BNB Smart Chain (formerly Binance Smart Chain) lets you enjoy borderless DeFi infrastructure with low fees. It’s powered by a set of 21 community validators that process transactions, provide computing power and hardware, and maintain network security. In return, they receive rewards from transaction fees and BNB staking.
Would you also like to contribute to the growth of BSC and earn a reward for it? Anyone who’s a holder of BNB can do that by simply staking BNB as a delegator. Let’s see how it works and how you can participate.
With that said, building an ecosystem and community of projects, infrastructure, developers, tooling, and users isn’t an easy feat. It’s what makes crypto so powerful, and it’s also what can make open-source software a type of common good.
The goal of community validators is to grow BSC into a bigger and more accessible ecosystem. So what does this actually mean, and how can you participate?
What is a BNB Smart Chain (BSC) validator?
Validators take turns to produce blocks. They essentially power the BSC network by processing transactions and signing blocks. In return for their service, they earn a reward in BNB tokens. Meanwhile, they also require daily re-election by staking governance to be able to continue to be part of the validator set.
What are the requirements to be a validator? A validator needs to spin up a hardware node with the required specs, run a full BSC node, and stake a minimum of 10,000 BNB. But that’s not all. These requirements are only enough to become an elected candidate.
What is a BNB Smart Chain (BSC) delegator?
Becoming a validator is not for everyone, so how can you participate as a regular user?
You can become a delegator and stake your BNB to validator candidates through one of the supported wallets. Through staking, you can choose your preferred validator and help them achieve the minimum stake required by the protocol.
Delegators can also do a process called redelegation. This means that they can transfer part of their stake from a given validator to another validator. Redelegation can be a great way to support more than one validator at the same time.
Delegators can also undelegate their stake. As you’d expect, this means that they stop delegating to the validator they’ve been delegating to. Note that undelegation works with an unbonding period of 7 days, at the end of which the delegator receives their staked BNB. The delegator doesn’t receive BNB rewards during the unbonding period.
Should I become a delegator on BNB Smart Chain (BSC)?
Well, the choice is up to you. By becoming a delegator, you’re delegating your stake to your preferred validator. You are also trusting them to vote on governance decisions on your behalf. Wait, there are also governance rights to BNB? Yes. Validators can govern certain network features of BSC, such as adjusting gas prices, changing system parameters, or even upgrading the blockchain.
By delegating, you also increase the validator’s stake in the overall reward pool. As both of you benefit from joining forces, both of you earn a reward. In February 2021, the average daily staking reward for a BSC validator was 134 BNB. Meanwhile, the average APR for BSC delegators was 60%.
While economic incentives are great and make the world go round, being a delegator isn’t only about the returns. By becoming a delegator, you are directly supporting the operation and security of BSC.
How to become a validator on BNB Smart Chain (BSC)
So you’ve decided you’re going to reach for the stars and become a BSC validator. What do you need to do?
To become a validator on BSC, you need to fulfill these requirements:
This will allow you to get on the validator candidate list and potentially attract more delegators to stake (delegate) their BNB to your validator.
As of March 2021, the top 21 elected validators all have more than 150,000 BNB staked, so you’ll have plenty of competition (which is good for the network’s overall health).
How to become a delegator on BNB Smart Chain (BSC)
Becoming a delegator is probably a better choice for you if you don’t want to go through all the technical nitty-gritty of becoming a validator. If you’re a holder of BNB, delegating your stake can be a straightforward solution to support BSC and earn a return.
You can check out these guides for how to stake your BNB using some popular wallets:
The staking rewards are distributed to delegators every day at 00:00 UTC. When you delegate your stake to a validator, you’ll start receiving rewards the second day after you have delegated.
Whether you’re a developer, user, or just a DeFi enthusiast, there are many ways to participate in building the BSC ecosystem. BNB staking, however, is an excellent way for anyone to get involved with BSC as a direct supporter of network health and security.