Avalanche FAQ
What are Avalanche’s inflation and reward rates*?
Network rewards on Avalanche are variable depending on the total percentage of AVAX staked and how long that percentage of the network has been staked. You can view the current average staking rewards on the Avalanche website. A longer staking period (see below) will result in a higher average annual staking rate.
The inflation rate on Avalanche is variable. Inflation emissions can be adjusted by governance. Transaction fees on Avalanche are burned rather than being distributed as rewards.
* 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 are the risks associated with delegating?
There is no slashing on Avalanche. As such, your staked tokens are never at risk of loss due to poor validator performance.
However, if the validator you are staked to performs poorly and does not receive rewards, you will also miss those rewards. This increases the importance of staking to a performant validator you trust, such as Coinbase Cloud’s trusted enterprise-grade infrastructure.
What is the staking period on Avalanche?
When staking on Avalanche, you must specify how long you would like to delegate your stake to the validator for. The minimum amount of time one can stake funds for delegation is 2 weeks, and the maximum amount of time one can stake funds for delegation is 1 year. A longer staking period will result in a higher average annual staking rate. This return can change and is based on the total circulating supply of AVAX.
Once you enter this staking period, there is no way to change these parameters: the validator you are staked to, the staking end date, the stake amount, or your rewards address. As such, it is important to stake to a validator you trust will perform optimally and securely, and ensure you pick the right staking end date as AVAX rewards are distributed after the staking period is complete.
What are the X, C, and P Chains on Avalanche? Why does my wallet address have options to toggle between X, C, and P?
- X-Chain is the Exchange Chain. Its sole purpose is for sending and receiving funds.
- C-Chain is the Contract Chain. This is the chain used for smart contracts and defi, and it has a 0x Ethereum-style address. If your AVAX is stored in Coinbase Wallet, your balance will be on the C-Chain.
- P-Chain is the Platform Chain. This is the chain for staking AVAX or serving as a validator. The P-Chain can receive transfers from the X and C chains through a Cross Chain transaction on Avalanche Wallet.
How does Coinbase Cloud's service fee work?
All validators on Avalanche charge a percentage service fee on rewards earned by tokens delegated to the Avalanche validator. The service fee is paid to Coinbase Cloud automatically by the protocol. You can withdraw your rewards from the protocol directly from your specified reward address after your staking period has ended.