State of Staking: March 2024 Update

Overview

Staking is a critical component of the Andromeda network, playing a key role in both the chain and the operating system (aOS). It is a way to encourage our community members to support the growth of the protocol, secure the network, and incentivize users for their participation and contributions to the ecosystem.

Because of Andromeda’s unique protocol design, our staking models will be implemented in innovative stages, launched over time, and will evolve to reflect the protocol life-stage, key partnerships, and key growth opportunities. 

Our first single-sided staking implementation is expected to launch by April 2024.

Stage 0 is most suitable for advanced users, as it is a double-sided LP (Liquidity Provision) therefore users will have exposure to two or more assets using ANDR. Stage 0 Liquidity Providers should be comfortable and familiar with the principles, risks, and implications of Impermanent Loss, resulting from changes in the price of either asset.

However, Stage 0 is just the beginning. 

The Andromeda core contributors are committed to long-term staking and governance within the Andromeda ecosystem. Because of the design of aOS as a cross-chain operating system, there are unique opportunities for staking models that empower validators and contributors in new ways. 

Our commitment to innovation and community engagement extends beyond the current stage, and we have exciting plans in store for our dedicated stakers, with innovations including multi-asset staking reward mechanisms and launchpad mechanics working with partners integrating aOS.

Outline of Stage 1 Staking on Andromeda:

Single Asset Staking: Prepare for a streamlined staking opportunity that requires a single asset and fewer transactions to participate. 

Enhanced LP Rewards: We believe in encouraging loyalty, and Stage 1 brings with it additional staking rewards and incentives. By offering liquidity for the network, you can earn rewards while contributing to the security and stability of the Andromeda network. 

Future Stages of Implementation:

Multi-Asset Staking Rewards: With aOS integrating Layer 1’s, there is a future opportunity for earning multiple assets by staking ANDR and participating in the network as L1’s come into the ecosystem and use their native token to pay for transaction fees or other network fees associated with their integration into aOS.

Launchpad Opportunities: We plan to bring our community unique opportunities to participate or contribute to new projects, based on a tiered system that enables stakers to contribute early in other opportunities with our partner protocols.

Full details on future implementations will be released in the weeks before they become available. As the network expands, Andromeda will continue to roll out new features, partnerships, and opportunities that contribute to the growth and vibrancy of the ecosystem.

Reference Information

What is Proof-of-Stake?

Proof-of-Stake protocols enlist validators to ensure the smooth processing of transactions on the blockchain, thereby enhancing security and earning rewards in the process. This is a departure from the heavyweight lifting involved in Proof-of-Work, where miners wrestle with complex equations using machines that can sometimes power a small town. 

Within Proof-of-Stake, the addition of a validator node involves committing a predetermined quantity of virtual assets, commonly referred to as staking. Successful validation of transactions results in rewards for the validator‘s contributions to the network, as determined by the parameters outlined in the pertinent blockchain protocol.

Andromeda's on-chain Staking service offers participants the opportunity to stake virtual assets, contributing to the network's security by validating transactions across supported blockchains. Participants, in turn, become eligible to receive periodic rewards commensurate with the staked virtual assets, adhering to the guidelines specified.

Disclaimer: The material provided herein is for informational purposes only and should not be construed as business, financial, investment, trading, legal, tax, regulatory, or accounting advice. Andromeda’s on–chain Staking service has not been registered with or submitted for review by any monetary authority or other governmental or regulatory body. There are inherent risks with Staking and you should be aware of those risks before participating in Andromeda’s on-chain Staking service. (i.e. slashing, tombstoning, impermanent loss, lockups, etc.). Andromeda and its partners are new and experimental technologies and any information provided by Andromeda is subject to and limited by the Andromeda disclaimers, which you should review before interacting with the protocol.