P2P Validator has been supporting the Polkadot network from day one, providing high-quality validation services for DOT nominators. Our developed products allow nominators to easily manage investments and receive a detailed report on their staking income.
We invest in the development of the Polkadot network and see long-term prospects, however, the costs of maintaining the infrastructure and product development are higher than the revenues that the validator currently receives. We have decided to set a commission of 1% starting from 5 September 2022 to remain flexible and provide more sustainable services.
We did not stop the development activity in the Polkadot network and put in more than eight months of hard work for a reduced fee. Here is a list of the most significant achievements that we have released for the Polkadot ecosystem:
Product development inside the ecosystem is an essential element not only to support the Polkadot network but also as a part of the long-term growth of the community and the network value.
We will increase the commission to 1% starting September 5, 2022. There is a lot of work ahead, and we believe that joint efforts will accelerate the evolution of the Polkadot network.
We want to thank all our nominators for their continuous support and for being with us!
Special offer for 20,000+ DOT holders
If you stake 20,000+ DOT, you can benefit from staking with P2P rebalancing service. Our optimized staking strategy provides up to 20% higher rewards than the network average. Our clients currently benefit from a 15% APR vs 13.8% net
P2P plans of further developments
While staying a reliable and affordable validator, P2P team plans to design and release block finalization community exporter to share our findings in tracking validator performance. We are committed to success of the Polkadot Network in the long term and hope that you can embark on this journey with us.
If you would like to know more about our offer for Polkadot please visit: https://p2p.org/networks/polkadot
If you have any questions, feel free to join our Telegram chat, we are always open for communication.
P2P Validator is a world-leading staking provider with the best industry security practices and proven expertise. We provide comprehensive due-diligence of digital assets and offer only high class staking opportunities. At the time of the latest update, more than 1.5 billion USD value is staked with P2P Validator by over 25,000 delegators across 40+ networks.
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<h3></h3><p>At first, Cardano might appear to have a complicated staking system, but in reality it's quite simple. In this article we will begin by outlining Cardano’s staking architecture before moving on to the key factors about validator pools that will affect your Return-on-Assets (ROA). By the end of this article, you will be able to confidently select a validator pool that is the right fit for you. <br></p><h2 id="staking-architecture">Staking Architecture</h2><p>To get a better understanding of the whole staking architecture, let's first start with how rewards are generated. Within each epoch, fees from network operations and new emissions are collected into a fund. Part of these collected assets goes to the Cardano treasury, while the rest is distributed to validators and delegators as a reward for their commitment to securing the network through staking. <br><br>The validator's role is to secure the network. They are responsible for confirming the validity of new blocks of transactions which are then added to the network's ledger. Every time a new block is added to the ledger, validators are rewarded with staking rewards. </p><p>Cardano token holders can earn staking rewards by delegating their ADA assets to one of the many available validator pools. By delegating your ADA to a validator pool, you are providing this validator with your tokens rights to participate in the validation of blocks. Validators will redistribute their earnings to their delegators pro rata to their stake. </p><p>A validator's probability to be allocated a block to produce, depends on a number of factors. <strong>Pool saturation, </strong>which refers to how much stake a particular pool has,<strong> </strong>is the most important factor when it comes to allocation of new blocks. The higher the pool saturation, the higher is the amount staked in the pool. The greater a pool's stake is, the more blocks will be allocated to them. If the pool does not have enough stake to be allocated a new block, it can take as long as 5 or 50 epochs before they will produce a block. <br><br>So what factors are important to take into consideration when selecting the right validator pool? Below we explain the several key factors to take into account.</p><h2 id="important-factors-when-selecting-a-validator-pool"><br>Important factors when selecting a validator pool<br></h2><h3 id="pool-saturation">Pool saturation </h3><p>The Cardano staking architecture was created in a way that pool saturation does not have a significant effect on ROA in the long run. <br><br>Pools with larger stakes will have more blocks allocated to them and therefore will generate more rewards, but they will also have to distribute it amongst more delegated stake. Smaller pools will produce blocks less often, but will generate a high return to their delegators when they do. <br><br>One has to consider their strategy when deciding which pool to select: Whether they would rather choose a pool with high saturation that will produce more blocks and distribute rewards more evenly and frequently, or choose a less saturated pool that will produce fewer blocks but distribute greater rewards when it does. </p><p>However, in order to promote decentralisation, the Cardano protocol has a cap on the amount of rewards a validator's pool can receive. Therefore, if a pool is <em><strong>oversaturated</strong></em>, the rewards received for producing blocks will have to distribute between all the ADA that was delegated to that pool. This leads to lower rewards per each ADA delegation. The current oversaturation limit is 64 million ADA.</p><h3 id="pool-fees-margin"><br>Pool Fees (Margin)</h3><p>Validators may charge a fee (margin) for maintaining its pools, keeping a percentage of all rewards received. The usual margin for public pools is between 1 and 3%, which has a very low impact on rewards. For example, even if you stake 1 million ADA on nodes with 0% and 1% commission (let’s take average nodes with 50% saturation), the difference in rewards between them will be about 5-10 ADA per epoch. <br><br>Do note that validators can set the fee up to 100%, so it is important to check that the commission is not set too high.</p><h3 id="pledge">Pledge</h3><p>A pledge is an amount of assets self-bonded by the validator intended to remain staked to its pool for as long as it operates. It can affect ROA, but only very slightly. Below we will take a look at an example.</p><p>As an illustration, let's look at the change in the possible ROA depending on the pool parameters:</p><p>Let's imagine we have three pools, each with a saturation of 30 million ADA. Each of them has the following pledge values:</p><p>Pool 1 - 10,000 ADA, </p><p>Pool 2 - 100,000 ADA </p><p>Pool 3 - 1,000,000 ADA</p><p>If you were to stake 10 million ADA, you would get the following ROA on each pool:</p><p>Pool 1 - 3.958%</p><p>Pool 2 - 3.960%</p><p>Pool 3 - 3.982%<br></p><p>As we can see, although there is a difference, it is not significant.<br></p><h3 id="luck">Luck </h3><p>Luck reflects the protocol randomness in the allocation of blocks. When a pool gets allocated more blocks to generate than expected, the luck metric is greater than 100%. If a pool gets allocated less blocks than it would be expected then that number is less than 100%.</p><p>Pools experience this metric every epoch regardless of their size and it is completely random, so smaller pools will see swings between 0% and 100% during long streaks, whereas larger pools will see higher returns in the same period. Over a long enough period of time, the expected APY on rewards will average towards the network expected value.</p><p>It's important to keep in mind that block allocation is calculated on the basis of statistics. If a pool has gotten more than it's expected share of blocks in the past, future block allocations will be lower and vice-versa. </p><h2 id="reliability-and-reputation">Reliability and Reputation</h2><p>Since Pool Saturation, Pledge and Luck do not have a significant impact on ROA in the long run on pools with similar fees, the main consideration a delegator needs to have when selecting a validator pool is the validator’s reliability. In case of failures, errors, etc., no blocks will be created and consequently no participant will receive any reward. So when choosing a pool, this decision should be made responsibly to be sure that the infrastructure is maintained without failures. You can analyse validators' historical performances on <a href="https://adapools.org/">explorers.</a></p><p><br>Let's take an example with one of P2P’s pools. Using the following <a href="https://adapools.org/pool/c29c92f8319150962650bc8a5e24d918491e8a7b3ac43525afe76baa">link</a> to the explorer, you can verify the performance and configurations of P2P. You can see that the saturation is less than half, it has a margin of 0%, a pledge of 1M ADA and it has a ROA of around 4-5%.</p><figure class="kg-card kg-image-card"><img src="https://lh6.googleusercontent.com/LpTAxAlKIXJyY-JI_abbpO_Ryo6M6V7qFNqtWhm8R38oGMdFWGWaECyyyAda8xus17qRz2gNsNFqWd3DnSb7RVFYJD9BqKLIwHsnMWlb-wpaKGcn5E8sEd0_DsCA-QfkeEOSQ2siZnDtTORjzn53FXsCYIPyXN0XJTHeWRf0aep6JQhPG4p2m2QmfQ" class="kg-image" alt loading="lazy"></figure><p>Delegating to a public node is not the only way to stake. Many experienced validators, including P2P, provide the option to maintain a whitelabel node for large token holders. Essentially, a team would be responsible for maintaining the node, but it would be managed and owned by the token holder. In other words, a DevOps team would solve all the technical issues, whereas the owner would control the margin, marketing, etc. </p><h2 id="takeaways">Takeaways</h2><p>The Cardano staking architecture was designed in a way to provide all well performing staking pools with similar profitability opportunities, regardless of the size of their stake. Therefore, when selecting a public node, the most important consideration is the fee, the stability and reliability of the validator. Validators with low up time, or in cases where technical failures occur, may miss blocks and as a result delegators will lose out on potential rewards.<br></p><hr><h3 id="about-p2p-validator"><strong>About P2P Validator</strong></h3><p><a href="https://p2p.org/">P2P Validator</a> is a world-leading staking provider with the best industry security practices and proven expertise. We provide comprehensive due-diligence of digital assets and offer only high class staking opportunities. At the time of the latest update, more than 1.5 billion USD value is staked with P2P Validator by over 25,000 delegators across 40+ networks.</p><p><em>If you have any questions, feel free to join our<a href="https://t.me/P2Pstaking"> Telegram chat</a>, we are always open for communication.</em></p>
<p>If you are looking for information about The Merge we've got you covered. Below you can find answers to the most common questions about the upcoming Ethereum upgrade. </p><p></p><h3 id="what-is-ethereum-20">What is Ethereum 2.0?</h3><p>Ethereum 2.0 (ETH2) is a set of upgrades that looks to make Ethereum more scalable, secure and sustainable.</p><h3 id="will-ethereum-be-renamed-after-the-merge">Will Ethereum be renamed after The Merge?</h3><p>No, Ethereum will still be Ethereum and no new cryptocurrencies will be created. The ticker for the Ethereum token will remain the same, ETH.</p><p>This misconception comes from the fact that for a time ETH on the mainnet was referred to as ETH1 and ETH on the Beacon Chain was referred to as ETH2. After The Merge however only ETH will exist.</p><h3 id="what-are-the-major-differences-between-current-ethereum-and-ethereum-20">What are the major differences between current Ethereum and Ethereum 2.0?</h3><p>There are two big changes happening with the introduction of ETH2.</p><p>The first one will be a shift from Proof of work (PoW) to Proof of Stake (PoS). The second one will be the introduction of shard chains. </p><h3 id="what-is-the-difference-between-proof-of-work-pow-and-proof-of-stake-pos">What is the difference between Proof of Work (PoW) and Proof of Stake (PoS)?</h3><p>PoW is a consensus mechanism that relies on computational power and the expenditure of energy to validate transactions on a blockchain. In PoS validators use capital to validate transactions. This not only helps alleviate environmental concerns associated with PoW but also improves security and scalability.</p><h3 id="when-will-eth2-launch">When will ETH2 launch?</h3><p>The ETH2 launch will be segmented into phases. </p><p>The first phase occurred in December 2020 with the launch of the <strong>Beacon Chain</strong>. The launch of the Beacon Chain marked an important milestone in the road to ETH2, introducing PoS to Ethereum.</p><p>The next phase is called <strong>The Merge</strong> and it is scheduled to happen on September 19, 2022. The Merge represents the fusion of the current Ethereum mainnet with the Beacon Chain. This update will replace the current Proof of Work consensus mechanism with Proof of Stake.</p><p><strong>Shard chains</strong> are a scalability mechanism through which the blockchain is divided among many different nodes thus allowing transactions to be processed in parallel instead of consecutively. This helps drastically improve the network amount of transactions per second. This upgrade is currently expected to launch somewhere in 2023 following The Merge. There has been no confirmed date yet but be on the lookout for announcements.</p><h3 id="what-will-happen-to-my-ethereum">What will happen to my Ethereum?</h3><p>You won’t need to do anything with your Ethereum. The Merge was set up to be a seamless transition for the average user.</p><h3 id="what-is-ethereum-expected-staking-apr-after-the-merge">What is Ethereum expected staking APR after The Merge?</h3><p>The current APR before The Merge is around 4%. After The Merge the best estimates place the APR between the range of 7-11%. </p><p>You can find a more comprehensive answer to this question <a href="https://blog.lido.fi/modelling-the-entry-queue-post-merge-an-analysis-of-impacts-on-lidos-socialized-model/">here</a>.</p><h3 id="will-there-be-a-proof-of-work-fork-of-ethereum-after-the-merge-can-i-get-tokens-on-the-new-chain-if-i-stake-them">Will there be a Proof-of-Work fork of Ethereum after The merge? Can I get tokens on the new chain if I stake them?</h3><p>Yes, there most likely will be a fork of Ethereum after The Merge. Staked Ethereum will probably also not be counted towards getting new tokens in the forked chain.</p><p>There are pros in choosing to stake early rather than wait for the fork. As more ETH gets staked the less rewards are available for each validator. Due to the expected increase in staking APR post-merge one can capture this yield by staking early.</p><p>By waiting to stake one can also risk being caught up in the staking queue that can form if a large number of validators are trying to be created at the same time. This can push the current waiting period to start earning rewards, which currently goes up to 7 days, to a 2 to 4 months waiting period. </p><p>The calculation being made here is between the profit earned from the tokens on the new chain versus the loss of staking rewards for 2 to 4 months.</p><h3 id="what-is-the-minimum-amount-of-eth-i-can-stake">What is the minimum amount of ETH I can stake?</h3><p>You don’t need any Ethereum to run a node. However to validate blocks and earn staking rewards you need to stake at least 32 ETH.</p><p>Running a non-block-producing node is still incentivized since it improves network security.</p><h3 id="how-often-are-staking-rewards-distributed">How often are staking rewards distributed? </h3><p>Withdrawals from the Beacon Chain are not enabled so rewards are not being distributed just yet. You can still earn rewards however. </p><h3 id="will-i-be-able-to-earn-mev-rewards-from-staking">Will I be able to earn MEV rewards from staking?</h3><p>Yes, our APR estimates include MEV rewards.</p><h3 id="is-there-a-slashing-risk-for-validators">Is there a slashing risk for Validators?</h3><p>Yes, there is slashing risk to prevent malicious actions on the network.</p><h3 id="do-staking-rewards-compound">Do staking rewards compound?</h3><p>No, staking rewards do not compound because withdrawals from the Beacon Chain will not be enabled just yet.</p><h3 id="will-the-network-experience-any-downtime-during-the-merge">Will the network experience any downtime during The Merge?</h3><p>No, the network will not experience any downtime. The upgrade was designed to cause no disruption to the network.</p><h3 id="will-the-gas-fees-reduce-after-the-merge">Will the gas fees reduce after The Merge?</h3><p>No, The Merge changes the consensus mechanism from PoW to PoS. Gas fees are dictated by the network usage, future updates will look to address gas fees.</p><h3 id="will-transactions-be-faster-after-the-merge">Will transactions be faster after The Merge?</h3><p>It’s very unlikely. The Merge focus is not on scalability, future upgrades to the network will focus on scalability.<br></p><p>If you are interested in staking Ethereum with P2P, please email us at <a href="mailto:[email protected]" rel="noopener noreferrer">[email protected]</a>.</p><hr><p>About P2P Validator</p><p><a href="https://p2p.org/">P2P Validator</a> is a world-leading staking provider with the best industry security practices and proven expertise. We provide comprehensive due-diligence of digital assets and offer only high class staking opportunities. At the time of the latest update, <strong><strong><strong><strong>more than </strong></strong>2.9<strong><strong> billion of USD value is staked with P2P Validator by over 2</strong></strong>5<strong><strong>,000 delegators across 25+ networks.</strong></strong></strong></strong></p><p>Want to stake Ethereum with us? Visit <a href="https://p2p.org/networks/ethereum">p2p.org/networks/ethereum</a> to find out more about Ethereum staking.</p><p>If you have any questions, feel free to join our<a href="https://t.me/P2Pstaking"> Telegram chat</a>, we are always open for communication.</p>