Leasing is a trustless process in which the user (leaser) delegates a choosen amount of LTO towards a block producer by creating a special type of transaction on the LTO network known as a 'lease' transaction (type 8). The lease can be canceled at anytime by the leaser without the consent of the block producer, resulting in the LTO become 'unlocked' and available for instant use again.
By leasing your LTO tokens towards a block producer like us, you essentially earn interest on it like putting monies in a bank. However, the interest that is earned involves luck and thus will vary. The larger the amount that is pooled together, the higher the odds are of winning; think of a lottery. However, it is important to understand the reward of each block that is produced can vary greatly. While some blocks may only consist of a small award, say 1.25 LTO, other blocks can consist of say 60.00 LTO! While this is a rare occasion, it should not be dismissed!
To get started, following our guide.
Every block that is generated by LTO Services is recorded and can be viewed here. Once the 90 minute verification window has passed(as defined by the network specifications), the block will be marked as verified to ensure it is not an orphan block. The block reward is calculated based on the following formula that is taken from the LTO core concensus:
blockReward = (currentBlockFee * 0.4) + (prevBlockFee * 0.6)
The process of calculating the earned reward for each lease per block involves taking all leases whom have been active before the block in question and calculating their earned share based on the following formula, which is rounded down:
leaseShare = leaseAmount / sum(leaseAmount)
This ratio is multiplied by the block reward and a 3% service fee is taken from this amount, rounding down. This leaves us with the earned share per lease of the block in question, which can be viewed here.
leaseReward = (leaseShare * blockReward) - ((leaseShare * blockReward) * (3 / 100))
Payouts are handled automatically by LTO Services every 24 hours and will only be executed if the sum of all unpaid block rewards is equal or greater than the set minimum total payout limit of 100.00 LTO. Once this limit has been reached, payouts will be broadcasted to the LTO Network in form of a mass transaction and can be expected to be received nearly instantly to your lease address. The fee for the mass transaction is currently covered by LTO Services and is calculated using the following formula:
massTxFee = 1.00 + (0.10 * n of transactions)
Please note that he minimum payout limit may be altered in order to reflect the current LTO network node environment in order to achieve minimum fees on mass transactions. The current unpaid pool sum is located in the top-right corner of the website, highlighted in light. Upon payouts, an automated tweet is posted on our Twitter account @ltoservice.
You may cancel your lease at anytime on your own terms, without prior notice. During the leasing process, the allocated amount will always remain in the official wallet and under the direct control of the leaser. To end a lease, login into the official LTO web wallet; navigate to 'Leases'; and click 'Cancel lease' on the lease you wish to cancel.