How to stake PCX - Polkadot Parachain ChainX earning 72% APR

Introduction

As electricity prices where I live are about $0.27/kwh, which is not profitable on any level, I had to look towards other options. One of them is collocating a Bitmain K5 in China (yes, not my best investment but hey, it’s profitable). The only other currently is staking, of which I chose to start with the ChainX project.

Below I will briefly explain what ChainX is, why I chose to invest in it, what its rewards are and why I spent weeks of time learning about its node system, linux servers, python and node.js.

What is ChainX?

I highly advise you to read the whitepaper to fully understand, but I’ll try to give a small summary below.

ChainX is a community-driven project built on the next-generation blockchain framework substrate, the largest Layer-2 network of Bitcoin using the Light-client protocol with smart contract support, will evolve into the Polkadot network as a secondary relay chain in the future.

Its economic system is similar to bitcoin, where it’s total amount will be capped at 21 million and it’s reward halved every 2 years. Mining is done by Asset (BTC ETH FIL etc.*) and PCX staking.

ChainX adopted the light client inter-chain technology. Asset crossing chains is a process in which a user locks the asset in the original chain, maps asset onto the target chain where withdrawal is available, and finally unlocks the asset in the original chain.

Assets do not disappear in the original chain, but instead are transferred to the decentralized trust of Light Node Protocol, or to a centralized trust managed by an individual or individuals.

*:Currently only BTC is mapped, Filecoin is currently being worked on.

Why stake PCX?

I won’t bore you further with why it’s going to moon or why I think the project is amazing. Instead, I’m going to give you some numbers:

At the time of writing: 1 BTC = $10.000 | 1 PCX = $1,00 | 10000 PCX earns 15 PCX p/day | 1 X-BTC earns 0.640 PCX p/day | 1 L-BTC earns 0.081 PCX p/day

These ratios apply to any amount of assets, i.e. 100 PCX earns 0.15 PCX /day.

To make things easy we need to calculate an APR for each. We’re going to assume you restake your gained PCX daily. For easy comparison we use an amount of 10000 PCX, which roughly equals $10k.

  • 1 X-BTC nets you 317.45 PCX in a year = $412, meaning an APR of 4,12 %
  • 1 L-BTC nets you 40.17 PCX in a year = $52.23, meaning an APR of 0.52 %
  • 10k PCX nets you 7282 PCX in a year = $7282, meaning an APR of 72.82 %

These are rough estimates, but it gives a good comparison and gives us an estimation of its profitability. Subsequently, I chose to stake PCX over depositing or locking BTC.

How to stake

Staking PCX is done through a signer + DApp combo, which can be found here: https://dapps.chainx.org/
You can change the language in the bottom right.

1. Download the Signer

In the top right, download the signer and install it on your desktop.

2. Make a Wallet

Open and click on New Account. Save your Mnemonic and choose a name and password.

3. Sync the signer with the Dapps

Got back to https://dapps.chainx.org/ and sync your signer as show in the picture below.

4. Vote on a Node

After depositing PCX from your exchange of choice navigate to “Staking” and find the node with the red panda called ExxiBox. Click on Vote and delegate your PCX (Leave about 0.01 PCX for transaction fees).
Use your signer to ‘sign’ the transaction with your password. There’s no difference in rewards between nodes and the PCX remains in your possession, but it does give me a little kickback if you decide to delegate your PCX to me.


Note: Memo is a message you can add to the transaction, feel free to add anything or leave it blank.

5. Claim your interest

Your interest can be collected in the top right, using the ‘claim’ button. I suggest you claim and restake this daily for compound interest, but that’s completely up to you.

That’s it, welcome to ChainX!

How to mine with X-BTC and L-BTC

This is something more complicated and not as rewarding as staking PCX directly, as described above, but some people might prefer keeping their BTC instead of PCX. For them there are 2 options.

  • X-BTC : At the ratio of 1 X-BTC equals 400 PCX
  • L-BTC : At the ratio of 1 L-BTC equals 20 PCX

X-BTC is the on-chain equivalent of BTC. One deposits BTC to the chain using an OP_RETURN within the transaction. This requires a wallet with said functionality, such as MathWallet, Trezor or BitX. Mathwallet has created a dapp which makes the process easier and is therefore recommended.

L-BTC is ‘Locked BTC’ and is BTC you put into a wallet of your own that you link with your PCX wallet. Meaning, your BTC is in your control, whereas with X-BTC it is on the chain and needs to be ‘withdrawn’ (which can take up to 24h).

I will be adding a small tutorial on how to use Mathwallet for depositing and locking BTC at a later date.

These assets will both be added to your wallet and give you ‘mining power’. This allows you to get ~0.640 and ~0.081 PCX/day respectively for 1 X- and L-BTC. Simply put this means getting interest over your funds. The nitty gritty of ‘PCX mining’ is explained in the whitepaper linked at the end of this post.

Alternatives

There’s a desktop wallet you can use instead, though it’s no longer being developed. The team prefers the signer/dapp combo or the chrome extension.

Desktop wallet: https://github.com/chainx-org/chainx-wallet/releases

MathWallet also has ways of staking and claiming interest for you mobile users. Note though that you’ll likely need the nightly build for iPhones. I’m an android user myself so check with them in their Telegram group.

Available Exchanges

Taken from CoinGecko there’s three exchanges that support PCX currently.

HotBit, BigOne and MXC (taken from https://www.coingecko.com/nl/coins/chainx#markets)

They are pretty much the same so pick the one you like most. The only difference is MXC having only PCX/USDT.

Additional Info

4 Likes

reserved for later purposes

Also reserved for later purposes

Thanks! I was a bit lost at the math part where you calculated the 72% pa, is that if you compound it daily, or stake it and leave it for a year?

That is if you compound daily. For the X- and L-BTC calculation you’re supposed to leave it sitting, but stake the generated PCX daily

good read looking into this now thanks

1 Like

How is the APR so huge? What are the risks with this?

Risks are the same with any other coin. Lack of interest, dev team failing, price plummeting.

APR is pretty high because it’s the early days. BTC had huge APR in its first 4 years too (same economic model). As the block reward gets halved every 2 years the APR will go down

Thanks for the detailed how-to walk-through. Worked a charm; staked!

1 Like