The act of delegated staking is aimed at DMD Diamond coin holders without a validator required DMD amount (minimum of 10, 000 DMD and maximum of 50, 000 DMD) to create a pool in becoming a validator, but have a minimum of 100 DMD Diamond coins. This use-case can also be used by DMD Diamond coin holders that have 10, 000 DMD or above, but are unwilling to either run their validator node or use the configurable node operatorship share option. You can split your coins on multiple validators using the Diamond-UI.
Once you have your DMDv4 coins in your web3 wallet (like Metamask); the next is to participate in contributing to the DMD Diamond ecosystem’s security by staking on validator(s) of choice via the Diamond-UI, and have a share of epoch rewards in return. You may now wonder how you could choose the right validator to maximize your rewards. This article is here to guide you!
How Delegated Staking Works?
It is not required for delegated stakers to run both DMDv4 and validator nodes to participate in securing the network before he can get a fair share of epoch rewards. Whenever you stake on a validator of choice via the Diamond-UI, your coins stay in the on-chain staking contract, and never with the validator. Validators can never access your coins. You only delegate some coin weights to the validator, and by doing so, you get a share in the validator’s epoch rewards, which are re-staked on the validator on the epoch end.
How often your validator is part of active validator sets in every 12 hour epoch determines your amount of rewards. The only risk you have with a validator candidate is reward-related, which is dependent on whether a validator’s node stays online, synced well with the blockchain, and behaves reliably without frequent connectivity report issues.
How To Choose the Right Validator?
The Diamond-UI dApp remains the central point of interaction with the DMD Diamond ecosystem. To select the right validator to stake on top via the Diamond-UI, you are advised to prioritise the following;
1. Valid Status, High Trust Score and No or Few Connectivity Reports
- Look for validators in “Valid” status. By way of our blockchain design, you can never stake on a validator when he is already in the active set. However, on the UI/UX side (which is via the Diamond-UI), it is possible to stake on a validator in the active set, but it becomes active in the next epoch. You can also unstake from a validator when he is out of active validator set, meaning; when he is in valid state.
- Check for a validator with a high trust score rating. The higher the score is, the more frequent the validator is chosen. However, the score grows on the standby valid state. Active validators don’t gain score(s) after the epoch ends. Validators with higher trust scores are also a reflection that they maintain good uptime on the network.
- Ensure they have no or very few connectivity reports (CR). The CR column on the Diamond-UI shows how often the validator was reported by other nodes for connectivity issues.
Validators with high uptime and excellent connectivity are more likely to participate and stay in the active set, and in turn more epoch rewards for you.
2. Higher Coin Stakes
Another important factor that determines whether a validator would be part of active sets is their total coin weight. This means; the more stake a validator has, the higher the chances of such a validator to be selected. As a delegated staker, your stake contributes to the validator’s total coin weight. However, once a validator reaches the maximum 50, 000 DMD coin stakes, a new delegate staker can not stake on him. You should rather find another validator (with coins below the maximum stake) to stake on top.
Validators with larger total stakes are more stable to be chosen in the 12 hour epoch rotation (to be part of active set) and hence the right choice for delegated stakers to stake on to maximise their reward. Such a validator should be selected to stake on top after ensuring he is not characterised with frequent connectivity report issues, has higher trust score and importantly he is in valid status.
Furthermore, the validator’s total coin weight also reflects his total DAO weight. Validators with meaningful DAO weight often show long-term commitment to the network, propose growth-driven strategies for the blockchain’s adoption, and are more active in the community discussions. Indeed, such validators are a right choice for delegated stakers.
Follow Up Strategies
It is important you evaluate your validator regularly. If it is impossible to check daily, revisit the Diamond-UI every two or three days to evaluate your validator performance by checking his status (he should not be in invalid state), CR score (no or few connectivity reporting times) and good uptime (high trust score). The new version of the Diamond-UI is also coming with a validator (pool) creation date which you can use as a criteria for your evaluation as well.
The beauty of the DMD Diamond’s delegated staking ability is the flexibility that comes with it. If your validator is underperforming, don’t hesitate to unstake on him and choose another validator that meets your criteria. You can switch anytime on a validator. Remember; no validator has control over your coins. Your coins are in the staking contract!
Conclusion
Another way to maximize your reward potential is to split your DMD Diamond coins across multiple validators on the network. This means that; if one node is experiencing downtime, others will continue earning, and hence, more reward for you. Additionally, delegated staking is way beyond passive earning, you are also contributing to the blockchain governance and security. Therefore, choosing a validator candidate with strong network performance not only maximises your epoch rewards but also strengthens the blockchain. That is obviously how delegated stakers play a crucial role in the decentralised DMD Diamond’s ecosystem.
