Question:
"How does the commission work?"
Answer:
Commission is a percentage of the rewards generated from the stake that is allocated to a specified provider as a form of payment for their hardware and software support in the staking process. Validators or staking service providers typically charge this commission to cover their operational costs, maintenance, and to earn a profit for their services. Delegators receive a portion of the staking rewards after the commission is deducted. The commission rate is determined by the validator or staking service and can vary from one provider to another. It's an essential factor for both validators and delegators to consider when choosing a staking service.
Question:
"What commission should I choose?"
Answer:
The choice of commission is ultimately at the discretion of the validator owner. However, it's advisable to consider various factors when deciding on the commission rate. Here are some key points to keep in mind:
Market Competitive Rates: It's essential to research and analyze what other validators in the network are offering in terms of commission. Understanding the competitive landscape can help you make an informed decision. A commission rate that is significantly higher than the market average may discourage delegators, while a rate that is too low could potentially limit your earnings.
Impact of High Commission: Setting a high commission rate can lead to increased earnings for validators per delegated token, as a larger portion of the rewards goes to them. However, this may deter delegators from choosing your validator, particularly if the rate is significantly higher than the competition.
Impact of Low Commission: A low commission rate can attract more delegators as they would receive a higher portion of the rewards. This can help you build a larger delegator base. However, it might reduce the overall earnings for the validator, so it's important to strike a balance.
Network Rules: Some blockchain networks have minimum commission percentage rules in place, which validators must adhere to. These rules are designed to maintain the network's economic stability and to prevent validators from setting excessively low fees that could harm the network.
In summary, while the choice of commission is ultimately yours, it's important to consider the competitive landscape, the potential impact of a high or low commission on delegators, and any network-specific rules governing minimum commission percentages. Balancing these factors can help you make a commission rate choice that aligns with your goals as a validator while remaining attractive to delegators.
Question:
"Can I use a separate wallet to collect fees/commission?"
Answer:
Currently, we don't support the use of a separate wallet for fee collection. Fees are automatically directed to the main node wallet used during node creation. However, we're actively exploring options to introduce this feature for added user flexibility in the future. Stay tuned for updates on platform enhancements.
Question:
"Do the coins used for registering the validator initial delegation receive rewards as well?"
Answer:
Yes, the coins used for the initial delegation when registering the validator do receive rewards. This initial stake is treated as any other stake, and you will receive 100% of the rewards from this delegation.
Question:
"What is the difference between having a large initial delegation and having the minimum?"
Answer:
It is advisable to register a validator with a small initial delegation and then delegate additional funds from another wallet. This practice adds an extra layer of security to your validator setup. By keeping the initial delegation small, you reduce the potential impact in case of any unforeseen events and enhance the overall resilience of your staking configuration.
Question:
"How to claim validator rewards?"
Answer:
To claim validator rewards, you can perform a "claim validator commission" operation. This process needs to be initiated by the user, and after a few minutes, the claimed rewards should be visible in the validator address. Claiming rewards is a user-driven action that ensures you receive the benefits accrued from your participation in the network.