Staking (Bonding)

Staking in the context of validators within a decentralized exchange (DEX) like the Portal Network serves several key purposes such as below.

Security and Trust: Staking acts as a mechanism to ensure the integrity and reliability of the validators. Validators are required to lock up a certain amount of $XPORT as a form of collateral. This staking requirement discourages malicious or negligent behavior since validators stand to lose their stake if they act against the network's rules or fail to perform their duties effectively.

Network Participation Incentives: Validators are incentivized to participate actively and honestly in the network's processes, such as validating transactions or swaps, through staking. They often receive rewards in the form of transaction fees or newly minted tokens, proportional to their stake at the end of the epoch. This incentive structure encourages Validators to remain online, act in the best interest of the network, and contribute to its overall health and efficiency.

Decentralization and Fairness: By allowing various participants to become Validators through staking, the system can promote a more decentralized model of governance. It ensures that no single entity has overarching control over the network, contributing to a fair and distributed system.