It is essential for users to stake their PoS tokens with dependable and highly performant validators, which is why we have rolled out our Staking Rewards Verified Staking Provider (VSP) Program in June 2022. Through this program, we thoroughly scrutinize potential validators, evaluating factors such as security measures, their on-chain reliability, their provider setup, and value-added services for the whole ecosystem.
Our VSP documentation contains further details about the program, Staking Providers that are part of the VSP will have a blue checkmark displayed next to their names here.
When choosing a validator to delegate to, there are numerous factors to take into account:
Commission Rates: When staking your tokens with a validator, the commission rate represents the percentage of your rewards that the validator will retain for themselves. The minimum delegation fee rate is 2% on the Avalanche Mainnet. A high commission rate can result in lower returns for you, while a low commission rate may lead to financial difficulties for the validator in the future. It’s important to note that validators may change their commission rates at any time.
Number of Users: A large number of delegators may signal a positive reputation for a validator.
Validators Self-Staked balance: Validators with significant amounts of self-staked tokens may have a greater motivation to maintain their operations, as they have more at risk than those with lower self-staked balances. However, it’s important to keep in mind that this metric has some limitations, as validators can choose to delegate their own tokens to another validator, which is done to enhance the security of their funds.
Current Status: You can see whether the validator is currently active or not by checking the validator list shown on this page. Validators that are active have a green dot under them.
Network Share: When selecting a validator to delegate to, it’s generally advisable to avoid choosing one with the highest or lowest network share. Delegating to the most popular validators can increase the risk of centralization within the network as they will have more influence in governance and a greater share of blocks. On the other hand, choosing a validator with a low network share may be less profitable and increases the risk of them ceasing their operations. Finding the balance and choosing a validator with a moderate network share could be the best approach to keep the balance in decentralization and profitability.
Performance: Make sure you pick a validator with the highest possible uptime performance by viewing the validator information on the Validator Dashboard. A validator will receive a staking reward if they are online and response for more than 80% of their validation period, as measured by a majority of validators, weighted by stake. Our recommendation is to only pick those with a >=99% Response rate.
Stake Duration: The lock-up period for validators is between 14 and 465 days. You can choose one that you like based on the duration left for the validator on the Validator Dashboard.
Value Add to the Ecosystem: Another way to assess the long-term vision of validators is to check if they offer additional services to their delegators, such as tax reporting tools, explorers, etc. This can be a useful filter when comparing different providers.
