3 reasons to stake DOT right now

Transition to NPoS is expected to happen this week. Validator elections and rewards will be activated during this stage. Is it reasonable to stake at the very beginning or better to wait for exchange listings and activation of token transfers?

There are more arguments for early staking, than against.

During NPoS, all nominators will earn staking rewards. For those who haven't nominated yet, each day will result in a missed opportunity to receive additional interest on their DOT holdings.

The period between NPoS and transfer activation is not defined. Some time will be taken to ensure that the network is stable enough before the next steps. After the enablement of decentralized governance, a technical committee and first councils should be elected. It will take at least 14 days. After that, someone will make a runtime upgrade proposal to remove sudo module, voting will take 28 days with an additional 30 days of enactment period before the upgrade.

If a proposal to enable transfers will be the next one it will also take 28 days to vote for and 30 more days of enactment period. To sum up, more than 4 months and more than one third of annual DOT rewards can be lost just waiting for the right moment to stake.

In the early days of the network the number of staked DOT will start from a lower value and will increase gradually over time as new holders will join staking. Assuming a constant number of validators before network stabilization, the barrier for a node to enter the active set will be lower in the beginning.

The average annual percentage return for a nominator depends on his share in the validator's total stake. It means that nominators who stake early obtain a bigger share in the validator pool receiving a higher portion of rewards. With enabled compounding nominators will be able to retain or even increase their share.

If Joe has 15,000 DOT and the total stake of a validator is 30,000 DOT, Joe will receive one half of the rewards obtained by this validator node. If the total validator stake is 45,000 DOT Joe will receive only one third. In this example, commission rate is not taken into consideration for illustrative purposes.

After raising the number of validator slots in the set, the barrier will decrease as well as the average stake among active validators meaning that the nominator's staking returns might increase even more.

Polkadot investors have been waiting more than three years for a return on their initial investment. Some are worried that locking DOT in staking can interfere with a quick reaction when DOT become transferable and appear on exchanges.

Enablement of transfers will be approved by the community of DOT holders via governance. The proposal will be voted for 28 days and if it is accepted, there will be an enactment period of 30 days before the upgrade. Tokens of participants who cast a Yay vote will be locked.

In Polkadot, it is possible to vote without locking DOT in the enactment period, in this case, the weight of a vote will be decreased by 90%. There will be enough time to initiate unbonding for those who wish to fix a portion of DOT holdings as soon as possible. It is much more attractive than refusing three months of additional interest.

In addition, we will notify nominators about the most important milestones and provide individual assistance in our Telegram chat.

If you lack educational information and can't find guides explaining the required steps, read the detailed guides we have prepared to simplify the process:

1. Create a Polkadot account
2. Claim DOT tokens
3. Nominate validators

P2P Validator is a world-leading non-custodial staking provider with the best industry practices and proven expertise. We provide comprehensive due-diligence of digital assets and offer only top-notch staking opportunities securing more than 3 billion of USD value. At the time of publishing, P2P Validator is trusted by over 10,000 delegators across 25+ networks.

Do not hesitate to ask questions in our Telegram chat or contact Alexey via [email protected]. We are always ready to help and open for communication.

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