How to choose a validator for staking NEAR
Quite often there are questions how to choose the validator to stake your deposit in NEAR. There’s no simple answer but there are some rules to follow when choosing a validator.
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The stake delegated to any pool is completely safe. The validator doesn’t have an access to your deposit. This is the main idea.
Rule 1. If you want to support decentralization of the network validator’s stake should not be too large. But on the other hand it shouldn’t be too small cause there’s a risk to be kicked off from validator’s list if there’s no enough funds to take a spot for the next epoch.
Rule 2. If we talking about reward pool’s size doesn’t matter. Rewards are calculated proportionally to the amount of stake that has been deposited to the pool. You’ll get same rewards staking to the pool holds 3 million or 10 million tokens if pools commissions are equal. So the only thing that matters is fee that pool takes for its work.
For example delegated tokens to the pool that stakes 3 million coins with a 10% commission you’ll get exactly same reward if delegated to a pool that has 10 million coins stake with the same 10% commission.
Also it’s kinda cool to have a some kind of connection with your validator. Here’s a list where a lot validators have left their contacts for communication. You can always write and ask anything if needed.
Rule 3. Time the validator spent online matters. It’s important because there will be no reward for the time validator was offline. Thus the pool delegators won’t receive any reward either. Statistics for pools by time online is available here.
What else matters. The spread of validator fees looks weird. For example, there are pools with 100% fee. It’s hard to say why such a commission has been set at all. But such pools look like some kind of closed clubs where strangers are certainly not welcome. So delegated funds to those pools you won’t get any reward at all. The other extreme is 0% validator fees. Most likely this is some kind of marketing effort to attract as much stake as possible with a subsequent change of the commission. There’re no any automatic notifications about fee changes. So you can only find it out manually monitoring validator’s fee.
We can say that the lower is the fee most likely it’ll be increased someday. Bottom line based on the experience with this and other projects one may say that commission of no more than 10% only looks reasonable.
FAQ
Q: What APY should I expect?
A: It’s about 11% APY at the moment*. Excluding the validator’s commission of course. For example you delegated 1000 NEAR to the pool so assuming the validator’s fee is 10% in a year you’ll get about 99 NEAR as rewards depending on the current profitability.
You can view the rewards for the last few epochs here entered your Monitor stake / rewards account.
Q: What does APY depend on?
A: The yield depends on the total number of staked coins. Now it is about 300 million NEAR. Over the time and the general increase of the stake APY will definitely decrease. So earlier you stake your deposit more profit you’ll get.
Q: How to gather information and monitor the current state of validators?
A: The most active community members have developed some useful and convenient tools like:
https://near.zavodil.ru/?pools
https://near-staking.com
Q:I have a small deposit. Does it make any sense to stake it or fees for sending it to the pool and vice versa will exceed the potential yield?
A: Fees in the NEAR network are quite small at the moment and won’t exceed the potential benefit from staking your deposit. So you can get profit even with small deposits.
Q: How long does it take to unstake funds from the pool?
A: Unstaking takes up to 4 epochs now or about 52 hrs*.
*Actual data on yield and duration of the epoch available here or in telegram
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