Merging KYVE's Consensus and Protocol Staking Layers

Merging KYVE's Consensus and Protocol Staking Layers

Exciting changes are on the horizon for KYVE! Following the successful governance vote (Proposal #43), KYVE will merge its Protocol and Consensus Staking Layers. This update, planned for March 2025, introduces a streamlined staking experience with enhanced flexibility for validators and delegators alike. Here’s everything you need to know about the upcoming Staking Layer Merge Update.

What’s Changing?

After the update:

  1. Consensus Validators Can Join Pools: Validators on the consensus layer will be able to allocate their consensus stake to participate in protocol pools.

  2. Custom Commission Rates: Validators can define a unique commission rate for each pool they join.

  3. Stake Allocation Flexibility: Validators can specify the fraction of their stake they wish to allocate to each pool.

To ensure a smooth transition, validators must connect their protocol and consensus validators. This step is crucial for migrating existing protocol stakes to the corresponding consensus validators.

Impact on Users and Validators

For Users Staked on the Protocol Layer

  • Rewards at Update Time: All protocol rewards will be claimed automatically at the time of the update.

  • If Your Validator Completes Mapping: Your delegation will remain with the validator, and no action is required. However, the unbonding rules of the consensus layer will apply: 21-day unbonding period, 21-day redelegation cooldown, Chain slashing rules

  • If Your Validator Does Not Complete Mapping: Your funds will be returned immediately, and you’ll need to manually restake with a different validator.

For Users Staked on the Consensus Layer

If your validator plans to join the protocol layer, you’ll become eligible for additional rewards from the protocol. However, slashing events from the protocol layer may also occur. Contact your validator to confirm if they’ve activated protocol staking.

For Protocol Validators

All protocol validators will be removed from their current pools and must rejoin with a custom commission rate and a desired stake fraction for each pool. Outstanding commission rewards will be claimed automatically at the time of the update. Validators must complete their mapping to retain their delegators. For instructions, refer to the validator proofs guide. Validators who fail to complete mapping will lose all their current delegators.

For Consensus Validators

Consensus validators will now have the opportunity to participate in the protocol layer, earning additional staking rewards. By leveraging both staking layers, consensus validators can maximize their earning potential.

Preparing for the Transition

This update marks a significant milestone for KYVE, fostering a more integrated and efficient staking ecosystem. To ensure a smooth transition:

  • Validators: Complete your mapping and prepare to rejoin pools with your desired configurations.
  • Delegators: Monitor your validator’s mapping status and be ready to restake if necessary.

Stay tuned for further updates as we approach the launch date in March 2025. For questions or support, connect with the KYVE community on Discord or Twitter.