How does Grass token staking work?

What delegation means

Delegation points your Grass Tokens at a router. It is not a deposit with Grass, and it is not a transfer of your tokens to Grass. The Staking Terms are explicit that Grass is not your trustee and has no trust obligations in respect of your Grass Tokens or any Staking Rewards, other than what the terms themselves specify.

What delegation does do is lock your tokens with the router you chose. While they are delegated, and throughout the seven-day period after you ask for them back, they remain locked with that router and cannot be accessed or transferred.

Available Routers

You can only delegate through the Staking Program to a router on the Available Routers list at grassfoundation.io/stake/delegations. Delegating to any other router or staking service is outside the program and is not covered by the Staking Terms at all.

Two kinds of operator appear on that list. Some routers are operated by Grass. Others are operated by third-party providers that Grass has approved in advance.

Routers can be added to or removed from the list at any time.

One thing worth understanding about the approval

The Staking Terms describe the approval of a third-party router as "limited to an assessment of such Third Party Router's technological capabilities, solely as it pertains to the Grass Protocol." It is a technical check, not a check on the operator's conduct, finances, or track record.

Grass does not operate third-party routers, holds no ownership interest in them, and has no control over their commission rates or the rewards they pass on. Those can change without notice to you and without Grass's knowledge. A third-party operator may also ask you to agree to its own separate terms, which Grass does not control or see. The terms note that the people behind a third-party router may not be fully identifiable and may be in other jurisdictions, which limits what recourse you would have.

Delegation limits

You can delegate to a maximum of twenty Available Routers from any one wallet address at a time. If you want to delegate to more than twenty, you would need to use a different wallet address.

How Staking Rewards are split

Staking Rewards are awarded to an Available Router based on how many Grass Tokens are staked to it. When a router receives rewards, they are divided in two steps:

• The router operator retains a portion set by that router's commission rate, which is shown on the delegations page.
• The remainder is distributed among that router's delegators, in proportion to how much each delegator has staked with that router relative to the others.

Only delegated Grass Tokens count. Any other digital assets you may hold with the same operator do not generate Staking Rewards under this program.

Commission rates can be changed by the operator at any time, without prior notice.

What is not guaranteed

The Staking Terms state that "Staking Rewards are not fixed or guaranteed" and that "you may not receive Staking Rewards despite your delegation of Grass Tokens to an Available Router." There may also be a delay between delegating and any rewards beginning.

The mechanism itself can change. The terms give the example of Grass introducing a proof-of-stake consensus mechanism for the Grass Protocol, which would change how rewards are generated and awarded. Changes like this can be made without prior notice.

What the APR number on the delegations page is

If you see an APR figure, the Staking Terms define what it is: an Estimate. It is a way of expressing what rewards might be awarded over a year, calculated from the amount staked and other information available at that moment. It is not a guarantee, not a confirmation, not indicative of future performance, and the terms state it "is not in any way a form of advice or solicitation for the staking of Grass Tokens."

It moves as the total amount staked moves, including as the number of tokens in circulation changes. An estimate shown on the day you delegate is not a commitment for the period you stay delegated.

Nothing is automatic

Staking Rewards are not staked or restaked for you. To compound them, you have to manually claim them and then manually delegate them again. The terms also put the burden of noticing on you: it is your responsibility to check whether any rewards have accrued.

Gas fees are yours

You pay gas fees on every transaction: delegating, claiming, restaking, and requesting an unstake. These fees change over time.

Unstaking

You submit an Unstaking Request through grassfoundation.io/stake. Four things follow from that:

• The request cannot be cancelled. It is irrevocable once submitted.
• You forfeit rewards not yet awarded. Any Staking Rewards on the tokens in that request that have not been awarded to you at the moment you submit are forfeited.
• Seven days locked. Your tokens and rewards stay locked with the router for seven days and cannot be accessed or transferred during that time.
• The seven days is not fixed. Grass may extend or shorten the Unstaking Period at its sole discretion.

Grass may also unstake delegated tokens itself where it determines that is needed for compliance with the Staking Terms, the General Terms, or applicable law.

Risks the Staking Terms name

These are set out in the terms and are worth reading there in full. In summary:

• Slashing. Not currently part of the Staking Program. The terms reserve the right to introduce it in future, in which case a portion of tokens delegated to a router could be permanently destroyed in response to activity like reporting invalid web traffic or improperly censoring participants.
• Jailing. A router that breaches Grass Protocol rules can be temporarily or permanently barred from the program, which affects its ability, and by extension its delegators' ability, to receive rewards.
• Lock-up. The Unstaking Period, plus any additional or replacement lock periods Grass introduces later.
• Your own keys and addresses. You are solely responsible for your private keys and for entering correct addresses. Transfers are irreversible, so an incorrect address can mean permanent loss.
• Regulatory. Available Routers are not registered with, licensed by, reporting to, or supervised by any government agency or financial regulator, and no regulator has reviewed the Staking Program.
• Concentration. One router, or a group acting together, could come to control a significant proportion of tokens, with the effects the terms describe.
• Forks and disruption. Hard forks, hacks, and service interruptions are covered in the terms, which are provided on an "as is" and "as available" basis with no warranty of uninterrupted or error-free operation.

What Grass can change or end

Grass reserves the right to modify, suspend, restrict, cancel, limit, or terminate the Staking Program at its sole discretion. It will generally try to give prior written notice, but may give less or none in some circumstances. If the program stops, delegators are generally permitted to keep Staking Rewards already awarded, with exceptions the terms describe.

Grass can also refuse participation based on eligibility criteria it sets.

What Grass does not do

Grass does not provide advice or recommendations in connection with the Staking Program, and the Staking Terms state it is not your trustee or fiduciary.

Taxes are your responsibility. Grass does not determine what you owe, does not report it, and does not withhold it, except where required by law. The terms note that tax treatment in this area is uncertain.