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Staking ICX: How Validator Bonds Affect Staking Rewards

ICON Economic Policy - Bonds (1)

February 23, 2024



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ICON governance has voted to pass a new economic policy through a decisive network vote (Revision 25). This update introduces changes that aim to enhance decentralization, adjust rewards and penalties, and overall, fortify the network's resilience.

In this third part on Staking ICX, we will look at validator bonds and how they can affect staking rewards for voters. Check out the previous posts here:

Understanding Validator Bonds

Validator bonds represent a portion of ICX that validators commit as collateral to participate in the network's consensus process. This mechanism is designed to align the interests of validators with those of the network and its participants, ensuring a commitment to network performance and security.

Under the new policy, validators are required to maintain a bond that is at least 5% of the total ICX votes they receive. This is not just a number; along with the commission it plays a crucial role in determining the rewards distribution for both validators and their voters.

Impact on Rewards Distribution

The introduction of validator bonds significantly influences the dynamics of rewards distribution:

  • Enhanced Reward Potential for Committed Validators: Validators who bond more than 5% of their voted amount stand to benefit from an increase in their prepPower as new voters delegate ICX to them. An increased prepPower means a larger share of the network's rewards for both the validator and their supporters.

  • Dilution of Rewards for Minimal Bonding: Validators with a bond equal to or less than 5% of their received votes face a different outcome. Any additional delegation from new voters doesn't increase the prepPower, leading to a dilution of rewards among all voters. This dilution occurs because the monthly reward pool is divided across a larger total delegated amount without an increase in prepPower.


Find a detailed overview of how to calculate the rewards here

In light of these changes, voters are encouraged to scrutinize the bonding levels of validators before delegating their ICX. Selecting validators who maintain a healthy bond above the 5% threshold can maximize rewards and contribute to the overall health and security of the network.

Tools and Resources for Informed Decisions

To assist in navigating these changes, several resources are available to the ICON community:

  • ICON Tracker: Provides up-to-date information on validators, their bond percentages, and other relevant performance metrics.

  • ICON Community Forums and Discord Server: Serve as platforms for discussions, sharing strategies, and obtaining insights on which validators are committed to the network's success.

FAQs on Validator Bonds and Rewards

Can validators adjust their bonds frequently?

Validators can adjust their bonds, but such adjustments should be strategic, considering the implications for reward distribution and network commitments.

How often should I assess the bond levels of my validators?

Regular evaluations of your validators' bond percentages are recommended. This proactive approach ensures that your ICX is staked with validators who are positively contributing to your rewards and the network's resilience.