As a good nominator you should follow some basic principles:
1- Select validators with a reasonable commission.
2- Select trusted validators with good intentions.
3- Select different validators to contribute to the decentralization and security of the Polkadot network.
These are some of the keys to comply with these basic principles.
2.1 Don’t choose validators with 100% commission
Each validator gets an amount of DOT that can vary in each era (it is a random process). The validator takes a% that can go between 0% and 100% of the total of this reward.
Obviously if the validator has a 100% you will not win anything. Simply put, this validator is telling you that it doesn’t want you to vote for it.
They are usually exchange-owned validators that use their users’ DOT to self-vote their own validator node and thus ensure 100% of the reward.
It is a practice where exchange users earn less reward. At the same time it does not favor the decentralization of the network and it is for this reason that it is recommended to staking independently (onchain) from a wallet such as Polkadot.js.
Another type of validator with 100% commission can be from the Web3 Foundation (promoters of the development of Polkadot) or from an investment fund.
So what percentage of commission is reasonable? Well, you shouldn’t vote for any node that charges a commission higher than 5% in the Polkadot network and a maximum of 15% in Kusama.
You can see that some Validators have a commission of 0% or very low. This means that they do not earn anything and they distribute everything to their nominators. This is a common practice among validators to promote their node. But be careful, maintaining a validator requires time and infrastructures that have a cost. For this reason only few validators will keep their node at 0% for long. If you vote for a 0% validator, make sure that the commission does not raise more than 5% later.
2.2 Select Validators with identity
In the Polkadot network, we validators can register our name and contact information through a chain certification method that guarantees our identity.
This makes nodes with “Identity” easily recognizable and therefore reliable.
Other validators prefer to operate anonymously. In the end, this bears a resemblance to any election process for the mayor of a town or the presidency of a country. We will never vote for an anonymous candidate who doesn’t know his electoral program and his intentions, since in the event of a malicious action we won’t be able to know who he is.
It is easy to differentiate an identity validator from an anonymous one.
Validators with identity show a green checkmark or a green chain followed by their name written in capital letters.
2.3 Nominate trusted validators
Nominating means trusting and nominators with identity are generally trusted but it is advisable to do your own research (DYOR).
Pay attention to details such as that their website works correctly, that there is some way to contact them or that they have social networks where they are active and help their community.
Based on our experience as Visionstake validators in the Polkadot ecosystem, we can mention a few trusted validators. Whether for their contributions, developments, proactive attitude to help or educate about this wonderful project, we can say that the following validators are reliable:
2.4 Select validators that have their own stake
Another trust data of a validator can be seen in the “own stake” that acts as a “skin in the game”. If a validator commits a mistake or a malicious act, the network punishes him by removing part of his own stake. The more of its own stake a validator has, the more of its own capital it could lose. Due to this logic, as a validator with my own stake, I will do everything possible to do my job well and not make big mistakes. Some validators only put 1 DOT on their own stake so in case of misuse of their power as a validator they would only lose 1 DOT.
For this reason, it is recommended to select Validators with more than 100 DOT of their own stake.
2.5 Select validators with different identities
If one of the principles of a good nominator is to contribute to decentralization, it is better not to vote for more than one validator with the same identity. If you see someone with more than 5 validators with the same name followed by a number, it means that they are whales and the more active nodes they have, the more control they will have of the network. If nominators only select whales, the network would be put at risk by its high centralization causing the network and its DOT token to lose value.
He thinks that if his datacenter is attacked or suffers a failure, dozens of validators could go offline. When this happens the network protocol slash the nominators and validators. The more validators are offline, the greater the punishment … and this reduces your rewards.
Some of these validator clusters are P2P.ORG, ZUG CAPITAL, RYABINA, POS.DOG, HYPERSPHERE DIGITAL …
In short, don’t select many validators with the same name.
2.6 Avoid validators that have an excessive subscription (Oversubscribed)
You can easily identify these validators as they have a red scale icon next to their name.
The network only allows 256 nominators to nominate the same validator. If “oversubscribed”, only the 256 nominators with the most delegated DOT (ranked by the amount of participation) will receive the rewards.
This is vitally important if your nominator has a stake of between 120 and 300 DOT. If you fall outside the 256 you will not receive a reward in that era.
2.7 Nominate validators who are on the waiting list
Remember that you can vote a maximum of 16 validators. You can easily allocate 8 of your nominations to pending validators.
The validators that need your nomination the most are the validators that are currently on the waiting list. At any time these validators will enter the 300 elected validators for each era and will make you earn more benefits.
This happens because all validators receive roughly the same reward in each era, but then that reward is divided among the nominators for that validator. When they enter they will surely be ranked in the last positions of the table (less total stake compared to the first of the table). So the lower total stake that validator has, the greater benefits you will get since you will have a higher percentage of the total rewards.
2.8 Check the status of your validators periodically
We recommend making a good selection of validators and checking every day that your rewards are arriving correctly. Do not constantly modify the validators if it is not necessary. Remember that the network will charge you a commission every time you issue an operation to add or remove new validators.
Network security is based on the active participation of nominators. Your task as a nominator is to research, select wisely the most appropriate validators at all times, and update your selection of validators whenever necessary.
This work is very important for the proper functioning of the network and that is why it is very well rewarded.
The Polkadot core has an onchain governance system that allows the entire community to vote for proposals, changes or initiatives of the network.
Polkadot and Kusama are evolving networks and some of the parameters mentioned in this guide may change in the future.
Welcome to Polkadot, the internet of blockchains that will change everything!
To consult doubts and receive more detailed information, follow Visionstake on:
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