The WAX Governance system is key for WAX to function properly and to have a healthy ecosystem. The WAXP token holders are collectively in charge of electing the guilds that validate and secure the WAX Blockchain. The voting process by token holders is key in any DAO or decentralized system. The elected WAX Guilds are running the DAO of WAX, and you as a token holder are the one in charge of electing responsible and value adding teams.
Now, this process is not easy, who should you vote for? what are they doing? how are they doing it? are the teams adding value? are they actively working to create a stronger WAX ecosystem?
These questions are highly important, and not a simple task that any one person can be expected to do on their sparetime. For this reason the WAX ecosystem has 2 powerful tools. One is the Office of Inspector Generals, which job is to evaluate and overlook all guild activity. Something you can read more about in an earlier lesson. The second system is a proxy vote system.
The proxy vote system is a way for you to delegate the voting power of your WAXP tokens to one entity, and that entity in return is responsible to direct those votes in accordance to their set of values. This is for most people a way easier way to vote for the best guilds, as they can choose to proxy their votes through one of the few proxies that has values they support.
Running a proxy provides no financial incentiment or benefit for the proxy owner, but rather it's their way of helping to add value to the ecosystem by doing what they do best, keeping on top of the guilds and making sure they do as they should.
To review the proxies, you can look at eosaloha's tool - https://www.alohaeos.com/vote/proxy/waxmain
I personally run the WAX Community proxy, which focus on voting on technically strong teams and those that provide the most value to the WAX ecosystem. The tech aspect is to ensure that we have the capabilities required in case any attacks or issues emerge on WAX, and the second aspect is obvious. Without guilds adding value to WAX, they shouldn't be paid by the network for their work.
Outside of my own proxy, I can recommend you looking at kaefergeneral or bigmikeproxy, as these are run by 2 people that has been supporting WAX from the beginning.
How do you vote with your WAXP?
Step 1 is ofcourse to get an account on WAX, and for that account you also need to load it with WAXP tokens. Once that is done, you need to stake your WAXP, if you do this for CPU or NET doesn't matter for your vote weight. But most likely you will use more CPU than NET, so stake majority of your WAXP to CPU!
1) Create an account - Walkthrough of Cloud Wallet
2) Acquire WAXP - How to Buy WAXP
3) Stake your WAXP - What is CPU and NET - Unstaking takes 72 hours
Once these 3 steps are done, you are now ready to vote.
If you want to get staking rewards for your voting, you will have to vote for at least 16 guilds OR vote through a proxy.
As I mentioned above, I recommend that you vote through a proxy, as that will require less effort from your side. Make sure you trust the judgement of the person running the proxy, as they vote for teams for you.
- Worth noting, by voting, you don't risk anything, all tokens are in your account, you simply vote, and the weight your vote has is the amount of tokens you have.
You can vote through a proxy here: https://wax.bloks.io/vote/proxies?name=waxcommunity
Or select guilds yourself: https://wax.bloks.io/vote
After you have voted, your rewards will increase daily until you claim it. That means if you claim once per day, or once per week, it won't matter. However, it's a catch.. because if you don't do anything for to long, the amount of reward you get is reduced.. Let's dig into why.
The weight of your vote will decay over time.
This is a feature created to encourage activity in the governance system. But don't worry, it's not as bad as it sounds. All you need to do is to refresh your votes every so often. Each week the strength your votes has will decline, which in return will redue your rewards ever so slightly. That means if you just vote once, and don't do anything for a long period, you will get less and less rewards.
You can easily see your vote strength (vote weight) in your account information directly on bloks. Just head over to https://wax.bloks.io/, search for your account, and go down to chain data, and click on "votes (proxying)"
Your vote weight is refreshed by 2 types of actions. - well, 3, kinda
1) Stake more WAXP
This actually refresh your vote strength and push it to 100% again.
2) Refresh your vote
Just by voting once again, your vote strength will recover to 100% again. You can vote for the same proxy, or a different one, doesn't matter. It's the vote action that does this.
3) By Claiming your rewards
Claiming actually refreshes your votes, this is the most convenient way of refreshing your votes.
By claiming your rewards, you get 2 type of rewards, 1 is the voter rewards, and the 2nd is the genesis rewards. The genesis reward is a temporary extra reward for the first 3 years of the WAX Blockchain. And runs out by July 2022.
The claim function actually give you genesis tokens. These come to your account as more staked tokens, and remain as "genesis" tokens until you unstake them. These genesis tokens then add further rewards until that program has ended.
Since you gain staked tokens, it is the same as if you stake more WAXP, and thereby you actually refresh your votes by claiming.
Claiming your Rewards!
Let's dig into the part most of you are waiting for. How do you claim rewards? You can do this on majority of the different block explorers, or directly inside the cloud wallet under Staking Rewards. In the cloud wallet, be aware of the big "stake all" button, it's easy to accidently hit that, and that would stake all your liquid WAXP, which takes 72 hours to unstake. Not fun if you are planning to use them in the coming day(s).
Claim on bloks - https://wax.bloks.io/wallet/gbm-rewards
Claim in Cloud wallet - https://wallet.wax.io/staking-rewards
You are able to claim rewards 24h after the first time you vote.
Summary
The vote reward system is to encourage participating in the WAX Governance system. It helps to educate users as well as adding a level of security by a higher vote count. The best way to vote for majority of users is through a proxy.
To participate in the reward system, all you need to do is:
1) Create a WAX account
2) Get WAXP tokens to your account, and stake them
3) Vote through a proxy, e.g. The WAX Community Proxy
4) Wait 24h, and then start to claim your rewards daily, weekly or monthly.
Worth noting is that unstake takes 72h, so plan ahead.