Tezos Delegation Service – Announcement #1

Dear Delegators,

First of all, we’d like to thank you for your trust. As many of you might have noticed, we will soon reach the level of overdelegation (tzscan.io). Given the comparatively large amount of delegations to us, even the 6 month ramp-up phase of the bond requirement does not help us much. We would like to emphasize that the current state of the Tezos network does neither give us the possibility to directly decline delegations nor to send direct messages to delegators.

Without ramping up our bond, we will reach the level of overdelegation within cycle 15,

and this means that the according rewards will not be generated according to the full amount of XTZ delegated to us. As already stated various times, we will NOT dilute late-comers at the expense of early-comers, meaning that we will pay (currently we target quarterly, we do work on a more frequent pay-out schedule, possibly on a per cycle basis) on a first-come first-serve basis.

Please be aware that rewards are dependent on various factors such as: 

  • Standard reward predictions (e.g. as shown under tzscan “Rewards” tab) based on baking rights given the amount of XTZ delegated to us, including our account (= staking balance)
  • External factors such as the actual baking moving from baker prio 0 to baker prio 1 (things we cannot control and which may decrease endorsement rewards)
  • Internal IT issues (e.g. being offline for a while)
  • Overdelegation

We are aware that various delegation services offer so-called “investment” opportunities: Instead of simply delegating (keeping full control of your XTZ at all times), you principally transfer your XTZ to the delegation service for higher rewards (e.g. zero fee), which requires a high level of trust as the delegation service obtains full control of your XTZ. Given our jurisdiction – Switzerland – we consider it as problematic to accept XTZ “investments” collected from the public. We are currently in touch with Swiss regulators, but as we see it, collecting XTZ from the public might require some sort of banking license, which we don’t plan to obtain. We might accept larger amounts of XTZ on a bilateral basis (we are working on it), but even then we have to comply with highest standards (KYC, AML, bilateral agreement etc.) which takes some time. We strongly believe that we will NOT succeed in receiving the necessary amount of XTZ in time to ramp up our bond. We believe in Tezos and we want to contribute to the Tezos network on a long-term basis and plan to continue our delegation service, however, currently – with much regret – and at least for the time we stay in overdelegation mode,

we need to ask the late-comers delegators to leave our delegation service.

Please be aware that Tezos will be an ever changing network and a lot of current characteristics might change in the future. We hope that we can continue to provide our services to Tezos and its community but currently we have no other choice than being as honest and transparent as possible, even if this is contrary to what we would like to do (i.e. baking for all delegators and paying full rewards). 

We are deeply sorry for any inconvenience caused and once more we’d like to emphasize that we will do our utmost to serve the Tezos community on a long-term basis.

Kindest regards

The AirBie Team