Polkadot has a staking architecture that encourages its token holders to take significant active participation in the security of the network; a strategy game that requires frequent monitoring and re-configuring of nominators' validator set which is incentivised through financial rewards and penalties. The aim of Polkadot is to obtain a continuously revised optimal selection of validators securing their Network. However, the P2P Polkadot team noticed that many DOT nominators were not receiving consistent daily rewards which raised the question of whether the anticipated behaviour was being achieved. The following research paper is devoted to the analysis of nominators behaviour in the active participation of managing their validator set in the Polkadot network. We hope that this will not only inform nominators on how to best manage their stake, but to provide the Polkadot community with a better understanding of the current state of nominator participation, and how to best manage the expectations moving forwards.
All data used for analysis in the research was obtained from publicly available sources such as MBELT and Subscan.
How does Polkadot Staking work?
Polkadot uses a nominated proof of stake consensus algorithm to achieve consensus in the network.
Token holders can nominate their DOT holdings to validators (node operators) who will earn staking rewards on their behalf and redistribute it daily to their nominators after taking a fee for their service.
Validators go through an election phase at the end of each era (24h) where the top 297 validators (ranked by volume of stake) qualify to be part of the elected set responsible for staking in the subsequent era.
Nominators are given the option to nominate up to 16 validator addresses they trust. At the start of each era, through the use of Sequential Phragmén Method, each nominator's stake is allocated to one elected validator in their selected set. The aim is to evenly distribute the stake amongst validators.
Why should nominators care about updating their validator list?
Regularly updating your validator list has two key benefits; maximising rewards and ensuring the security of funds.
The Polkadot protocol seeks to provide an even rewards distribution among well performing validators. Therefore, a nominator that has their stake allocated to an active validator with a lower amount of stake will receive higher rewards had their stake been allocated to a validator with a greater amount of stake. This is because the same amount of rewards will be distributed to less DOT.
Additionally, only the top 256 nominators (ranked by the volume of their stake) will receive rewards per active validator. Which means nominators, especially ones with lower stakes, should avoid oversubscribed validators. On the other hand, only the top 297 validators (ranked by volume of stake) qualify to be part of the elected set responsible for staking in the subsequent era. It is therefore important for nominators to verify whether their validator set contains some validators that will likely be elected in the next era.
If any of their validators stop behaving accordingly, it is important for nominators to remove them from their list to avoid being slashed. Validators, including their nominators, can be punished financially for compromising the security of the network. This incentivises nominators to only nominate trustworthy validators, which in turn creates a strong set of validators to secure the network.
While it is clear that nominators curating their validator set increases the network performance by ensuring a continuously renewed optimal validator set, it is important to note that the staking architecture should be developed in a way where the cost of researching and updating the validator set is not greater than the rewards earned. The lower the stake of a nominator, the lower the rewards earned for a similar amount of research required. It can therefore be estimated that nominators with lower stake are more likely to inadequately re-configure their validator set.
Investigation into the missed rewards
The aim of this research was to see how often nominators were missing out on rewards. We collected data from all 22500 active nominators on June 20 2022 and summed the number of days that nominators did not receive rewards in the last 30 days. We only included nominators that did not receive rewards for 10 or more days during the month.
There are several reasons why nominators may not receive their rewards:
1. The nominators do not meet the minimum stake requirement of ~120 DOT. The minimum is dynamic and is set based on the top 256 nominators of a validator receiving rewards.
2. Their nominated validator set is being mismanaged by selecting oversubscribed validators in their list or by only having validators that are not elected.
3. Validators did not pay out the rewards by increasing commissions to 100%.
The below graph charts our findings.
A total of 2 166 nominators holding 1 928 751 DOT stake did not receive rewards for 10 or more days. Out of the nominators that we retrieved, 89 had a stake greater than 500 DOT, 2 050 with a stake between 120 (the minimum stake) and 500 DOT, and only 27 with less than 120 DOT.
A total of 2139 out of 22,500 (~10%) nominators with stakes over the minimum requirement (120 DOT) did not receive rewards for 10 or more days of rewards and are currently being left out of at least 1/3 of potential rewards.
Our data points to the fact that there is a clear lack of participation in the management of the selection of validators from retail token holders.
Further research needs to be made to specify whether this lack of participation comes from the insufficient knowledge from individual token holders, or whether the labour required to research and reconfigure validator sets is too large versus the earnings they make from staking. In either case, it is clear that the process needs to be made simpler to retail clients.
While there are significant amounts of educational material out there to guide users on how to manage their stake, the extensiveness of the guides available can be daunting for beginners.
Polkadot.js is arguably the most popular analytical tool provided by the community to help curate a nominators validator set, however it is complex. There needs to be more made available tools (such as yieldscan) that incorporate ease of use and choice given to the nominator.
In the meantime, we have created a list of active and undersubscribed validators to help nominators select a set that will generate daily rewards. You can find it below.
The security of the Polkadot network relies on the active participation of nominators. Our investigation has highlighted that, while Polkadot’s idea to gain an edge in becoming the securest validator is a great concept, the execution hasn't seen the uptake they were hoping for. There is a high % of individual token holders that are currently not receiving daily rewards due to the lack of participation in the relatively complex staking architecture. There are a lot of compelling reasons for nominators to be participating in Polkadot’s architecture but the complexity of the system and the time investment for those with less stake can be off-putting.
As the number of nominators are on the uptrend, it is important for the development of more user-friendly tools to simplify the inclusion and participation of all nominators while still giving them freedom of choice. If Polkadot can find a way to simplify its architecture and invest in more user friendly tools, not only will it attract more retail nominators but also highly likely the uptake of retail nominators consistently updating their validators becomes significantly higher, leading to the selection of a more optimal validator set to secure the network.
About P2P
P2P Staking 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 top-notch staking opportunities. At the time of the latest update, more than 1.5 billion of USD value is staked with P2P Validator by over 25,000 delegators across 25+ networks. We are early DOT investors and the largest validator by staking volume. We are committed to provide long term support for the network.
If you have any questions, feel free to join our Telegram chat, we are always open for communication.
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<p>EIGEN stakedrop claims are open. Season 1 starts with 6.05% of the initial supply ready to claim. Eigen Foundation has already announced the next stakedrop season plans and is considering distributing 8.95% of the initial token supply for ecosystem participation.</p><p>This guide will explain how to participate in the ecosystem and secure EigenDA and other AVS that will soon accept $EIGEN as staking collateral.</p><h1 id="how-to-choose-the-operator-for-eigen">How to choose the operator for $EIGEN</h1><p>While $EIGEN can secure ONLY EigenDA it doesn't matter how many AVS supports your operator (because your $EIGEN stake won't participate in securing other AVS except EigenDA). A few considerations to take into account: </p><ol><li>It's important that the operator plans to onboard more AVS using $EIGEN, which is coming according to EigenLayer announcements. </li><li>you can delegate all your staked assets only to one operator, including restated natively ETH, LST, and $EIGEN. Therefore, if you already opted in for some operator previously, you don't need to do that again; after depositing $EIGEN to the EigenLayer smart contracts, it will be automatically delegated to an operator you have already chosen. </li><li>since you can't choose separate operators for your restaked ETH and $EIGEN, in case you have restaked $ETH it makes sense to opt-in operator best suited both for restaked ETH and restaked $EIGEN</li></ol><h1 id="two-options-if-you-decided-to-stake-with-p2porg">Two options if you decided to stake with P2P.org</h1><p></p><ol><li><a href="https://app.eigenlayer.xyz/operator/0xb585cb192855253d33ddbdac2d20f50085ef8d41?ref=p2p.org">Renzo x P2P.org operator</a> for ONLY $EIGEN restaking. - supports all intersubjective AVSes. It's only EigenDA now, but expecting more in the near future. On top of that, this operator has an additional incentive from our partner <a href="https://app.renzoprotocol.com/portfolio?ref=p2p.org" rel="noreferrer">Renzo</a> - 100 ezPoints for every 100 $EIGEN staked.<br><br>How to restake with P2P x Renzo operator -> <a href="https://p2p.org/economy/eigen-staking-guide-with-p2p/#:~:text=by%2Dstep%20guide-,1.Renzo%20x%20P2P.org,-operator%20for%20ONLY" rel="noreferrer"><strong>step-by-step guide</strong></a><br></li><li><a href="https://app.eigenlayer.xyz/operator/0xdbed88d83176316fc46797b43adee927dc2ff2f5?ref=p2p.org">P2P.org [all AVS]</a> operator for ETH and $EIGEN restaking. It doesn't have a Renzo ezPoints incentive, but supports all AVS securing both your ETH and $EIGEN stake, thus maximizing your farming opportunities. <br><br>How to restake with this operator P2P.org[all AVS] -> <a href="https://p2p.org/economy/eigen-staking-guide-with-p2p/#:~:text=staked%20with%20Renzo.-,2.P2P.org%20%5Ball%20AVS%5D,-operator%20for%20ETH" rel="noreferrer"><strong>step-by-step guide</strong></a></li></ol><h1 id="1renzo-x-p2porg-operator-for-only-eigen-staking-guide">1.Renzo x P2P.org operator for ONLY $EIGEN staking guide</h1><p>We proudly announce that we are partnering with Renzo to provide users with better UX and increase farming opportunities. Renzo makes staking your $EIGEN and giving you ezPoints as incentive while <a href="http://p2p.org/?ref=p2p.org">P2P.org</a> ensures validator infrastructure uptime and manages associated risks of securing EigenDA</p><p>1.Check eligibility & claim $EIGEN <a href="https://claims.eigenfoundation.org/?ref=p2p.org">https://claims.eigenfoundation.org/</a>. You have to connect the wallet and accept the Terms to do that. Note you will need to turn off the VPN to do that.</p><figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2024/05/image.png" class="kg-image" alt loading="lazy" width="2000" height="1150" srcset="https://p2p.org/economy/content/images/size/w600/2024/05/image.png 600w, https://p2p.org/economy/content/images/size/w1000/2024/05/image.png 1000w, https://p2p.org/economy/content/images/size/w1600/2024/05/image.png 1600w, https://p2p.org/economy/content/images/2024/05/image.png 2000w" sizes="(min-width: 720px) 720px"></figure><ol start="2"><li>Go to Renzo dApp and connect wallet <a href="https://app.renzoprotocol.com/portfolio?ref=p2p.org">https://app.renzoprotocol.com/portfolio</a></li></ol><figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2024/05/image-1.png" class="kg-image" alt loading="lazy" width="2000" height="1041" srcset="https://p2p.org/economy/content/images/size/w600/2024/05/image-1.png 600w, https://p2p.org/economy/content/images/size/w1000/2024/05/image-1.png 1000w, https://p2p.org/economy/content/images/size/w1600/2024/05/image-1.png 1600w, https://p2p.org/economy/content/images/2024/05/image-1.png 2000w" sizes="(min-width: 720px) 720px"></figure><ol start="3"><li>Stake your $EIGEN. You will need to sign three txs to do that. </li></ol><figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2024/05/image-2.png" class="kg-image" alt loading="lazy" width="2000" height="1114" srcset="https://p2p.org/economy/content/images/size/w600/2024/05/image-2.png 600w, https://p2p.org/economy/content/images/size/w1000/2024/05/image-2.png 1000w, https://p2p.org/economy/content/images/size/w1600/2024/05/image-2.png 1600w, https://p2p.org/economy/content/images/2024/05/image-2.png 2000w" sizes="(min-width: 720px) 720px"></figure><ol start="4"><li>Receive 100 ezPoints for every 100 $EIGEN staked with Renzo.</li></ol><h1 id="2p2porg-all-avs-operator-for-eth-and-eigen-staking-guide">2.P2P.org [all AVS] operator for ETH and $EIGEN staking guide</h1><p>1.Check eligibility & claim $EIGEN <a href="https://claims.eigenfoundation.org/?ref=p2p.org">https://claims.eigenfoundation.org/</a>. You have to connect the wallet and accept the Terms to do that. Note you will need to turn off VPN to do that.</p><figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2024/05/image.png" class="kg-image" alt loading="lazy" width="2000" height="1150" srcset="https://p2p.org/economy/content/images/size/w600/2024/05/image.png 600w, https://p2p.org/economy/content/images/size/w1000/2024/05/image.png 1000w, https://p2p.org/economy/content/images/size/w1600/2024/05/image.png 1600w, https://p2p.org/economy/content/images/2024/05/image.png 2000w" sizes="(min-width: 720px) 720px"></figure><ol start="2"><li>After you claim tokens visit <a href="https://app.eigenlayer.xyz/restake/EIGEN?ref=p2p.org" rel="noopener noreferrer">https://app.eigenlayer.xyz/restake/EIGEN</a> and enter the amount that you'd like to deposit and push delegate button </li></ol><figure class="kg-card kg-image-card"><img src="https://docs.eigenlayer.xyz/assets/images/stake-eigen-one-0e44816b1ad8ca47935414e9c671bfb4.png" class="kg-image" alt loading="lazy" width="2562" height="1440"></figure><ol start="3"><li>Once the deposit is successful, click on the Delegate button. (If you have restaked ETH and you have already delegated it to an operator, you're done - your EIGEN is automatically delegated to that same operator)</li></ol><figure class="kg-card kg-image-card"><img src="https://docs.eigenlayer.xyz/assets/images/stake-eigen-two-2c6ec74c0ae8b9572b267ae935463ff6.png" class="kg-image" alt loading="lazy" width="2559" height="1438"></figure><ol start="4"><li>Go to P2P.org [all AVS] delegator's page <br><a href="https://app.eigenlayer.xyz/operator/0xdbed88d83176316fc46797b43adee927dc2ff2f5?ref=p2p.org">https://app.eigenlayer.xyz/operator/0xdbed88d83176316fc46797b43adee927dc2ff2f5</a></li><li>Click Delegate to initiate a delegation.</li></ol><figure class="kg-card kg-image-card"><img src="https://p2p.org/economy/content/images/2024/05/image-3.png" class="kg-image" alt loading="lazy" width="2000" height="1167" srcset="https://p2p.org/economy/content/images/size/w600/2024/05/image-3.png 600w, https://p2p.org/economy/content/images/size/w1000/2024/05/image-3.png 1000w, https://p2p.org/economy/content/images/size/w1600/2024/05/image-3.png 1600w, https://p2p.org/economy/content/images/2024/05/image-3.png 2000w" sizes="(min-width: 720px) 720px"></figure><h1 id="stakedrop-eigenlayer-faq">Stakedrop EigenLayer FAQ </h1><figure class="kg-card kg-bookmark-card"><a class="kg-bookmark-container" href="https://docs.eigenfoundation.org/?ref=p2p.org"><div class="kg-bookmark-content"><div class="kg-bookmark-title">Overview | EigenFoundation</div><div class="kg-bookmark-description">What is a stakedrop? An airdrop designed for EIGEN staking. Learn more about staking here.</div><div class="kg-bookmark-metadata"><img class="kg-bookmark-icon" src="https://docs.eigenfoundation.org/img/favicon.ico" alt><span class="kg-bookmark-author">EigenFoundation Logo</span></div></div><div class="kg-bookmark-thumbnail"><img src="https://docs.eigenfoundation.org/img/meta_banner.png" alt></div></a></figure>
<hr><h3 id="a-breakthrough-in-validator-performance-monitoring-for-polkadot-and-kusama-networks">A Breakthrough in Validator Performance Monitoring for Polkadot and Kusama Networks</h3><p><a href="http://p2p.org/?ref=p2p.org">P2P.ORG</a> Validator introduces a Validator Monitoring Service designed to enhance the performance and security of validators within the <a href="https://polkadot.network/?ref=p2p.org" rel="noreferrer">Polkadot</a> and <a href="https://kusama.network/?ref=p2p.org" rel="noreferrer">Kusama</a> networks. This project, supported by the Web 3 Foundation <a href="https://grants.web3.foundation/applications/Validator_Monitoring_Service?ref=p2p.org">grant</a>, showcases our commitment to advancing blockchain technology through strategic innovation.</p><p><strong>What to try?</strong><br><br>Discover our service on our <a href="https://maas.p2p.org/?ref=p2p.org">website</a>, which is accessible via our cloud-based Telegram bot or by cloning our repository for local deployment from our <a href="https://github.com/p2p-org/polkadot_monitoring_service?ref=p2p.org">GitHub</a>. Follow our use <a href="https://p2p.org/economy/validator-monitoring-service-user-guide/">guide</a> to feel our product features. Everything we offer is open-source.</p><figure class="kg-card kg-bookmark-card"><a class="kg-bookmark-container" href="https://p2p.org/economy/validator-monitoring-service-user-guide/"><div class="kg-bookmark-content"><div class="kg-bookmark-title">Validator Monitoring Service User Guide</div><div class="kg-bookmark-description">Welcome to the Validator Monitoring Service User Guide. This comprehensive guide is designed to help you effortlessly set up and navigate through our monitoring service, ensuring you have all the tools and knowledge to monitor your validator’s performance effectively. Find our Monitoring tool by using a tg bot. Telegram bot</div><div class="kg-bookmark-metadata"><img class="kg-bookmark-icon" src="https://p2p.org/economy/content/images/2020/09/favicon.ico" alt><span class="kg-bookmark-author">P2P.org Blog: Insights, Guides, and News</span><span class="kg-bookmark-publisher">Alex Tishin</span></div></div><div class="kg-bookmark-thumbnail"><img src="https://p2p.org/economy/content/images/2024/03/Polkadot-validator.jpg" alt></div></a></figure><h3 id="overview-of-the-validator-monitoring-service"><strong>Overview of the Validator Monitoring Service</strong></h3><p>Our service is meticulously designed to provide real-time data and comprehensive performance analysis of validators, addressing a critical gap in the existing ecosystem. The service stands out with its unique features:</p><ol><li><strong>Real-Time Performance Data:</strong> Offering insights into validators' active participation in consensus and their role in blockchain security.</li><li><strong>Comparative Analysis:</strong> Enabling users to compare performance metrics with other validators.</li><li><strong>Historical Data Access:</strong> Providing up to one month of stored data for in-depth performance analysis.</li></ol><div class="kg-card kg-button-card kg-align-center"><a href="https://maas.p2p.org/?ref=p2p.org" class="kg-btn kg-btn-accent">Try MaaS (Monitoring as a Service) now!</a></div><h3 id="innovative-features-and-customization"><strong>Innovative Features and Customization</strong></h3><p>Our monitoring tool extends beyond traditional data tracking by incorporating a flexible alerting system that can be tailored via a Telegram interface. This customization allows users to define specific alert thresholds, adapting the tool to their operational needs and enhancing responsiveness to network conditions.</p><h3 id="key-benefits-for-the-community"><strong>Key Benefits for the Community</strong></h3><p>Our service is strategically designed to serve multiple stakeholders within the blockchain ecosystem:</p><ul><li><strong>Validator Operators:</strong> This is especially beneficial for small teams and independent validators, aiding in compliance with strict program requirements and enhancing performance.</li><li><strong>Nominators:</strong> Empowers nominators with detailed comparisons, optimizing their decisions in selecting validators.</li><li><strong>Foundation: </strong>Assists in identifying and addressing security vulnerabilities and enhancing network robustness.</li></ul><h3 id="unique-advantages-over-existing-solutions"><strong>Unique Advantages Over Existing Solutions</strong></h3><p>Our service differentiates itself through:</p><ul><li><strong>Ease of Use:</strong> Easy setup with a Telegram bot.</li><li><strong>Extensive Data Collection:</strong> Providing granular data, including participation in consensus, selection as a para-validator, and session-specific metrics.</li><li><strong>Dedicated Support and Maintenance:</strong> It is backed by one of the largest validators in the network, ensuring reliability and ongoing improvements.</li></ul><h3 id="project-details-and-system-workflow"><strong>Project Details and System Workflow</strong></h3><ul><li><strong>Convenient User Interface:</strong> Powered by a Telegram bot for easy dashboard creation and management.</li><li><strong>Efficient Data Collection Process:</strong> Utilizing exporters from the Blockchain for real-time and historical data.</li><li><strong>Comprehensive Metrics:</strong> This covers a wide range of indicators, including general, validator-specific, para-validator points, and finality metrics.</li></ul><p>Available through both cloud-based and self-hosted configurations, our service offers flexibility to accommodate different user preferences and security requirements.</p><h3 id="our-team-and-experience"><strong>Our Team and Experience</strong></h3><p>Led by a team of seasoned professionals, <a href="http://p2p.org/?ref=p2p.org">P2P.ORG</a> Validator brings extensive experience in maintaining validators and developing monitoring tools within the Polkadot and Kusama networks.</p><h3 id="expanding-our-services-validator-operations-and-staking-opportunities"><strong>Expanding Our Services: Validator Operations and Staking Opportunities</strong></h3><p>We also offer comprehensive validator services for the <a href="https://p2p.org/networks/polkadot?ref=p2p.org">Polkadot</a> and <a href="https://p2p.org/networks/kusama?ref=p2p.org">Kusama</a> networks. Stake your DOT with us for a secure and reliable experience. For substantial stakes, especially over 200K DOT, <strong>we provide exclusive benefits and opportunities to maximize returns</strong> while supporting network security.</p><p></p><div class="kg-card kg-button-card kg-align-center"><a href="https://p2p.org/networks/polkadot?ref=p2p.org" class="kg-btn kg-btn-accent">Stake your $DOT</a></div><p></p><h3 id="join-us-in-advancing-blockchain-security-and-performance"><strong>Join Us in Advancing Blockchain Security and Performance</strong></h3><p><a href="http://p2p.org/?ref=p2p.org">P2P.ORG</a> Validator: Enhancing Network Security and Performance through Advanced Monitoring Solutions. We invite you to be part of this innovative journey to uplift the standards of validator performance monitoring in the Polkadot and Kusama networks.</p><hr><h1 id="about-p2p-validator"><strong>About P2P Validator</strong></h1><p><a href="https://p2p.org/?ref=p2p.org">P2P Validator</a> is a world-leading non-custodial staking provider, securing over $2 billion by over 10,000 delegators/nominators across 25+ high-class networks. We have been actively participating in the Polkadot network since the beginning.</p><hr><h1 id="about-web3-foundation"><strong>About</strong> Web3 Foundation</h1><p>Web3 Foundation funds research and development teams building the technology stack of the decentralized web. Ethereum co-founder and former CTO Gavin Wood established it in Zug, Switzerland. Polkadot is the Foundation's flagship project.</p><hr><p><em>Do not hesitate to ask questions in our </em><a href="https://t.me/P2Pstaking?ref=p2p.org"><em>Telegram chat</em></a><em> or contact Alex via</em> <a href="mailto:[email protected]">[email protected]</a><em>. We are always open for communication.</em></p><hr><p><strong>Web:</strong> <a href="https://p2p.org/?ref=p2p.org">https://p2p.org</a></p><p><strong>Stake DOT with us:</strong> <a href="https://p2p.org/polkadot?ref=p2p.org">https://p2p.org/polkadot</a></p><p><strong>Twitter:</strong> <a href="https://twitter.com/p2pvalidator?ref=p2p.org">@p2pvalidator</a></p><p><strong>Telegram:</strong> <a href="https://t.me/P2Pstaking?ref=p2p.org">https://t.me/P2Pstaking</a></p>
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