Staking is Now Live on Mainnet

The $ZAMA token has two main utilities: fees and staking. Whenever a user does an encryption or decryption, they pay a fee in $ZAMA tokens, which is burnt by the protocol. On the other hand, the protocol mints tokens to pay operators running the protocol, according to a yearly emission rate, which is initially set at 5%.

The Zama Protocol uses Proof-of-Stake to keep operators accountable for their actions, such as computing confidential operations, or decrypting data for users. Operators are split into two categories: FHE nodes, which perform the encrypted computations, and KMS nodes, which run threshold decryptions for users.

There are 18 operators initially: 5 FHE nodes (Artifact, Blockscape, Luganodes, P2P and Zama) and 13 KMS nodes (Conduit, DFNS, Etherscan, Figment, Fireblocks, InfStones, Layer Zero, Ledger, Omakase, Open Zeppelin, Stake Capital, Unit 410 and Zama).

Each operator has to stake $ZAMA tokens to participate in running the protocol and receive the associated staking rewards. When rewards are distributed, they’re first allocated by role (coprocessors and KMS nodes), then split within each role pro rata based on the square root of each operator’s stake. FHE nodes receive 40% of the rewards, while KMS nodes receive 60%. This split will be adjusted over time based on infrastructure cost of FHE vs KMS nodes.

Token holders can help secure the network by delegating their tokens to the operators of their choice and share their rewards (minus the operator’s commission). When staking on an operator, delegators receive a liquid token representing their share of the staking rewards of that operator. As such, there are 18 LSTs, one per operator. Rewards can be claimed any time, but the stake itself has an unbonding period of 7 days.

The staking portal is live at staking.zama.org. All the people participating in the Zama Public Auction will be able to stake their tokens immediately once claiming starts on February 2nd.