Valar Peer-to-Peer Staking Platform

Zurich (8 March 2025) — The Algorand blockchain has recently started rewarding users that contribute to network security by producing blocks, i.e. users that are staking their ALGO. Algorand currently offers an annual staking reward rate of about 6–7%, paid on a per-block basis. Algorand’s design supports self-custodial staking, where users can choose to keep the staked funds in their own wallet. This means they do not have to send their funds to an exchange or a staking pool, which may be subject to additional security risks. However, users still have to either run an Algorand node on a computer themselves, or have someone else do the node running on their behalf. The Valar Peer-to-Peer Staking Platform makes it easy for Algorand users to connect and establish agreements with node runners, so that they can stake their ALGO from their own wallet and without having to run an Algorand node.

Manual Matchmaking and Collaboration Management

The typical procedure was to look for and connect with node runners through friends and social media.

For years, even before staking rewards were introduced on Algorand, users have been looking for secure ways of staking while keeping their funds in their own wallet. The typical procedure used to be to look for and connect with node runners by asking friends and posting on social media. When a user and a node runner finally agreed to collaborate, they would exchange some information, possibly including personal details. Management of the collaboration was done manually by monitoring on-chain information and by checking in on the other person using the agreed communication channel. Possible payment for the staking service relied on either trust or conventional contractual agreements, including long binding periods and KYC procedures.

Simple Secure Staking

Valar Peer-to-Peer Staking simplifies the matchmaking between users and node runners and it provides templates of contractual agreements with built-in payment and automatic contract resolution logic through the use of smart contracts. With Valar, users can stake through a node runner from anywhere on Earth without having to reveal personal information. Moreover, the smart contracts enable users a high degree of flexibility in establishing, extending, and ending contracts as they can be adjusted on a per-block basis. Similarly, node runners can easily customize the terms of their offered service via the smart contracts.

In summary, the Valar Peer-to-Peer Staking Platform comprises the following key operating principles:

• Peer-to-peer — Users connect directly with node runners.
• Delegated — Node runners participate in consensus on behalf of users.
• Self-custodial — The staked ALGO never leaves the wallet of the users.
• Incentivized — Users can receive staking rewards and pay node runners.
• Transparent — On-chain collaboration using immutable smart contracts.
• Decentralized — The platform and its source code are available to all.

The Valar Platform empowers both users and node runners. Users are able to receive staking rewards directly from the Algorand network into their wallet, without any intermediary, keeping sole control of their funds at all times. Users pay node runners for the provided service, which the node runners define themselves as part of the collaboration terms. Valar receives a 10 % commission from the node running service payments for platform development and maintenance. In addition, partner projects can receive a separate commission for referring users to the platform.

Six Weeks of Operation

Valar has grown to 200 active users, staking 46 M Algo in total.

Algorand has started distributing staking rewards on 23 January 2025, which also marks the launch of the Valar Peer-to-Peer Staking Platform. During this time Valar has grown to 200 active users, staking 46 M Algo in total. The platform has undergone several updates since, such as easier staking of funds involved in Algorand governance programs, simple extension of existing agreements, and more convenient node running. We are fortunate and thankful for the feedback from the early adopters and the Algorand community as a whole which has allowed us to improve the user experience of the Valar Peer-to-Peer Staking Platform.

Looking Ahead

Valar offers a plethora of features on the smart contract level, for which we are gradually adding support on the Valar user interface. For example, we are now simplifying access for users with strict security procedures, where the management and custody of the staked funds is handled by two separate accounts. Beyond that, we are exploring additional user interface enhancements for easier node runner evaluation, staking performance monitoring, and staking administration.

Sources

Staking rewards for PoS networks: https://www.stakingrewards.com/assets/proof-of-stake
Valar Peer-to-Peer Staking Platform: https://stake.valar.staking
Example of manual agreements: https://x.com/VariableCepheid/status/1719807657085698248
Nodely staking metrics: https://g.nodely.io/d/be4r0u3x9u7swc/staking