FAQ for Delegators


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Below are a set of common questions that will be updated over time. Feel free to ask new ones here or in our discord chat : https://discord.gg/EACST77

Our wiki has a set of comprehensive resources and tutorials on delegating: https://github.com/livepeer/wiki/wiki/Delegating

What is Delegating?
Think of delegating as committing to the network long term. Delegating and Bonding can be used interchangeably. When you bond, your tokens are locked in for at least as long as the UnbondingPeriod, which will likely be a couple months. It’s like putting down a security deposit.

How long am I locked in for when I bond?
Currently, the UnBonding Period is set to a couple of months

Why should I bond?
In exchange, you earn newly minted token and fees from the network, growing your total ownership in the network. People who do not bond will have easy access to their tokens and liquidity, but their ownership in the network will decrease as new tokens are released that they won’t receive. While people who bond will give up immediate liquidity in exchange for growing their ownership in the network, and helping to make the network high quality and secure.

How much token will I earn from bonding?
That depends on how much total bonded stake there is, and what the inflation rate is set at. If the network is going to issue 10% more token this year, and 50% of all the token on the network is bonded, and you bond all year, then you will earn 20% more token. At the beginning of the year 50% of the network was bonded and 50% of the network was bonded. The additional 10% of tokens all went to the portion that was bonded. So at the end of the year the bonded holders now hold 54.5% of the network token. Their network ownership increased in exchange for making the network useful, secure, and high quality.

Why would I delegate my bond towards another transcoder?
You likely don’t want to be a transcoder on the Livepeer network yourself unless you’re running reliable always on hardware, have a lot of bandwidth, and can do the DevOps work to keep the Livepeer processes running around the clock. Instead you should delegate towards other users who have proven that they can do this and create a high quality network. In exchange for doing so, you’ll receive newly minted tokens from the network’s inflation, and you’ll receive a share of the fees the transcoder earns.

Is it ok not to bond?
Yes. It is okay not to bond. However if you’re holding token for a long time without bonding it, then your relative power to do work on the network will decrease if you do not bond. The protocol assigns new token to those who bond, increasing their ability to do work in the future.

Can I bond more stake later?
Yes, you can always add more bond. In addition, the newly minted tokens from inflation will be added to your bonded balance so it will grow over time. The fees that transcoders who you delegate towards pay out to you will be added to your unbonded token balance in the current design?

Why do I have some fees in ETH and some in LPT?
Rewards are credited towards your bonded stake. If you have 100 bonded stake, when you credit yourself with rewards, that is automatically in bonded stake. So if you get 10 reward token its 110. If you get fees, since fees in denominated in ETH, it is a separate “Collected Fees”. Those are not restricted from unbonding / bonding period. You are allowed to cash out. Idea behind this is because right now this is a long unbonding period to ensure capital is locked up so that people can be incentivized and punished properly, to make people more entrenched. If you are a transcoder, you need to pay service bills. On the flip side if you have number of jobs and efes, you can sell this ETH to pay for service cost.