ARK: EARN INTEREST PAYMENTS ON YOUR HODL

WHAT IS ARK?

In this blog post I am going to write about how you can participate in the ark ecosystem by voting for the proposals of ‘delegates’ which will enable you to receive interest paid in ark.

SO I CAN EARN ARK INTEREST BY VOTING?
Ark is a blockchain ecosystem that uses delegated proof of stake (dPOS) to reward users for forging blocks and securing the network. In arks delegated proof of stake consensus only the top 51 addresses with the highest number of votes are able to forge new blocks and receive the block rewards. This is actually quite beneficial for the network since delegates are in direct competition with each another to gain enough votes to land a spot within the top 51 addresses. This provides delegates with an incentive to add value to the community to ensure that they have enough votes to be given the right to forge new blocks. Voting is optional and users can vote for a delegate using the ark desktop client which will cost the user 1 Ark. Each ark address can vote for only 1 delegate at any given time although users are able to unvote their chosen delegate at any time which will cost the user 1 Ark. Once a user has voted they are still able to send and receive ark the same way as before. However, the number of ark contained within the address at any given time will also provide an equal number of votes to their chosen delegate. For example, a user with a balance of 1000 ARK in their wallet would provide 1000 votes to the delegate they have voted for. Any additional ark deposited or withdrawn will increase or decrease the votes in the ratio 1:1 since 1 ark provides 1 vote.

One of the benefits of this system is that only the top 51 addresses with the highest number of votes can forge blocks and therefore users wishing to become delegates usually provide incentives for anyone that votes for them. These incentives are outlined in the delegates proposal page which is essentially a campaign for persuading users to vote for them. It will come as no surprise that profit sharing is offered by most successful delegates whereby voters are paid a percentage of the rewards from the blocks that are forged by the delegate. Some delegates share 100% of the profits with their voters although it is not always the best option for a user to vote purely on the percentage of shared profits. Below I have listed some important considerations when deciding on a delegate.

THINGS TO CONSIDER WHEN CHOOSING TO DELEGATE ARK

1. MINIMUM NUMBER OF VOTES REQUIRED – Some delegates require users to maintain an ark balance above a certain amount before they can receive any shared profit. Additionally, some delegates will have a maximum amount that you are able to vote with, with any additional ark balance being excluded from your percentage share count.

2. MINIMUM PAYOUT AMOUNT – Often delegates will have a threshold that will need to be met in order to be paid out your profit shares in the next payment round. This is an important consideration to make since low balances will take much longer to reach the pay-out threshold of a delegate with minimum pay-out 0.20 Ark such as yin than they would with a delegate such as arkland that has a minimum pay-out of only 0.01 Ark. This may affect your annual return due to the power of compound interest.

3. PAYOUT FREQUENCY – Compound interest may also be affected by the pay-out frequency of delegates. For example, some delegates have payment rounds 4 times a day whilst with others you may only receive a payment every 7 day.

4. NUMBER OF VOTES ALREADY RECEIVED BY DELEGATE - The total number of votes received by the delegate can have a major impact on the percentage of the profits you will receive from the blocks forged. Delegates that are further down the list may also lose the right to forge blocks if a candidate obtains enough votes to push them out of the top 51 addresses.

Number 4 is probably one of the most important considerations to make when deciding to vote for a delegate – this is because each of the top 51 addresses will forge an equal number of blocks in any 24-hour period and receive the same amount of coins per block. this means that the delegate with the most votes will receive the same amount of rewards as the delegate at position 51 with the least amount of votes. therefore, the profit received from delegating to users with the lowest ranking will often be higher in proportion to the number of ark you have delegated to them. The problem with this is that delegates with lower ranks have a much higher chance of being outvoted and losing their position within the top 51 accounts able to forge. essentially, the lowest ranking delegates provide greater rewards but also come with the highest risk of losing their right to forge new blocks.

Above is an image taken from the biz classic website that provides a stability rating of delegates. the stability rating is a measurement of the number of each delegates top voters that would cause them to lose their forging rights if they were to ‘unvote’ that delegate. as you can see biz classic would need to lose their top 225 voters for their vote amount to fall below position 51 and lose their right to forge new blocks. Arkworld, on the other hand, would only need to lose the votes of their top voter to lose their right to forge blocks.

5. REGISTRATION REQUIREMENTS – Some delegates require that their voters are registered with them to vote. This is usually simple enough but be sure to check out the delegates proposal to ensure that you meet their registration requirements. Other delegates are private and as such you will be unable to delegate your vote to them.

6. BONUSES OFFERED – Some candidates offer special bonuses and rewards for users that vote for them. For example Biz_classic have a faucet that enables their voters to win ark by using the online game on their faucet page.

7. TRANSACTION FEES – Finally, voter’s transaction fees are sometimes covered by their delegates. That means that if you are a person that makes a large amount of transactions in/out of your ark address it may be more beneficial for you to vote for a delegate that will cover your transaction fees.

MY VIEW

I believe that ark is a great cryptocurrency with a great vision and use case. The typical profits for staking can be anything from around 5-15% annually depending on the delegate you vote for, the amount of voters for that delegate and the percentage share you will receive for the amount of ark you hold in that address. For transparency, I delegate my votes to arkworld which currently pays me out around 9% per year. A calculator that can estimate your current daily pay-out can be found here. .

Thanks for reading!!

What do you think of ARK cryptocurrency staking?

Let me know in the comments what coins you are currently staking as I am always on the lookout for other projects to add to my portfolio. I am currently staking Ark, Blocknet, Neo, VeChain, Ontology and Neblio and I am in the process of writing blog posts for each one.