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Every staking guide mentions, that “it is important to do your own research before staking and to keep monitoring your stakes”. But how to do this research, especially with limited crypto experience? Let’s go through the basics and try to understand how to choose your Autonity validator.
Check if the validator is in the active set
In our experience, users sometimes delegate tokens to an inactive validator. Obviously, such an investment brings little benefit. Therefore, carefully check the validator’s status before making a delegation.
The “Active” label indicates that the validator is part of the consensus committee, signs blocks, and receives rewards for it.
Other labels in the Autonity network include:
Active candidate: The validator meets all preliminary requirements to enter the active set but is not currently part of it, likely due to insufficient total stake. It will be selected into the active set once all requirements are met.
Paused: The validator has voluntarily halted its operations and, consequently, is not receiving rewards. However, there is no automatic unbonding of delegated funds.
Jailed: The validator has been removed from the consensus committee or active candidates pool for protocol consensus violations. It no longer signs blocks and, consequently, does not receive rewards.
Check if the validator has revealed their identity
When delegating your funds, transparency matters. Validators who reveal their identity are generally more trustworthy.
If a validator has filled out their identity, you can see their name and description on our Stakeflow Explorer. Additionally, validators often provide links to their websites and social media for further verification.
Consider Validator Commissions Carefully
Be mindful that validators can take a share of staking rewards as a commission.
Validators with a 100% commission keep all rewards, potentially showing a lack of interest in delegators. It’s advisable to avoid staking with such validators.
Additionally, be careful when staking with validators offering a 0% commission. Check that they maintain a robust server infrastructure and do not cut costs in all possible ways. While practical verification can be challenging, choosing a validator with a non-zero commission is a safer choice.
You can find commission details in the “Fee” column on our Stakeflow Explorer.
See how much “skin in the game” the validator has
Autonity’s economic model and Penalty-Absorbing Stake mechanism imply that a validator has “skin in the game.” The Self-Bonded Stake parameter indicates how much of their own funds the validator delegates to themselves. In case of protocol violations, the Self-Bonded Stake will be the first to be slashed, encouraging validators to act responsibly.
When choosing a validator, look at the ratio of Total Stake to Self-Bonded Stake. This information indicates how much the validator is risking their own funds rather than relying solely on delegator funds.
While a validator’s team can delegate from other addresses, the Autonity network’s economic model favours doing so through a self-bonded stake, signalling transparency and reliability.
Pay attention to the total slashed rate
Delegating your funds to one or more validators carries certain risks. If a validator violates the consensus rules or engages in malicious activity, penalties are imposed through slashing. Slashing deducts a portion of the stake, serving as a penalty. Furthermore, part of this amount of slashed tokens goes to the protocol and part to reward honest validators.
While Autonity’s Penalty-Absorbing Stake mechanism helps mitigate risk by prioritising the slashing of self-bonded stakes over delegated stakes, it doesn’t completely protect delegators. If the self-bonded stake isn’t enough to cover the slashed amount, delegates will lose some of their funds.
Stakeflow Explorer allows you to track the total slashed amount for each validator and the frequency of penalties imposed, providing valuable information when selecting a reliable and trustworthy validator.
Don’t stake to the very top validators (a.k.a superminority)
Superminority is a group of validators who own 33,4% of the total stake. The compromise of a superminority would affect the blockchain’s real-time ability to guarantee that new blocks are voted on and added to the chain. This situation is known as blockchain censorship, because the superminority can, for instance, stop the entire blockchain from accepting one type of transactions and do not hinder from accepting another. It’s clear that the superminority will exist anyway (some group of validators will always have 33,4% of the total stake), the point is how big that group is. The more members there are in the supermajority, the harder it is for them to collude. That’s why it’s important to choose a validator who isn’t part of the superminority when making a delegation. This will have a positive effect on the decentralisation of the network and increase the security of the blockchain in the long run. With our Stakeflow Explorer, you can browse the cumulative stake of the validators and clearly identify the superminority group.
Pay attention to the validator’s uptime
In EVM-based networks, a validator’s uptime is critical. The lower the uptime, the fewer block rewards a validator receives, resulting in fewer staking rewards for delegators. Delegating to a validator with 0% commission and 95% uptime is economically equivalent to delegating to a validator with 5% commission and 100% uptime. High uptime reflects the technical proficiency of the validator’s team and the reliability of their server infrastructure.
Pay attention to the number of delegators
The number of delegators is a valuable metric that indicates the level of trust a validator has gained from users delegating their assets. By examining the average delegation size (total stake/number of delegators), one can estimate whether a validator relies on attracting individual users or perhaps focuses more on large institutional delegators such as liquid staking providers. In addition, significant delegations from development teams and their partners can indicate a validator’s significant contribution to the development of the ecosystem.
Stake widely to many validators
To diversify your risks, choose more than one validator for staking. Mathematically, this reduces the likelihood of losing funds due to slashing, as the probability of both your validators being slashed is extremely low.
Stake across a range of geographies
If possible, choose validators with servers in different regions for added resilience. This will help avoid losses due to unforeseen circ*mstances affecting an entire region and potentially disrupting the validator’s operation.
Get some background details
Validators often contribute to the community by providing educational materials, endpoints, various services, etc. This reflects their commitment to the project and the community and shows serious intent. The presence of such contributions can be an additional criterion for validator selection.
For instance, Stakeflow Validator provides a user-friendly Stakeflow Explorer. If you appreciate our work and want to show your support, consider delegating to one of our validators, including in the Picadily testnet.
Good luck and happy staking!
