Polkadot: Top Five Updates

In the previous articles, we have explained how you can transfer DOT tokens from your exchange account to your Ledger wallet and the necessary steps for staking. In this article, we will explain one of the most important steps for staking – validator selection.

Polkadot allows you to select a max of 16 validators. Choosing a trustworthy and consistent validator is important to receive a reward and to avoid any slashing charges.

Certain factors need to be checked closely before selecting any validator. This will help in maximizing your reward and protecting your funds.

Validator Selection

We recommend you follow the below steps before selecting any validator.

  • Always select more than 1 validator – A user may receive no rewards if they nominate too few validator candidates and none are elected by the system. Therefore, it is recommended to choose many validators (max 16) so that, if one of the validators you nominate gets elected, your bonded stake will be fully distributed to the active validators.
  • Check the authenticity of the validator account – The validator account should have a proper website, email ID, Twitter handle, and other important details. You can get the above-mentioned details just by clicking on their name from the validator list. Another way to filter validators is to enable the only with an identity option before selecting a validator.

Polkadot Network

  • Most profitable option- You can find the most profitable checkbox option in the Target checkbox. Select this checkbox to display the list of most profitable validators currently available and then select your validator from this list.

Polkadot Network

Validator Considerations: Important Things to Review 
  • Commission – Check how much commission the validator is charging. The more the commission is, the less your reward will be. Do not select a validator with 100% commission, otherwise you will not receive any reward.

If you check the below screenshot, some of the validators are charging 100% commission. In those cases, you will not receive any reward if you choose these validators. These validators are keeping all the rewards with themselves.

It may be the case that those validators are staking service providers who already have their own set of the nominator. If that is the case, they keep all the staking rewards from Polkadot and later redistribute it as per their strategy or conditions.

Polkadot Network

 

  • Performance – Check the performance of the validator by clicking on the below-highlighted icon against their name.

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This will open their account activity statistics:

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Check whether the validator performance is following a consistent and stable trend or not. You can check other information like era points, elected stakes, rewards, and slashes from here.

Validator Warnings: What to Watch Out For
  • Oversubscription and slashed – Do not select a validator if you find these following icons beside their name.

Polkadot Network

Only the top 256 nominators for a validator will receive a reward. You may receive less/no reward if you fail to notice the oversubscribed icon beside some of your validators.

As you can see from the below screenshot, these three validators are oversubscribed because they have more than 256 nominators as set by the system.

Polkadot Network

Validators are Slashed if they misbehave (e.g., goes offline, attacks the network, or runs modified software) on the network. As a result, a certain percentage of their bonded/staked tokens will get slashed/deducted as a penalty. If you delegate your tokens to those slashed validators, your funds too will also be slashed.

  • Check validator stake – Check the own stake column that shows the amount of DOT tokens that the validator is staking. The total stake shows the total contribution from all the users who have chosen this validator.
The Nomination Process

To start the nomination process, click on Nominate against your account in the Stashes section.

Users can nominate up to 16 validators. However, you cannot specify the amount that is going to be delegated to the validators. The bonded tokens are distributed according to the Nominated Proof-of-Stake (NPoS) algorithm.

To select validators, search by their name and click on the candidate accounts checkbox.

Polkadot Network

Once you have selected all the desired validator accounts, you can click on Nominate to confirm the process.

Polkadot Network

As you can see from the above screenshot, we have one entry in the Active nomination, and five entries are there in the waiting nomination.

Active or inactive nomination means that your nominated validators have been elected to be in the validator set, whereas waiting means they have not yet been elected.

If you have more than one entry in the Active nomination, then that means that many validators are elected to be in the active validator set. Out of those entries, you will only have a single validator as Active, while the rest remain as Inactive.  This also means that you are directly supporting the validator with your stake and will potentially be receiving staking rewards.

Conclusion

Cold storage is the best option to keep your hard-earned assets safe. It is always recommended to keep unused assets in a hardware wallet rather than on an exchange or wallet. However, when this Ledger staking facility was not available, the usage of the hardware device was only limited to being a safeguard when storing various digital assets.

Staking via Ledger opens a new way of passive income securely as users can now stake assets directly. This hardware is useful for everyone and mainly suited for traders who hold higher quantities of digital assets. They can then stake their assets, which were lying unused on their Ledger, protected by guaranteed asset security.

 

Resources: Polkadot Wiki

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