XTZ Rewards: A guide to Delegation and Staking with Kiln
When it comes to the Tezos blockchain, baking refers to contributing to the network’s security and decentralization through block production. Kiln has been serving as a corporate baker, or validator, on Tezos since 2021.
To deepen our involvement with the protocol and accelerate Tezos adoption, Kiln partnered with the Tezos Foundation to provide enterprise-grade baking services for institutions.
With the Paris protocol upgrade on June 20, 2024, a new role—staker—was introduced. Before this upgrade, only bakers could stake XTZ, meaning users could only delegate their XTZ. Now, with Kiln, you have the ability to stake XTZ directly, offering greater rewards for institutions.
Difference between delegating and staking
Delegating means choosing a baker to represent your interests in Tezos' consensus and governance mechanism. You can think of this as “liquid staking”, as delegated XTZ remains accessible.
Staking, on the other hand, involves pledging your XTZ as part of a baker’s collateral, which helps ensure the economic security of the Tezos Layer 1. Staked assets are locked and earn triple the rewards of delegated assets (before baker fees) but also involve more risks, such as slashing. If the baker double bakes, stakers could lose up to 10% of their stake. In the case of a double endorsement, the loss could be up to 50%. It's worth noting that such events are extremely rare on Tezos.
Both delegating and staking are essential to keeping the chain running smoothly.
Why stake or delegate XTZ?
Stakers make a greater commitment, which translates to higher rewards. They also receive their rewards automatically, at the same time as bakers, without intermediaries. However, delegating XTZ remains an attractive option for those who want immediate access to their funds.
Staking is a two-step process. You must first delegate to a baker and then specify exactly how much you want to stake—any remaining balance stays as a delegation.
Unstaking is also a two-step process. After manually unstaking (which can be a partial or full amount), you must wait four cycles (approximately 10 days) before finalizing the process and reclaiming the unstaked funds to your wallet.
How to delegate and stake with the Kiln Dashboard
- Go to the Kiln Dashboard, your interface for staking and tracking performance with your team.
- Navigate to the /stake/xtz page to view staking information about the network and delegate your XTZ in just a few clicks with an intuitive onboarding process.
- Select the account you want to stake from and connect your wallet to delegate.
We support Fireblocks, Kukai, Temple, Umami, Plenty, as well as other wallet solutions you can find here.
Please note that to participate in staking, you first need to delegate your wallet's balance to a baker such as Kiln. This delegates all XTZ tokens in your wallet. Once delegated, you can choose to stake assets for a higher reward. Both delegated and staked assets earn rewards based on their share of the baker's baking power.
For a full breakdown of staking vs delegating, please visit the Kiln docs.
“As one of the pioneers in Proof of Stake blockchains, more institutions and organizations than ever before are choosing to build on Tezos because of its scalability, efficiency, and diverse ecosystem. I am thrilled to see Kiln continue to play an important role for our ecosystem in offering institutional staking for its clients around the world.” — Alexis Ponte, President of the Tezos Foundation
Conclusion
Since joining the Tezos ecosystem in 2021, we've gained deep expertise in its mechanisms and evolution. We're proud to support institutions with secure, high-performance staking and delegation, backed by SOC 2 Type 2 accreditation and industry-leading SLAs.
Check our performance on the TzKT.io block explorer, and if you're interested in XTZ staking, feel free to reach out here.
About Kiln
Kiln is the leading digital asset rewards management platform, enabling businesses to earn rewards on their digital assets, or to whitelabel earning functionality into their products. Our platform is API-first and enables fully automated validators, rewards, and data and commission management. With over $13 billion crypto assets being programmatically staked, Kiln has a particularly strong track record on Ethereum as we run about 4.3% of the network; this includes 50,000+ active validators with 0 slashing events.
