Xai, a layer-3 Ethereum gaming network built on Arbitrum technology, will launch the first phase of its staking rewards this week following January’s XAI token airdrop, providing stakers rewards while further benefiting early supporters. The rollout is tentatively planned for Tuesday, and here’s a first look at how it will all work.

Initially, Xai Foundation will create staking capabilities for owners of Sentry Keys, the NFT-based nodes that are operated by network supporters. The Foundation has sold nearly 35,000 of the observer nodes thus far, with over 6,300 unique owners, and the Sentry Key operators were the primary beneficiaries of January’s XAI airdrop.

With the launch of staking and the escrowed XAI (esXAI) token, the Xai network will provide further incentives to owners. Each Sentry Key can be paired with up to 25,000 staked esXAI, representing XAI tokens, but an owner of multiple keys could stack that tally—so if your wallet holds five Sentry Keys, you could stake up to 125,000 esXAI.

Xai has also implemented rewards tiers that include a bonus that can determine whether each Sentry Key owner receives boosted esXAI staking rewards.

For example, the Bronze Tier (less than 1,000 staked esXAI) has no multiplier, but the Silver (1,000 to 9,999 esXAI), Gold (10,000 to 99,999 esXAI), Platinum (100,000 to 999,999 esXAI), and Diamond (1 million or more staked esXAI) offer a reward success multiplier that ranges up to 16x. In other words, the more you’ve staked and invested, the better chance you have of receiving boosted rewards at each network “assertion” for the nodes.

What if you don’t own a Sentry Key and/or don’t plan to stake enormous amounts of XAI? In March, the Xai Foundation plans to broaden the scope of staking rewards with pools, and Sentry Key node owners will be able to operate pools that general XAI token holders can stake their esXAI into.

The Xai Foundation is still developing the formula for how staking rewards around the pools will work, and said that it will increase the tier thresholds in March as well based on the results of the initial wave of staking. But the idea is to make staking compelling not only for Sentry Key owners, but also for individual stakers who utilize them.

Going forward, the Xai Foundation sees these pools as a way for Xai games and other projects to find engaged audiences to airdrop NFTs and tokens to, as well as a way for XAI token holders to delegate their governance voting rights to a pool.

The Xai network has numerous games on the horizon, including titles like card battler Final Form and metaverse action game LAMOverse from Ex Populus, the studio that built the Sentry Key software and is collaborating with the Xai Foundation. Additionally, NFT game Crypto Unicorns announced plans to migrate from Polygon to Xai.

The Xai token set an all-time high price of $1.59 on Sunday ahead of the staking launch this week, more than double the initial market price when XAI debuted in January. It’s still near that level at a current price of $1.51 as of this writing, per data from CoinGecko.

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