Nominator · Polkadot Wiki (2024)

If you landed on this page, you decided to understand how you can be a good nominator. Note, thispage is not for nomination pool members, although pool members mightgain essential knowledge about how to choose nomination pools.

The information provided on this page is complementary to that on theStaking Page and Advanced Staking Page.Make sure you read those pages as well before nominating.

Who are Nominators?​

Nominators are one type of participant in the staking subsystem ofPolkadot. They appoint their stake to thevalidators, the second type of participant. By appointing their stake, they can elect the active setof validators and share in the rewards that are paid out.

While the validators are activeparticipants in the network that engage in the block production and finality mechanisms, nominatorstake a slightly more passive role. Being a nominator does not require running a node of your own orworrying about online uptime. However, a good nominator performs due diligence on the validatorsthat they elect. When looking for validators to nominate, a nominator should pay attention to theirown reward percentage for nominating a specific validator - as well as the risk that they bear ofbeing slashed if the validator gets slashed.

Why Nominate?​

• You become part of the Polkadot movement, agroup of diverse professionals and enthusiasts around the world aspiring to build and foster thenext-gen Internet, Web3: a decentralized, privacy-focused, and trustless internet.
• You are an essential piece of the puzzle, keepingPolkadot secure. The bonded balance can beused to vote in Polkadot OpenGov and shape the future direction ofPolkadot.
• You will start to understand how Polkadotworks at a technical-level. When you feel comfortable with your nomination skills and knowledge,you can open your nomination pool, help others secure the networkand earn rewards, and build your reputation as a trusted nomination pool operator. If you like tobe more involved, the next step is to become a validator.
• By getting staking rewards you keep up with or (likely) stay ahead ofPolkadot inflation.

Nominators secure the Relay Chain by staking DOTand nominating validators. You may have an account withDOT and want to earn freshDOT. You could do so as a validator, whichrequires experience setting up a node and running and maintaining it 24/7.

On Polkadot you can also earnDOT by nominating one or more validators. Doingso makes you a nominator for the validator(s) you chose. Pick your validators carefully - if they donot behave properly, they will get slashed, and you will loseDOT. However, if they follow the network rules,you can share the staking rewards they generate.

While your DOT are staked for nominations, theyare 'locked' (bonded). You canstop nominating at any time, but remember that theaction is effective in the next era and does not automatically unbond your funds. Unbonding is aseparate action, and it takes effect after the unbonding period, which is28-day long on Polkadot. This iscalculated by taking the bonding duration (in eras), multiplying it by the length of a singleera (in hours), and dividing by the hours in a day (24). Example:(28 × 24 ÷ 24 = 28 days). Astaking lock will be visible on the Polkadot-JS UI during the unbonding period, and after it, thestaking lock can be unlocked, and the bonded funds become free balance you can transfer.

If your bonded balance did not back any validators in the last28 days on Polkadot (when the feature goes live),you are eligible to perform fast unstaking. Thestaking dashboard will automatically check if youqualify. For more information, visit the"Fast Unstake" section in this support article.

Setting-up Accounts​

Stash & Staking Proxy​

Nominators are recommended to set up separate stash and staking proxy accounts. Explanation and thereasoning for generating distinct accounts for this purpose is elaborated in thekeys section.

You can generate your stash and staking proxy account via any of the recommended methods, which aredetailed on the account generation page. The firstthing you need to do before becoming a nominator is to make sure you have astash account where you can transferfunds you want to use for staking. For these accounts, it is recommended to use a "cold wallet"solution such as Ledger or Polkadot Vault.

After setting up the stash account, it is recommended to have astaking proxy. Although you can be a nominatorwith just a stash account, having a staking proxy is good practice for security reasons.

A staking proxy of the stash will be able to sign for all staking-related transactions as well. Thestash will be fully isolated (except if the user decides to change the staking proxy of the stash orto attach different proxies to the stash).

Rewards Payout Account​

As a nominator, you will be asked to choose an account where rewards will be paid. You can selectone of the following options:

• back to staking: rewards are compounded to the bonded amount.
• to stash: rewards are sent to the stash account as a free balance.
• to another account: rewards are sent to a user-defined account (not stash).

Starting with runtime version v23 natively included in the client version0.8.23, payouts can go to any customaddress. If you'd like to redirect payments to an account that is neither the staking proxy nor thestash account, set one up. Note that setting an exchange address as the recipient of the stakingrewards is extremely unsafe.

Nominating with the Polkadot-JS UI​

Targets Page​

There are many factors to consider when deciding which of your nominations. One helpful tool tochoose validators is the Staking Targets table inthe Polkadot-JS UI. This allows sorting validators using various metrics. Below are the relevantmetrics shown as an example, followed by a brief description of each.

• payout: How recently the validator made its last reward payout to nominators.

• nominators: This column consists of two number values. The active count (left number) isthe number of nominators whose stake is baking the validator in the current era. In this caseValidator A has one active nominator. The total or all count (right number) is the number ofall nominators who nominated Validator A. This includes the active count and all the othernominators whose stake in the current era is baking other validators.

  Every nominator can select up to a maximum of 16validators, which contributes towards maximizing the probability ofhaving the nominator’s stake applied to the validators active set. Nominating too few validatorscould result in the nominators not receiving their rewards when none of them make it to the activeset or when those validators stop validating. The election algorithm attempts to maximize theoverall network stake while minimizing the variance of the active stake across the validators. Foradditional information on the election process, check out the research behindnominated proof-of-stake.

• comm.: Total commission kept by the validator (100% means the validator will keep all rewards, and thus nominators will not receive them). A validator's commission is the percentage of thevalidator reward taken by the validator before the rewards are split among the nominators. As anominator, you may think that choosing validators with the lowest commission is best. However,validators must be able to run at break-even to continue operations sustainably. Independentvalidators that rely on the commission to cover their server costs help to keep the networkdecentralized. Some validators, operated by central exchanges, etc., keep 100% of the commissionto payout their staking service clients and therefore do not provide any rewards to externalnominators. The commission is just one piece of the puzzle you should consider when pickingnominating validators.

• total stake: The total amount of DOT tokensstaked by nominators and the validator (i.e. own stake, see below).

• own stake: The amount of DOT tokens thevalidator has put up as a stake. A higher own stake can be considered as having more "skin in thegame". This can imply increased trustworthiness. However, a validator not having a large amount of"own stake" is not automatically untrustworthy, as the validator could nominate from a differentaddress.

• return: Average annual yield paid out to nominators (i.e. number of rewards divided by thenumber of bonded tokens). Note that nominating those with a higher yield may not guarantee similarfuture performance.

On the Targets page, you can use different filters to select validators with specific traits (wherea trait is a combination of the metrics above). Available filters are:

• one validator per operator: Do not show groups of validators run by a single operator. Itshows small operators only who will likely have a higher commission and higher self-stake.Nominating only small operators might not always guarantee staking rewards, but it helps to keepthe network more resilient to attacks.

• comm. < 20%: Do not show any validators with a commission of 20% or higher.
• recent payouts: Only show validators that have recently caused apayout to be issued. Note that anyone can cause a payout to occur; itdoes not have to be the operator of a validator.
• currently elected: Only show validators in the active set (i.e., they have been elected toproduce blocks in the current era).
• with an identity: Only show validators that have set an identity. Notethat this identity does not have to be verified by a registrar for the validator to appear in thelist.

Bags-list​

Nominating accounts are placed in a semi-sorted list called bags-list. This sorting functionality isextremely important for the long-term improvements of the staking/election system. Bags-list allowsan unlimited number nominators to set their intention to nominate, of which only a portion of it(currently 22500) is considered for electing set that eventuallydetermines the active validators.

The nominator accounts in a bag are sorted based on their insertion order, not by their nominationstake. The voterList.putInFrontOf extrinsic can be issued to move up in the bag, which might bevery useful for the accounts in the last bag eligible for receiving staking rewards. Balance changesdue to staking rewards or slashing do not automatically rebag the account. Whenever applicable,Polkadot JS Apps UI prompts the nominator account to rebag or move up by calling thevoterList.rebag extrinsic.

For guidelines about how to rebag or move your account within a bag, see the followings:

• The "Bags List" Section onthis Support Page.
• The Bags List Section in Advanced Staking Concepts.
• The dedicated technical explainer video.

Validator Stats​

Nominators can query validator histories to seestatistics such as era points, elected stake, rewards and slashes, and commission. It is goodpractice to do comprehensive research on validator candidates. This could include (but should not belimited to) checking the validators' identity (if they have set one) and goingover the validators' websites to see who they are, what kind of infrastructure setup they are using,reputation, the vision behind the validator, and more.

Any problematic behavior must be taken seriously. An example of problematic behavior will be if avalidator is regularly offline. In this case, nominators will get fewer rewards.

Nominating with the Staking Dashboard​

If you are a beginner, please watch the video below for detailed instructions.

The Polkadot Staking Dashboard allows to choose pre-selectedlists of validators based on user preference, or to manually select validators similarly as in thePolkadot-JS UI.

Pre-selected choices are:

• Optimal Selection: Selects a mix of majority active and inactive validators.
• Active Low Commission: Gets a set of active validators with low commission.
• From Favorites: Gets a set of your favorite validators.

Staking Election Stages​

The staking election system has three stages for both validators and nominators, namely "intention","electable/electing", and "active".

• intention to nominate: an account that has stated the intention to nominate; also calledsimply a "nominator".
• electing nominator: a nominator who is selected to be a part of the input to theNPoS election algorithm. This selection is based on stake and is made usingthe bags-list.
• active nominator: a nominator who came out of the NPoS election algorithm backing an activevalidator. When slashing occurs, all the active nominators backing the validator get slashed.

The Election Solution Set​

Determining which validators are in the active set and which nominators are nominating them createsa very large graph mapping nominators to their respective validators. This "solution set" iscomputed off-chain and submitted to the chain, which means it must fit in a single block. If thereare a large number of nominators, this means that some nominators must be eliminated. Currently,nominators are sorted by the amount of DOT staked, and those with more DOT are prioritized. Thismeans that you may not receive rewards if you are staking with a small amount of DOT. This minimalamount is dynamic based on the number of validators, nominators, amount nominated, and otherfactors.

Receiving Rewards​

As long as you have nominated more than one validator candidate, at least one of them got elected,and you are nominating with enough stake to get into the solution set, your bonded stake will befully distributed to one or more validators. That being said, you may not receive rewards if younominated very few validator candidates and no one got elected, or your stake is small, and you arenot part of the top 22,500 nominators, or the validator youare nominating has 100% commission. It is generally wise to choose as many trustworthy validators asyou can (up to 16) to reduce the risk ofnone of your nominated validators being elected.

Rewards are lazy - somebody must trigger a payout for a validator for rewards to go to all of thevalidator's nominators. Any account can do this, although validator operators often do this as aservice to their nominators. See the page on Simple Payouts for moreinformation and instructions for claiming rewards.

Good Nominator Practices​

Required Minimum Stake​

Due to the way the Phragmen algorithm generates the solution set and due to thefact that the solution set must fit in a single block, a minimum number of DOT will be required tonominate with to receive staking rewards can change between the eras.

• min-intention-threshold: minimum stake to declare the intention to nominate. This parametercan be updated via on-chain governance, and the most recent and up-to-date version can be found onchain state (select state query > staking >minimumNominatorBond)

• min-electing: minimum stake among the electing nominators. Since this is almost always thesame as “min-active”, it might not be reported.

• min-active: minimum stake among the active nominators. If your stake falls below this dynamicthreshold in a given era, you will not receive staking rewards for that era.

Thus, for nominator counters, we have:

• count of nominator intentions andmax possible nominator intentions
• count of electing nominators, and maximum possible electing nominators(22500)
• count of active nominators and maximum possible active nominators(22500)

Active vs. Inactive Nomination​

When you go to the Account actions under stakingpage, you should see your bonded accounts and nomination status. If not, you can followthis guide to configure it first. Yournominations will be effective in the next era; eras are roughly24 hours on Polkadot.

Suppose you have nominated five validator candidates, and three out of five were elected to theactive validator set; then you should see two of your nominations as "waiting", and most likely oneas "active" and the rest as "inactive". Active or inactive nomination means your nominatedvalidators have been elected to be in the validator set, whereas waiting means they did not getelected. Generally, you will only have a single validator have an active nomination, which meansthat you are directly supporting it with your stake this era and thus potentially receiving stakingrewards. Inactive nominators were validators elected for this era but which you are not activelysupporting. Every era, a new election will take place, and you may be assigned a different activenomination from the validators you selected.

If you are committing a very large stake, you may have more than one active nomination. However, theelection algorithm attempts to minimize this situation, and it should not occur often, so you shouldalmost always see only a single active nomination per era. See thesection on Phragmén optimization for more details.

Minimum Active Nomination to Receive Staking Rewards​

Guides​

• Be a Nominator (Polkadot) - Guide onnominating on the Kusama canary network.
• Stop Being a Nominator (all networks) - Guide onstopping nominations and withdrawing tokens.