Tezos Public Baking

Public Baking

Public baking and private baking are the same thing from the perspective of the blockchain. The only difference is that a public baker has announced themselves to the Tezos community and is willing to accept delegations. A private baker is not willing to accept delegations from delegators. A private baker cannot stop these delegations from occuring but a private baker is not expected to pay out rewards to delegators.

What is Delegation?

When you delegate your tez to a baker, your tokens never leave your wallet - you retain full ownership and control. The baker gains increased baking power from your delegated tez and shares the baking rewards with you. On Tezos, bakers are paid directly by the blockchain for themselves as well as for their delegators. Each baker determines their own fee structure and payment policies. We recommend using TezPay payment software to automate reward distribution to delegators.

What is Staking?

With the Adaptive Issuance protocol upgrade, bakers can now accept stakers in addition to delegators. Staking differs from delegation in several important ways:

  • Funds are locked - Staked tez is frozen and cannot be moved. Unstaking takes up to 4 days (3 cycles plus the remainder of the current cycle)
  • Higher rewards - Stakers earn approximately 3x the rewards of delegators due to the additional commitment and risk
  • Slashing risk - Stakers share in slashing penalties proportionally if the baker double bakes or double attests. See Slashing Explained for details
  • Direct protocol payment - Stakers are paid directly by the protocol without baker intervention, unlike delegators who rely on the baker to distribute rewards
  • Greater baking power - Staked tez counts as 1.0 toward the baker’s capacity, while delegated tez counts as ≈0.33

Configuring Staker Acceptance

Bakers control whether and how much external stake they accept via two parameters:

limit_of_staking_over_baking (default: 0, max: 9)

  • Defines how much external stake you accept relative to your own frozen stake
  • Default of 0 means you reject all external stakers
  • Setting to 5 means you accept up to 5x your own frozen stake from stakers
  • Example: If you have 10,000 XTZ frozen stake with limit=5, you can accept up to 50,000 XTZ from stakers

💡 Understanding Capacity Limits

Bakers have two independent capacity limits:

  • Staking limit: Up to 9x your own frozen stake (controlled by limit_of_staking_over_baking)
  • Delegation limit: Up to 9x your own frozen stake (protocol-enforced, always active)

These limits are independent - accepting stakers does not reduce your delegation capacity. A baker with 10,000 XTZ frozen stake could theoretically accept up to 90,000 XTZ in stakers AND 90,000 XTZ in delegations (if both limits are maxed).

edge_of_baking_over_staking (default: 1, range: 0-1)

  • Your fee on staker rewards (similar to a delegation fee)
  • Value of 1 (100%): You keep all staker rewards as fee (stakers receive nothing)
  • Value of 0.1 (10%): You take 10% fee, stakers keep 90% of their proportional rewards
  • Value of 0: No fee, stakers receive their full proportional rewards
  • Public bakers typically set this lower (e.g., 0.05-0.15) to attract stakers

Configure these via TezGov or CLI. Changes take effect after 5 cycles (~5 days).

A public baker has to contact two entities within the Tezos ecosystem to be added to the list of public bakers within each of their ecosystems. The entities in question all have their own methods to determine your public baker details, such as your fee and payment policies, via self-reporting. You will be asked to self-report your details to each of the following entities:

Most wallets and services on Tezos pull their baker information from one of these sources, mostly from TzKT. If you are not listed on TzKT, you will not be listed on most wallets and services on Tezos.

Any questions/comments/concerns? Please contact the Tez Capital team on Discord or Telegram