In the beginning, the main source of rewards will be monetary expansion, but as the reserves are depleted and the number of transactions on the network increases, the plan is to transition to solely relying on charging transaction fees as the source of rewards. Of these rewards, 20% will go to the treasury and the remaining 80% will be distributed to stake pools. Transaction Fees: The set of transactions in a block that was minted during a specific epoch are used to determine the distribution of fee rewards. It’s important to note that the balance will be smaller in each subsequent epoch, so the total block rewards will decrease over time. Of the token emissions, 20% go to the treasury. Native staking rewards for ADA are composed of:īlock Rewards: Each epoch ((currently ~5 days per epoch), a fixed 0.22% of the reserve balance (the difference between the maximum supply and the circulating supply) is used for block rewards and the treasury. This can be another great way to filter for validators that are thinking long-term. Value Add to the Ecosystem: Some providers offer extra services to their delegators, such as tax reporting tools, explorers, etc. Our recommendation is to only pick those with a >=99% Luck rate. Performance: Make sure you pick a validator with the highest possible uptime performance by viewing the validator information on the Validator Dashboard. A validator with a low network share, might not be profitable and hence increases the risk of them discontinuing their services. Delegating to the most popular validators increases centralisation risks within the network as those validators will have more say in governance and a larger share of the blocks. Network Share: You typically don’t want to choose a validator with the highest network share or a validator with a low network share. Validators that are active have a green dot under them. This metric has some limitations as validators can choose to delegate to their own validator from another wallet, which is done to increase the security of their funds.Ĭurrent Status: You can see whether the validator is currently active or not by checking the validator list shown on this page. Validators Self-Staked balance: A provider that has a high amount of staked tokens likely has more incentive to continue operating their services as they have more to lose than those with low self-staked balances. Number of Users: A high number of delegators could indicate positive sentiment towards a validator. This fee level is set by the protocol of the blockchain. This means by choosing a pool with a higher stake, your slice of 340 ADA fees will go lower. Also, note that the minimum fixed ADA staking fee across each Cardano Stake Pool is 340 ADA which will be shared among the delegators of the pool. Keep in mind that validators can adjust their commission rates up or down over time. A high commission rate means your rewards will be lower whilst a low commission rate could mean that the validator is not profitable and could cause issues for them in the future. There are many metrics to consider when selecting a validator to delegate to:Ĭommission Rates: The commission rate a validator charges is the % of your reward that the validator keeps for themselves. Providers that are part of the VPP have a blue checkmark next to their names on our website. You can learn more about the VPP Batch 1 and Batch 2. When we verify providers, we look at their business through a microscope and analyse things such as their security value-adds to the ecosystem and the team. It is essential for users to stake their PoS tokens with a dependable and highly performant validator, which is why we have rolled out our Verified Provider Program in June 2022.
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