With the upcoming rollout of the new Zilliqa 2.0 network, significant changes are coming to how staking works.

With Zilliqa 2.0, we are introducing a permissionless delegated Proof-of-Stake (PoS) mechanism for validator selection. This transition will reshape the way staking functions on the Zilliqa network, enhancing security, decentralisation, and efficiency.

The move to Proof-of-Stake with Zilliqa 2.0 is a fundamental shift in the architecture of the blockchain that will improve transaction throughput, reduce operational costs, and create a more energy-efficient and decentralised network. 

To learn more about Proof-of-Stake, read our previous blog post.

With this transformation, the way users stake their ZIL tokens and earn rewards will also be updated to align with the new consensus mechanism.

How staking currently works on Zilliqa

Staking was introduced to the current Zilliqa network to incentivise Staked Seed Nodes (SSNs), which serve as archive nodes and maintain a historical record of transactions. They also offer API access and receive a share of block rewards in return for their services.

Staked Seed Nodes (SSNs) must stake a minimum of 10 million ZIL to be eligible for staking rewards. A verifier mechanism probes the individual SSNs' availability and calculates their rewards according to their performance. ZIL holders have the option to delegate their tokens to an SSN, and earn a share of the rewards generated by that SSN. Delegators can withdraw their stake at any time, and if the withdrawn ZIL amount leads to that SSN’s stake falling below the required minimum, that node stops earning rewards.

When a delegator withdraws their stake, there is a 14-day unbonding period before their tokens are unlocked. This period will be retained on Zilliqa 2.0 and can be changed by decentralised governance vote.

This legacy staking system is permissioned, with SSNs needing to be registered with the SSNList smart contract, controlled by the Zilliqa  team, to be eligible for rewards.

ZIL holders can delegate their ZIL to SSNs through Zillion, the staking interface available at stake.zilliqa.com which provides information on active SSNs and allows users to claim their rewards.

This legacy staking mechanism has been integrated with a number of exchanges and wallets in the Zilliqa ecosystem, with apps like Torch Wallet building on this system to offer tools such as instant unstaking and reputation.

Other examples of innovative tools built on Zilliqa’s current staking mechanism include the first liquid staking launched on the network, stZIL, which delegators can receive by staking through Avely Finance.

Learn more about Staked Seed Nodes (SSNs).

With the launch of Zilliqa 2.0, the network will adopt a permissionless, more decentralised Proof-of-Stake system where staked ZIL actually plays a role in securing the network.

Staking on Zilliqa 2.0 

To improve transaction throughput, finality, operational costs, and energy efficiency, Zilliqa 2.0 shifts its consensus model from Proof-of-Work (PoW) to Proof-of-Stake (PoS).

Instead of being secured by a network of PoW nodes performing expensive computations on hardware that consumes vast amounts of energy, validators on Zilliqa 2.0 are PoS nodes that emerge from the existing Staked Seed Nodes (SSNs), who stake ZIL as collateral to secure the network.

Rewards will be distributed amongst validators on a per-block basis proportional to their stake but depending on their performance, providing them with an incentive to maintain network security and efficiency.

50% of the epoch rewards (51,000 ZIL per 3,600 blocks) are distributed among the validators based on how many blocks they proposed. If they together manage to propose 3,600 blocks in an hour (maintaining a one-second average block time) they will earn 51,000 ZIL in an hour. If the block time increases, validators will need to work longer for the same 51,000 ZIL.

The other 50% of the epoch reward is distributed among validators based on how many times they voted for a block proposal, allocated to the fastest two-thirds of validators weighted by stake.

Zilliqa 2.0’s staking model consists of a permissionless system with two layers. The deposit contract acts as a system contract that enables anyone with the minimum stake to become a validator. 

Delegation contracts interact with the deposit contract and can be deployed by validators to receive delegated stake. Validators which do run a staking pool to accept delegated ZIL are referred to as solo stakers.

We have created two reference delegation contracts: a non-liquid staking variant that allows delegators to withdraw rewards manually and a liquid staking variant that issues a non-rebasing liquid staking token whose increasing price reflects accrued rewards. These contracts have been developed in Solidity and will be audited before being made publicly available.

This means that ZIL holders will still be able to delegate their tokens to validators and earn a proportional share of the rewards for helping to secure the network. While rewards can be claimed immediately, withdrawals and validator switching will be subject to an unbonding period to maintain network stability.

This unbonding period is crucial to the security of the protocol, as it prevents validators from withdrawing their stake before they are punished for misbehaving. There are two penalties introduced for dealing with bad validators in Zilliqa 2.0: slashing stake for safety violations (equivocation) and jailing for liveness violations (missing blocks).

To facilitate the transition to Proof-of-Stake with Zilliqa 2.0, a staking portal will be introduced to the Zilliqa website, providing an easy way for ZIL holders to delegate their ZIL to listed validators. 

Next steps for stakers and validators

Once Zilliqa 2.0 is live on mainnet, new PoS validators and SSN operators will need to set up and operate a node on the new Zilliqa 2.0 network and stake the minimum amount of ZIL to the deposit contract to join as a validator. 

These node operators can then deploy delegation contracts to enable ZIL holders to stake ZIL through their node. The Zilliqa team will provide reference contracts and guidance for easy deployment.

Users who have delegated ZIL through SSNs will also need to manually move their stake to the new staking contracts once the mainnet migration is completed. 

The upcoming EVM staking portal will ensure a seamless transition, making it easier for users to delegate and manage their stake within the upgraded ecosystem.

All the systems above will first be available on the Zilliqa 2.0 proto-mainnet, giving ZIL holders and validators the chance to test out the process of migrating their staked ZIL and running a validator node on the new network.

We will shortly be publishing a full guide on how to move your staked ZIL to Zilliqa 2.0, so stay tuned to our blog and socials for the latest updates!

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January 2025 saw plans for an incentivized testnet, BEVM chain support, new DEX incentives, and new user guides, building great momentum.

The year 2025 is off to a productive start, and at Persistence One, we’ve wasted no time diving headfirst into some big moves! From Day 1, we’ve been laser-focused on pushing the boundaries of BTC interoperability, driving forward the vision we’ve laid out: reducing fragmentation and creating a unified BTCFi ecosystem.

As we enter the next phase of building the upcoming Persistence DEX V2, every effort is made to deliver a seamless and secure swapping experience for all BTC variants. With new things already in motion, we’re gearing up for an ambitious year full of productivity, and new initiatives.

Here’s a snapshot of what we’ve been up to in the first month of this exciting new year.

Persistence One’s big highlight for January

1. January started fresh as we unveiled a new, Bitcoin-aligned look for Persistence DEX V1. This updated design aligns seamlessly with the upcoming V2, creating a fluid user experience.
2. We made a video guide for XPRT stakers, who could be eligible for Nansen points at the start of the month.
3. A pivotal year like 2024 deserved a proper sendoff, so we shared a brief recap highlighting the journey.
4. What if AI could facilitate cross-chain swaps? We might have a theory.
5. We also announced a round of new incentives for Persistence DEX, providing more DeFi liquidity opportunities for our users.
6. Another MAJOR highlight was the announcement for support of BEVM chain on our BTC Interop testnet.
7. To highlight in more detail how the existing Persistence DEX V1 works, we published an article about it.
8. We released an in-depth thread for the community, on the best way to participate in governance while earning staking rewards.
9. Buckle up. This one is BIG. We initiated a discussion about doing a potential incentivised testnet for our upcoming V2, which would reward early supporters and encourage further participation.
10. The team also added support for Bitget Wallet on the Interop testnet. Bitget wallet has over 60M+ users, who can now explore the upcoming V2 testnet.
11. In partnership with Intract, which is one of the leading quest platforms, we launched a community activity with a pool of $1,000 in XPRT.
12. We also posted the eighth instalment of our popular ‘What’s Up Bitcoin’ series.
13. We also added support for TokenPocket wallet on the BTC Interop testnet.
14. The team also published a detailed thread explaining every step of the process to stake XPRT.

And because we believe in going the extra mile, here’s a bonus…

15. We released a series of guides and tutorials too for the following:
    • Guide to moving BTC to BEVM on the Persistence One Interoperability Testnet.
    • Guide to adding custom network in Trust Wallet.
    • Guide to setup and connect using Bitget Wallet to Persistence DEX V2 testnet.
    • Guide to setup and connect using TokenPocket Wallet to Persistence DEX V2 testnet.

Media & Community

The following are some of the highlights on the media and community side for Persistence One during January 2025:

1. Our COO, Jeroen Develter, shared a summary about Intents. How they operate. And the way this could streamline the user experience.
2. Jeroen also summarized on BTC Echo Podcast, what could possibly be the next BIG thing in Bitcoin.
3. The Persisters community brought incredible energy to discussions around the incentivized testnet proposal on the Persistence forum.
4. Once voting on the proposal began, the enthusiasm only grew. It’s safe to say we’re as excited as the community to see where this leads!

XPRT Governance & Token Highlights

Here are some of the most prominent highlights of XPRT governance in January 2025.

1. Proposal #123 was proposed to fund an incentivized testnet for Persistence DEX V2.
2. Proposal #124 was proposed towards incentivization of Persistence DEX pools with stkXPRT, and PSTAKE rewards for February 2025.

About Persistence One

Persistence One is building the BTCFi Liquidity Hub, enabling fast, near zero-slippage swaps for XPRT, BTC-variants, and BTCfi tokens on Persistence DEX.

BTCFi’s rapid growth has created multiple BTC-related assets, making fragmentation a big challenge. Persistence One will provide a single liquidity hub, simplifying value transfer across the Bitcoin ecosystem.

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