How do I choose which Validators to delegate stake to?

There are a number of considerations to make when selecting validators. Prior to Xi’an release in 2023 when Radix will be fully sharded, there are 100 validators who take part in consensus and earn emissions, so we must choose carefully between these validators to delegate our stake. Here’s a guide for some of the considerations to make when selecting validators:

How many?
It is advisable to delegate your stake to a number of different validators. This reduces your risk of missed rewards in the event of a validator going offline or suffering some downtime. A general rule of thumb is to select 5 validators. There are however no limits, so you may choose to stake with more or less.

Decentralisation
In the interest of ensuring that the network is truly decentralised, it is preferable for no single validator to have too much of the total stake. In an ideal world, the top 100 validators would each have 1% of the total stake, so validators who are already above 2% total stake should be avoided.

Security
Similarly to the decentralisation argument above, if one or only a small number of nodes have a considerable amount of stake, this can put the security of the network at risk - for example a malicious actor only would only have to attack a smaller subset of nodes to cause disruption. As above, it is advisable to stake on nodes with less than 2% stake.

Fees
Validator fees are automatically deducted by the protocol and range from 0% - 3% typically. Many validators operate nodes with 0% fees, however it should be considered that in order to operate robust infrastructure with backup nodes, monitoring systems and DDoS protection requires a significant financial outlay and it therefore may be a false economy to stake only to 0% fee validators. Many validators will also not be able to sustain 0% fees indefinitely so the best advice is to contact them to understand what their longer term fee strategy is. (remember it takes ~2 weeks to unstake, so any benefit of 0% fees now could soon be lost if a validator then increases fees to 5% and you need to unstake). Fees also have much less impact on your staking rewards than uptime (see thread here). A general rule of thumb is fees up to around 3% are considered fair.

Uptime
Each validator is required to take part in consensus rounds in order to earn emissions. The number of consensus proposals made are counted along with any proposals that are missed to determine the validator’s uptime. If a validator’s uptime drops to less than 98% in any single epoch, no emissions are earned for that epoch. It is therefore recommended to keep an eye on the uptime metric which is recorded on the official Radix Explorer, or on community tools such as Radixscan and Radix Dashboard. This uptime metric is measured over the last 150 epochs (~4 days) and should be 99.9%+ to ensure consistent high performance.

Geography/Server Provider
Validators are spread throughout the world, the locations and server providers of each can be found using the StakeSafe Validator Dashboard. In the interests of decentralisation, it is advisable to choose validators from under-represented geographies. Furthermore, many validators use cloud providers to host their servers. It is therefore advisable to consider providers who already host a large percentage of Radix validators such as Hetzner and Amazon, in favour of smaller data centres. Otherwise an outage at any one data centre could be very detrimental to the performance and security of the network.

Change Log:
12/09/2022 - removed Radix.earth and added Stakesafe Validator Dashboard

7 Likes

Great article Faraz!

I would like to add that fees don’t really impact APY that much, for example:

The APY for a node with 1% fee and the APY for a node with 3% fee is very close: 11.68% vs 11.44%.

Thus, uptime is more important than fee!

Also, as a TL:DR I would add:

Things to consider to choose a validator node:

  • Total Delegated Stake (less than 1% would be great)
  • Uptime (avoid 98% or lower, prefer 100%)
  • Infrastructure (hardware, backup node, backup internet connection…)
  • Owner reachability and community presence
  • Owner delegation (important for nodes outside the top 100)
  • Geographical location
  • Fees

And a few starting tips:
:white_check_mark: DO your own research on the node runner
:white_check_mark: DO delegate to at least 5 different validators with less than 2% of total network stake
:white_check_mark: DO prefer validators to the bottom of the list
:white_check_mark: DO contact the node runner if you have any questions or doubts

:x: DO NOT blindly stake to the top validators
:x: DO NOT put all your eggs in a basket by delegating to just one node
:x: DO NOT stake your whole balance. You need 0.6 XRD to request an unstake to ONE node.

If you want to read more, check out this article on my wiki!

5 Likes

And due consideration for all validators following the Validator Code of Conduct - Validators - RadixTalk

5 Likes

I suggest new stakers have a look at @minhnn’s from EasyStake validator list, which uses a system based on scores to list validators:

  1. Node Stake Score (30%): the validators which have smaller stake will have higher score, because this will created the balance, and more decentralization.
  2. Combined Stake Score (15%): similar to the above score, but we based on the combined stakes (some operators run 2 or more validators). You could check the combined information at Florian Pieper’s validators.
  3. Owner Stake Score (15%): Owners who stake more on their validators will have higher score.
  4. Uptime Score (30%): This is very important, the higher uptime means delegators will earn more, the epoch will be faster (so more rewards for all delegators of the top 100 list)
  5. Fee Score (10%): the Fee is needed for covering the hosting and operation cost, but if the Fee is too high this will reduce the rewards.

Check EasyStake Validator List here.

3 Likes

This is pretty cool! Nice idea to have a weighted score.

2 Likes

Can we add a ref to the @stakesafebart "Validator dashboard " as a great place to identify server provider :slight_smile:

1 Like

Good idea. @Faraz could update the OP removing Radix.earth which is not updated anymore and adding Stakesafe’s dashboard.

Done! Added Bart’s dashboard, removed radix.earth