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Polkadot FAQs

What are Polkadot's inflation and reward rates*?

Polkadot’s inflation rate is dependent on the staking rate of the network. It increases to 10% as the staking ratio approaches 50% (for a reward rate of 20%) and then declines sharply thereafter.

* Reward rates published by Coinbase Cloud are estimates based on publicly available information from third-party sources. Coinbase Cloud has not verified and does not guarantee the accuracy of this information. Reward rates on some protocols may vary based on the amount staked and/or other variables, including validator performance, so you should not rely on the accuracy of any reward rate ranges we publish, which are intended to provide an estimate. The actual rate of rewards earned may vary substantially and may change over time and Coinbase Cloud does not guarantee that you will receive any staking rewards. Staked assets may be subject to slashing penalties and risk of loss is possible, including up to the full loss of principal.

What is the minimum DOT to stake?

The minimum amount of DOT required to delegate is dynamic and changes every era (~24 hours). Delegators should also always leave 0.1 - 1.0 DOT in their account un-nominated to cover the cost of transaction fees.

You can find the current minimum required stake to delegate by identifying the least “other stake” amount nominated to the smallest validator in the active set. On a Polkadot validator explorer such as Polkadot.js, scroll to the bottom of the validator list and locate the last validator on the list (this is the smallest validator). Select the drop-down arrow to view all “other stake” delegated to the validator. The smallest quantity of DOT listed is the minimum required to stake in the current era.

What are the risks associated with bonding?

Validators can be slashed for misbehavior (e.g. being offline, equivocation). The slashed amount is a fixed percentage. A validator with more stake gets slashed more total DOTs. Since rewards are evenly distributed among validators elected to the consensus group, there is no economic advantage in staking more DOTs than required to be in the active set. In fact, because slashing is proportional, staking excess DOTs increases the loss in the event of slashing.

In general, Polkadot slashing is based on security threat levels:

Threat levelSlashable behaviorMax % slashed
Level 1Low security threats such as isolated cases of unresponsiveness0.1% (or kicking the validator out of the active set)
Level 2Misconduct that occurs in good faith but is due to bad practices1%
Level 3Misconduct unlikely to happen in good faith or by accident, but does not lead to serious security risks or resource use10%
Level 4Misconduct that a) poses a serious security risk to the system, b) shows large levels of collusion among validators, and/or c) forces the system to spend a large amount of resources to deal with them100%

How does Coinbase Cloud's service fee work?

Coinbase Cloud charges a percentage service fee on all rewards earned by tokens delegated to our Polkadot validator. The service fee is paid to Coinbase Cloud automatically by the protocol. You can withdraw your rewards from the protocol directly.

Why should I select all Coinbase Cloud validator addresses to nominate when staking?

When you nominate up to 16 validators, each era the protocol will automatically allocate your stake to the validator(s) you have nominated which have also been selected to participate in the active set — and to earn rewards in exchange for doing so.

Because of this ability within Polkadot, your performance will be optimized by nominating all of the validators in the list, as the more validators you nominate, the greater the likelihood that at least one of those validators will be selected to earn rewards each era.

You can learn more about Active and Inactive Nominations, and how this allocation works, in Polkadot’s documentation.

What is a Polkadot Controller?

A Controller is a 1-to-1 proxy for your stash (where your tokens live). A Controller can act on behalf of the tokens in your stash to nominate validators and participate in consensus, without being able to send transactions. This helps protect your funds because your stash account will not need to be accessed often.

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