Delegation
Delegation allows users to contribute to the Beam Network’s security and decentralization without running a validator node. By delegating their BEAM tokens or Node Tokens, users support validators in processing transactions and maintaining the network.
How Delegation Works
Delegators can stake their BEAM and/or Node Tokens with validators operating Beam Nodes. While they don’t run a node themselves, delegators play an essential role in securing the network and enabling its decentralized functionality. Delegators may in return earn rewards.
Key Details
- No Minimum Delegation: Delegators can stake any amount of BEAM and/or Node Tokens, even as little as 1 token.
- Withdrawal Period: Delegated BEAM or Node Tokens are subject to a 21-day waiting period before they can be undelegated. If you instead decide to re-delegate to a different Beam Node, there is no withdrawal period.
- Rewards: Delegators earn rewards proportional to their stake from both primary rewards (transaction fees) and secondary rewards (protocol fees and Validator Incentive Grants).
- Commission Fees: Validators can set a commission fee on the rewards earned by their delegators, which varies by validator.
Delegation Rewards
Delegators receive rewards from two primary sources:
- Primary rewards: Transaction fees (gas fees) on the Beam Network, distributed in BEAM.
- Secondary Rewards: These include protocol fees (e.g., from BeamSwap and Sphere marketplace) and grants from Beam Foundation Treasury, which may consist of additional tokens and contributions.
Reward distribution
- 80% of secondary rewards flow to Node Token stakers (validators and delegators).
- 20% of secondary rewards flow to BEAM stakers (validators and delegators).
Slashing Risks
While delegation is a simpler way to support the network, delegators are not exempt from risks. If a validator is penalized for poor uptime, malicious activity, or misbehavior, their delegators will also face slashing penalties, losing part of their rewards.