Staking rewards %
The estimated rewards % posted throughout the Bitbuy app is a calculated Annual Percentage Yield (APY) rate, which is derived from a rate reported to us by our Staking partner, BitGo. The reported rate is then reduced by Bitgo’s fee and Bitbuy's fee, leaving the estimated rewards % that is displayed to you. The displayed rate is what you can expect to earn by staking the asset. The reward rates can vary based on factors related to the blockchain network of the asset you are staking.
Auto-compounding
Bitbuy automatically stakes all rewards earned through staking. This means that the rewards that you earn begin earning you greater rewards once they complete the requisite bonding period for that specific network. At this time, Bitbuy does not allow clients to opt out of auto-compounding without withdrawing an amount of staked assets which causes the total amount of that staked asset to fall below the minimum stake amount.
Staking fees
For all assets, Bitbuy will charge a fee of up to 30% on any rewards earned. Additionally, BitGo, the custodian through which staking is performed, charges a fee of 9% on the gross amount of rewards earned. The Crypto Asset Statement for each asset outlines exactly how staking fees are removed from the gross rewards before any rewards are paid to clients.
Minimums
This is the minimum amount you must stake. It differs by asset, but Bitbuy strives to keep this amount low, to make staking accessible to more users.
Payout frequency
This is how often you will accrue or receive rewards for staking. This is set by the blockchain network you are staking assets on. This may vary from a few days to a few weeks.
Bonding Period
Bonding periods, also known as warmup periods or activation periods, are the amount of time a blockchain delegator waits before their asset starts earning rewards. This period can vary between a few days to a few weeks and is set by different networks.
Unbonding period
Unbonding periods, also known as cool-down periods, are the amount of time it takes to unstake your staked assets. During the unbonding period, assets are not staked but are also not available for trading until the assets have completed unbonding.
Slashing
In proof-of-stake blockchains, validators earn staking rewards for staying online and acting as per the rules of the network, and they miss out on rewards if they are offline or fail to validate transactions properly. In simple terms, slashing is the penalty mechanism to ensure that validators are doing their jobs properly.
Our staking infrastructure is operated by Figment, an industry-leading operator with a large dedicated DevOps and Engineering team that continuously monitors and operates our robust infrastructure to reduce the likelihood and severity of downtime or a slashing event. Figment validators have an excellent track record, and Bitbuy provides extra peace of mind as we may, at our sole discretion, reimburse clients in the unlikely event of slashing penalties