one of the most trusted validator providers in the industry. We plan to offer more optionality in the future.
How do I unstake my KAVA?
When you unstake your KAVA, you can decide on the amount you want to unstake. Once you confirm the amount, your KAVA will now be "unbonding" from the validator. This process takes 21 days, during which your unstaked KAVA is not earning any rewards. When you unstake your KAVA, any unclaimed rewards you may have will be auto-claimed.
Please note: When you unstake KAVA from any given validator, you can unstake at most 7 times in a 21 day period. If you try more, the unstake will fail. You must wait for one of the previous unstaking entries to expire.
When will I start earning rewards?
When you start staking your KAVA and the delegation is confirmed, you will start earning rewards on the staked amount instantly.
How do I claim my staking rewards?
On Cosmos SDK based blockchains, you need to manually claim earned rewards. Unless you have enough KAVA to cover network fees for claiming your rewards, you will need to wait until you have earned enough KAVA to cover the network fee.
On Steakwallet, there is a "Claim Rewards" button right below your staked balance that shows your earned rewards available for claiming.
Does Steakwallet take a cut of my rewards or charge a fee?
No. Steakwallet never charges a fee on your staking rewards.
Is KAVA staking safe?
Given that you always maintain custody of your assets (as Steakwallet is non-custodial), you always remain in full control.
While staking KAVA is relatively safe, and while we work together with Figment (one of the most reliable validators in the industry), there's always a risk of slashing. If a slashable event happens, you can lose a portion of your staked KAVA.
There are two ways you can be slashed:
- If you delegate to a validator that is offline for over 20 hours (assuming a 7.22s block time), you will lose 0.01% of the tokens you have delegated to that validator.
- If you delegate to a validator that signs the same block twice with the same key, you will lose 5% of the tokens you have delegated to that validator.
However, this is a very rare occurrence. Staking is one of the safest way to earn rewards in crypto.