Staking

Basics

HYPE staking on the Hyperliquid L1 happens within the staking native component. Just as USDC can be transferred between perps and spot accounts, HYPE can be transferred between spot and staking accounts.

Within the staking account, HYPE may be staked to any number of validators. Here and in other docs, delegate and stake are used interchangeably, as the Hyperliquid L1 only supports delegated proof of stake.

Each validator has a self-delegation requirement of 10000 HYPE to become active. Once active, validators produce blocks and receive rewards proportional to their total delegated stake. Validators may charge a commission to their delegators. This commission cannot be increased unless the new commission is less than or equal to 1%. This prevents scenarios where a validator attracts a large amount of stake and then raises the commission significantly to take advantage of unaware stakers.

Delegations to a particular validator have a lockup duration of 1 day. After this lockup, delegations may be partially or fully undelegated at any time. Undelegated balances instantly reflect in staking account balance.

Transfers from spot account to staking account are instant. However, transfers from staking account to spot account have a 7 day unstaking queue. Most other proof of stake chains have a similar mechanism, which ensures that large-scale consensus attacks are penalized by slashing or social layer mechanisms. There is currently no automatic slashing implemented on the L1.

The staking reward rate formula is inspired by Ethereum, where the reward rate is inversely proportional to the square root of total HYPE staked. At 400M total HYPE staked, the yearly reward rate is approximately 2.37% per year. Staking rewards come from the future emissions reserve.

Rewards are accrued every minute and distributed to stakers every day. Rewards are redelegated automatically to the staked validator, i.e. compounded.

Technical Details

The notion of a quorum is essential to modern proof of stake consensus algorithms such as HyperBFT. A quorum is any set of validators that has more than ⅔ of the total stake in the network. The operating requirement of consensus is that a quorum of stake is honest (non-Byzantine). Therefore it is an essential responsibility of every staker to only delegate to trusted validators.

HyperBFT consensus proceeds in rounds, which is a fundamental discrete bundle of transactions along with signatures from a quorum of validators. Each round may be committed after certain conditions are met, after which it is sent to the execution state for processing. A key property of the consensus algorithm is that all honest nodes agree on the ordered list of committed rounds.

Rounds may result in a new execution state block. Execution blocks are indexed by a separate increasing counter called height. Height only increments on consensus rounds with at least one transaction.

The validator set evolves in epochs of 100000 rounds, which is approximately 30 minutes on mainnet. The validators and consensus stakes are static for each staking epoch.

Validators may vote to jail peers that do not respond with adequate latency or frequency to the consensus messages of the voter. Upon receiving a quorum of jail votes, a validator becomes jailed and no longer participates in consensus. A jailed validator does not produce rewards for its delegators. A validator may unjail themselves by diagnosing and fixing the causes, subject to onchain unjailing rate limits. Note that jailing is not the same slashing, which is reserved for provably malicious behavior such as double-signing blocks at the same round.