NEXUS.IO BLOCKCHAIN 101 FAQs & GLOSSARY
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Nexus Frequently Asked Questions

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Staking

Staking is an energy efficient form of mining that provides security to the Nexus blockchain. NXS can only be staked inside the official Nexus Desktop Wallet with staking enabled, and with continuous Internet connection (24 hours a day, 7 days a week). In return, you are rewarded NXS at a stake rate of 0.5% to 3.0% per year on your staked holdings. To determine your % stake rate, Nexus has made a time-weighted reputation mechanism called ‘trust’ that records the consistent time that a node has contributed to processing transactions. Currently, it takes one year of consistent staking to build up enough Trust to earn a 3.00% rate of return. To learn more about staking, please visit the Staking page on the Resource Hub.

It is possible to stake with any amount of NXS and earn stake rewards at a rate of 0.5%. However, to grow your stake rate and reach the maximum of 3.0%, your node must find a Proof of Stake block at least every 72 hours. As of June 2021 it takes around 30,000 NXS to do this.

Genesis is the process by which a wallet creates a trust key to use for staking. This is the first step for staking a new wallet. When it creates a new trust key, the Genesis transaction will transfer your wallet balance to that key for staking. This has no impact on your wallet balance. After the trust key is created, the wallet will no longer stake Genesis, and will instead stake Trust transactions. Balance must have a minimum coin age of 3 days (72 hours) before the wallet will begin attempting to create a Genesis transaction. The Genesis transaction takes longer to generate than subsequent Trust transactions. For lower balances, it may stake for multiple weeks before you receive this.

These items affect the size and frequency of staking rewards after you receive your initial Genesis transaction. You can view the definitions of these terms in the Glossary.

For new wallets staking Genesis, total balance and trust weight calculated from coin age. For wallets after Genesis, total balance, block weight, and trust weight calculated from trust score. You can view the definitions of these terms in the Glossary.

Trust weight and stake rate will begin to decay. Without a transaction they will eventually decay back to 0.5%. Generating a new Trust transaction resets block weight, and trust weight/ stake rate continue increasing from their current values. Trust decays at a 3:1 rate to which it was gained. For a new key, it takes 1 day for 3 days of trust to decay. An established key holds onto trust much longer.

Establishing a new trust key is not immediate, by design. The network does not give away trust for free. You may see staking values decay back to the start multiple times before it manages to generate transactions frequently enough to keep going. If it decays back to the start, the wallet will display minimal trust weight of 1.11% with stake rate 0.5% and block weight 100% until it generates a transaction. This is normal. It is not stuck.

When you remove stake, there is an associated cost. If you remove a portion of your stake, it also reduces your Stake Rate. This is to reward those who consistently stake long term and do not frequently reduce their committed Stake amount. If you require frequent access to a portion of your NXS, consider keeping it in another account (such as your Default Account) and not committing it to stake.

There is no set time period in which it finds a new block. It is not at all unusual to go a period of time without a Trust transaction. They are more frequent if you have a higher balance and can vary somewhat as trust weight and block weight increase. As long as you find at least one Proof of Stake block which generates a Trust transaction within the 72 hour requirement, your trust and stake rate will increase. If it takes longer than 72 hours, trust and stake rate decay at a rate of 3:1. In other words, you lose 3 days of increase for every 1 day it exceeds 72 hours between blocks.