> For the complete documentation index, see [llms.txt](https://docs.phala.world/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.phala.world/introduction/marketplace/delegation-nfts.md).

# Delegation NFTs

### What is Phala’s Delegation NFT?

Phala’s Delegation NFT is a representation of delegated PHA position and the associated withdrawal rights > <https://app.phala.network/>

Whenever you delegate to a stake pool or vault, you will receive a Delegation NFT (built on the RMRK2.0 standard) in return.

<figure><img src="/files/204PKZfS1fBznKYktGDw" alt=""><figcaption></figcaption></figure>

Delegation NFT can be transferred, sold, or traded, all of which transfer control of the delegated PHA tokens and the withdrawal rights.

On-chain, each Delegation NFT contains information such as the owner account, NFT Collection ID, and share.

There are two types of Delegation NFTs:

1. Vault Delegation NFT
2. Stakepool Delegation NFT.

### Why is Phala’s Delegation NFT necessary?

Delegation NFTs serve multiple purposes that benefit both delegators and pool owners.&#x20;

* Firstly, Delegation NFTs add liquidity to delegations through tradable ownership rights. They improve asset utilization efficiency for delegators by enabling them to transfer staked assets easily. Instead of waiting up to 21 days for the withdrawal period, users can simply transfer the NFT to another account.
* Secondly, it streamlines pool owners' management as users can withdraw assets without requiring the delegation to be frequently retrieved. This reduces the effort required to maintain the pool.
* In addition, due to NFTs being a proof of fixed quantity assets, there is also a certain arbitrage space in the fluctuation of NFT prices.
* Lastly, the beautiful art design of the NFTs visually represents on-chain rights.

### **What is the life cycle of a Delegation NFT?**

#### **Generation**

After a user delegates their tokens to a stake pool or a vault, the tokens are transferred and locked. To provide proof of the delegation, a Delegation NFT is generated. The Delegation NFT records the owner, the StakePool where the delegation is located, and the corresponding StakePool's share.

#### **Sales, trades and transfers**

If user Alice sells or transfers the Delegation NFT to user Bob, she will lose the certificate (NFT) to withdraw the delegated PHA from the corresponding StakePool or Vault. Consequently, the delegated PHA will no longer belong to Alice. When a sale, trade or transfer occurs, the NFT in the original owner's account is burned. A new Delegation NFT with the original information is generated in the receiver's account.

The workflow is as follows:

<figure><img src="/files/Kz1d7TxaxhDwBBgPxKAI" alt=""><figcaption></figcaption></figure>

#### **Adding or Withdrawing Delegation**

When users add more PHA tokens to the pool, the original NFT will be burned, and a new NFT will be generated to reflect the updated delegation.

When users withdraw their delegation, the Delegation NFT information will be updated by the contract to reflect the withdrawal.

### **FAQ**

* Can a vault owner transfer the NFTs within their vault pool?

  No, they cannot. The assets represented by these NFTs belong to the delegator, and the owner has no right to transfer them.
* Is it normal for the NFT ID to change after a transfer?

  Yes, it's normal. When an NFT is transferred, the old NFT is burned, and a new NFT is generated in the receiver's account.
* Can I use delegation NFT for governance voting?

  Yes, in the future, you can use the NFT to vote. ➡️ <https://wiki.phala.network/en-us/general/applications/use-delegation-to-vote/>
* Can the delegation be withdrawn when its NFT is listed?

  No. Vice versa, a withdrawing delegation's NFT can not be listed.


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