How To Choose Polkadot and Kusama Validators

This is article 2/4 in a short series on staking DOT, KSM, and finally HDX tokens.

Be sure to check out the previous article: Polkadot and Kusama’s Phragmen Algorithm and the next article: How To Stake Polkadot DOT and Kusama KSM.

You may also be interested in our series: Grow Crypto Assets and Income by Staking.

Key Takeaways

1. Visit Polkawatch to view validators by size. Ideally, you avoid staking with the largest validators to help the network decentralize.
2. Visit DOTapps.io to refine your validator search.
3. Toggle the switches, “comm < = 10%”, “with capacity”, “currently elected”, and “with an identity” to the ON position.
4. Verify the validator has an on-chain identity, not just an address.
5. Verify the validator has a decent amount of self-staked tokens.
6. Verify the validator charges reasonable commission.
7. Verify the validator has fewer than 512 nominators.
8. Verify the validator has a website, social presence, and a way to contact them.
9. Visit Subsquare to verify the validator’s voting track record.
10. Bond your DOT/KSM and nominate!

We are one of the genesis collators for a project built using substrate called, HydraDX. HydraDX aims to be the go-to DEX for the Polkadot ecosystem. It’s sister DEX, Basilisk can be found on Kusama.

There came a time when we realized that we didn’t know much about staking tokens in these ecosystems. It’s very different from staking MATIC, ATOM and KAVA, the other chains we validate.

We didn’t know many of the validators either, since we spend most of our time in the Polygon and Cosmos communities.

Fortunately, when shopping for a validator the criteria are fairly universal. Staking however is not.

We needed to gain a firm understanding of how Polkadot and Kusama work. We compiled that information in our next article and tutorial: How to Stake DOT and KSM. Be sure to check it out.

Polkadot and Kusama staking requirements

Let’s start here: How many tokens do you have? The minimum DOT staking requirement changes over time.

Currently you must have 451 DOT tokens to stake as a single nominator. Staking pools only require 1 DOT token to participate. If you have fewer than 451 DOT tokens, you’ll be shopping for staking pools. Check pools on Polkawatch too.

Kusama stakers only need 0.10 KSM to begin nominating!

Unlike Polygon and Cosmos, DotSama goes out of its way to prevent validators from becoming too large, from having too many nominators and too many tokens. It uses an algorithm called, Phragmen.

FACT: Large nodes with a huge total stake are BAD for network security, so the Phragmen algorithm is designed to prevent it.

The things you must know when staking DOT and KSM

DotSama is gamified and is much more complicated than staking in other ecosystems. It is NOT stake and forget it. You must check in on your stake from time to time. Here are the basics of DOT and KSM staking that you must know.

1. Every 24 hours (1 era) the algorithm decides which 297 validators will provide the best protection and most decentralization for the network. It then places those 297 validators into the active set to validate blocks and earn rewards.

2. Validators with more than 512 nominations are OVERSUBSCRIBED.

3. If a validator you nominated becomes oversubscribed, YOU’RE SUDDENLY COMPETING to earn rewards with the other nominators on that node.

4. Staking yield is HIGHEST on active nodes with the lowest total stake and LOWEST on active nodes with the highest total stake. Said another way, staking yield falls as your active validator collects more tokens from nominators. That’s important to know.

Most stakers on other chains delegate/nominate the largest nodes, thinking that it’s safer or something. They get PENALIZED for doing that on DotSama and REWARDED for nominating smaller validators.

If you only stake with one node it’s HIGHLY UNLIKELY that you’re getting the highest yield, especially if it’s oversubscribed!

5. You want to NOMINATE SEVERAL VALIDATORS.

REMEMBER, active nodes earn block rewards. Inactive nodes do not. The active set changes every 24 hours.

Why stake directly and nominate on-chain, instead of using Kraken or Coinbase?

It is so important to maintain control of your keys. I’m sure the FTX, Celsius, Bittrex, and BlockFi customers would tell you the same thing.

Crypto is designed to cut out the middlemen. The centralized exchanges tend to dominate network voting power and charge huge commissions. You should pocket those tokens instead.

Be sure to check out our article: Why You Should Not Stake ATOM With Coinbase.

Best practices for picking Polkadot and Kusama validators

The DotSama ecosystem is still in its infancy, so the user experience isn’t great and requires a few extra steps to get the information you want. Unfortunately, you will have to use a couple different websites to research DOT and KSM validators.

Choose DOT and KSM validators by using Polkawatch

Polkawatch is a good resource to see validators by size. Surprisingly, Polkawatch doesn’t link to validator websites. Swing and a miss! Click the Polkadot logo in the top right to change to Kusama, if need be.

DO NOT nominate the largest validators. You’ll notice they run multiple machines. That’s because they are continually oversubscribed and must spin up new nodes.

In the spirit of decentralization, take a look at the validator names you see in the bottom half of the active set.

Choose DOT and KSM validator information using DOTapps.io

DOTapps.io will allow you to filter validator search results. It is not user friendly, but will link you to the information necessary to make an informed decision. The link above should take you to the “targets” page. If not, click “Network” then “Staking” then “Targets.”

If the page is not loading, you will need to switch the RPC that delivers information to the explorer. To do this click the Polkadot dropdown arrow in the top left of the screen. Then click “Polkadot & Parachains.” You will see a list of RPCs like, Automatc, Dwellir, OnFinality, Parity, etc. Pick one and hopefully it works. If not, try a different one. (see image below)

Notice the switches that you can toggle, on or off.

1. Toggle the switches, “comm < = 10%”, “with capacity”, “currently elected”, and “with an identity” to the ON position. This will filter the results. (see image below)

2. Click the drop down next to “own stake” to display the validators that have self-staked tokens. You want to nominate validators who have skin in the game. (see image below)

The blue circle with the > sign on the left indicates that validator in currently in the active set and earning rewards. That’s why you see a “return %” on the right side of the screen.

3. Only consider validators that have a verified on-chain identity. If all you see is an address and not the validator name, keep shopping. Dishonest validators love to stay anonymous.

4. Find a validator that has a rank lower than 297, charges at least 1% commission, who has a reasonable number of self-staked tokens, fewer than a couple hundred nominators, and then click on that validator’s name. (see image below)

5. Verify the validator has a website, a way to contact them, and a presence on social channels. If those details are missing the validator is hobbyist, not a professional. You want to stake tokens with professional validators. You will see those details in the box that popped up on the right side of the screen. (see image above)

6. Check out their website to verify there is a way to contact them and that they appear to be professional.

7. Check out their social channels to verify that they are actively involved and contribute to the community by posting and commenting.

8. Check their voting record on Subsquare. Validators who vote on referenda, care. If a validator cares, they are likely to reliably operate 24/7/365.

9. Copy their wallet address and validator name to access later.

10. Repeat this process, so you have 2–4 validators. You can nominate up to 16 validators, but that is discouraged unless you have a huge bag of tokens to stake. Be sure to check out our previous article about DotSama’s Phragmen algorithm for more detail.

BOOM! You are ready to stake your DOT or KSM.

Now, navigate to our DOT and KSM Staking Tutorial for a detailed description of what comes next.

You may also want to read: Why It’s Important To Stake With Small Validators.

Nothing we say is financial advice or a recommendation to buy or sell anything. Cryptocurrency is a highly speculative asset class. Staking crypto tokens carries additional risks, including but not limited to smart-contract exploitation, poor validator performance or slashing, token price volatility, loss or theft, lockup periods, and illiquidity. Past performance is not indicative of future results. Never invest more than you can afford to lose. Additionally, the information contained in our articles, social media posts, emails, and on our website is not intended as, and shall not be understood or construed as financial advice. We are not attorneys, accountants, or financial advisors, nor are we holding ourselves out to be. The information contained in our articles, social media posts, emails, and on our website is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation. We have done our best to ensure that the information provided in our articles, social media posts, emails, and the resources on our website are accurate and provide valuable information. Regardless of anything to the contrary, nothing available in our articles, social media posts, website, or emails should be understood as a recommendation to buy or sell anything and make any investment or financial decisions without consulting with a financial professional to address your particular situation. Blocks United expressly recommends that you seek advice from a professional. Neither Blocks United nor any of its employees or owners shall be held liable or responsible for any errors or omissions in our articles, in our social media posts, in our emails, or on our website, or for any damage or financial losses you may suffer. The decisions you make belong to you and you only, so always Do Your Own Research.