How to Stake HYPE on Testnet

Step 1: Go to https://app.hyperliquid-testnet.xyz/staking and connect your wallet

Step 2: Transfer HYPE from SPOT to the STAKING account

Step 3: Click on 'Stake' and select the Hyperbeat validator

Step 4: Enter amount of testnet HYPE and click stake

Once you have delegated your Hyperliquid (HYPE), there are things you need to consider going forward.

• Rewards are not auto-compounded. To get the most out of your tokens, you should consider claiming and staking your rewards more frequently, but consider that each transaction will cost you some gas.
• As a participant in the Hyperliquid Ecosystem, once you have staked your tokens, you will be able to vote on Governance Proposals. While your contribution and vote are highly valuable to the ecosystem, participating does not affect the sum of your rewards.
• By delegating to a good long-term oriented validator like HyperBeat, you can reduce most of your maintenance and only have to check back to restake your rewards.

How are the staking rewards generated?

Native staking rewards for HYPE are composed of:

• Block Rewards: HYPE is an inflationary token and staking rewards will come from annual inflation.
• Transaction Fees: Each transaction processed by the network comes with transaction fees. Transaction fees are collected by the network and burned. The Staking APR will vary with network usage. The APR will increase as the network gets more traction and more transactions occur on Hyperliquid.

What are the risks to staking Hyperliquid (HYPE)?

Whilst we want to ensure staking is as safe and transparent as possible, there are still things to consider regarding whether a specific staking option is right for you.

Slashing risk: HYPE delegated to a validator may be partially slashed if the validator engages in misconduct. In addition to being slashed, a validator can be jailed, during which no rewards will be earned. However, HyperBeat operates exclusively on bare-metal servers, ensuring that HyperBeat stakers can stake without concerns about these risks.

Dropping out of the active set: On top of potentially losing out on rewards if your validator gets slashed, a validator could also drop out of the top 50, meaning they no longer earn any rewards. Ensure you check back frequently to ensure your validator is active, not jailed and has not raised their commission fees.

Protocol security risks: There is an inherent risk that the protocol could contain unknown bugs. This not only applies to staking but your HYPE investment in general.

Please note that this is not an exhaustive list of all the risks related to staking.