Validator Address: crocncl1n34qvdcr78a3m760mjl5ejuwrjuqk0utpmw0kn
Here I'll cover an unbiased view of the key items that are generally recommended to look out for - both positive and negative - when selecting a validator. These aren't presented in any priority order. I hope that CROathlon checks the necessary markers!
But, first, some key big questions:
I've answered this in my FAQ. The validator has NO access to your delegated CRO. They cannot shut down shop and run off.
You sure can just pick at random! But, factors like reliability, fees, and other items I'll discuss below should really factor into your decision.
Absolutely. While your delegated funds are safe from theft, you're better off splitting funds amongst a couple of validators or more - depending on your delegation amount.
If the commission rates are equal, your rewards are unaffected, aside from a negligible (0.0002 CRO!) added fee required to claim rewards from an additional validator each time.
And now, the key considerations.
The point of DEFI is to decentralise. So, what we DON'T want is one validator having huge amount of power, as that's going against decentralisation. It reduces the safety of the network, and allows those validators to have an unfair share in voting for any future changes being proposed to the chain by having higher voting power.
How to check:
1) Go to the Validator list
2) Look at the "Cumulative Share" column. You'll already see some of the highest power validators have >8% voting power. What's worse - Crypto.com's own validators add up to over 60% of the overall voting power - which means right now we're not actually decentralised. This isn't great!
As per above, you also want to avoid low voting power! Only the top 100 validators receive rewards. So, you want to avoid delegating your CRO in the validators in spot 99 / 100 for example - they could disappear from the top 100 list or hop in and out of it, which means you don't get rewarded.
Take a look at three metrics when you look at a Validator's detail page:
Commission Rate: The current commission (fees) the Validator is charging. This is a % of your earnings, not of your stake. This is a decimal - so multiply by 100 to get a %. There really should be no reason you're paying more than 5% - there are plenty of operators charging less and are as safe and stable (e.g. CROathlon!)
Commission Max Rate: This is the maximum commission that the validator can charge and cannot be changed. You want to avoid validators with high commission max rates - e.g. someone with a max rate of 0.5 means they can bump their commission to 50% if they like - and if you don't notice for a few weeks, you're losing out on a lot of reward!
Commission Max Change: This is the maximum % by which the Validator can change their rate in a 24 hour period. Avoid those that have high figures as it means they can bump their commission rate to stupidly high figures overnight without you noticing!
This is a huge one. Do you trust a validator who has no skin in the game, or one that has a lot to lose?
For this one, check the Validator's detail page and look at the "Self Delegation" and "Min Self-Delegation" figures:
Self Delegation: how much CRO does the Validator operator themselves have delegated? I'd avoid anybody that has 1 CRO as a blanket rule. I'd then look at the overall size of the validator and see what fraction of the share they own, but generally speaking I'd be weary of smaller figures.
Min Self-Delegation: This is the minimum amount that needs to be delegated by the operator of the Validator for the node to remain active and bonded. Divide this figure by 100,000,000 to get the CRO figure. This number cannot be decreased.
What you're ultimately checking here is whether the validator has skin in the game, and how much can they remove from their validator while continuing to remain bonded and earning rewards - i.e. removing their stake and just benefitting from others.
First off - double check, triple check the max commission and max change. There are scummy scammers out there that boost their rates (see a FAQ below on this) and then drop them automatically every few hours, to scam people into delegating.
Ultimately - look, I won't tell you not to use a 0% validator. Absolutely do - there are some trustworthy ones out there (look at other criteria in this FAQ to determine). But, if you do use a 0% validator, keep an eye out for jail time / them disappearing. While it's lovely to think of these validators as doing this out of the goodness of their hearts, when they're facing costly server hosting expenses, bandwidth costs, headaches of keeping upgraded and informed, it's hard to get an answer to "why are they doing this for free" and "how long will they do this for free for? Until they lose interest? When will that be?"
So - my view is that this is not sustainable. If you keep an eye on your holdings daily and can quickly see if your validator has gone offline / been jailed so you can immediately redelegate, then yes this may be the most cost effective option. Ultimately, the low cost validators out there that have a more sustainable model will charge you approx. 0.14-0.15 CRO for every 1000 CRO you have delegated. That's not very much!
Simple one. There are humans behind the nodes. Can you get in touch with them? Do they have a webpage? Do they have Telegram? Are they active on forums like Reddit?
This one is quite scary and only recently brought to my attention (July 2021). There appear to be validators out there that programmatically are changing their names and fees on a regular basis. Take a look at this guy for example. It may not seem too suspicious at first, but here's what is happening:
Operator makes their Validator 0% and changes name
People out there say "ooo fun, a free validator! Let me Delegate!"
Operator bumps fees to 20%
People from 2 above get angry and say hey we're leaving. But they can't for 30 days so take mental note to revalidate as soon as they can.
Operator changes name and decreases fee to 0% again
Existing people don't know which validator they had to move away from because the name is now changed so they have to dig in, and it still shows as 0%. Meanwhile, more people are signing up as per step 1 above.
This is super scammy behaviour. Also note this person has 1 CRO self-delegated, so has no skin in the game. They have a max change of 10% so they can change their fees from 0% to 20% in 24 hours and 1 minute - and they are doing this all via automated script.
Be careful out there!
My recommendation is spread your funds. In the odd chance that a validator gets jailed, while your funds are safe you don't want to miss out on reward!