In this article, we will be providing you with the information and the tools needed to nominate the validator addresses that are right for you. We will be going through the following steps:

1. Polkadot staking mechanics
2. Factors to consider when nominating validator addresses
3. Finding information about validator addresses
4. Strategy to select validator addresses


Polkadot staking mechanics

One slot lasts approximately 6 seconds.
One Epoch has 2400 slots, approximately 4 hours
One Era consists of six epochs and lasts around 24 hours.

To nominate your Polkadot (DOT) you can vote up to 16 validators.

Starting from the 6th epoch, all validators will go through an election process where the ones selected will become part of the active validator set, i.e. these validators will be elected to validate next era's blocks. Active validators will be responsible to validate blocks and will receive rewards for doing so. They will then distribute those rewards to their nominators in the subsequent era.

To be elected, a validator address needs to be among the top 297 highest ones measured by the amount of stake nominated to them. All elected validators will receive the same amount of rewards for their work regardless of the amount of stake allocated to them. The only variation in rewards distribution is through era points which are earned by providing high quality staking services. If a validator has greater era points, they will receive greater rewards. There is an element of randomness in the way validators can earn era points, so it is normal to see variations in rewards from one era to the next.

During the election phase, your stake will be allocated to one of the 16 validator addresses you voted (it could be allocated to more than one if your stake is very large) if elected.



Factors to consider when nominating validator addresses

There are five factors that need to be taken into consideration when nominating validator addresses:

1. Only the top 297 validator addresses, measured by the amount of stake nominated to them, will be elected to validate in the next era.

2. All elected validators will have a similar amount of DOT staking rewards for their work during the era (if behaving accordingly). When the validators redistribute these rewards to their nominators, validators with more stake will have to distribute their rewards amongst more nominated DOTS, leading to lower rewards per DOT nominated.

Example: Pool A has a total of 1600 DOT nominated to it, and pool be has 3500 DOT. Both validator pools will receive 10 DOT for their work in the current era. Assuming 0% commission and equal era points, they distribute the following to their nominators:

Pool A

Nominators

Amount of Stake

Fraction of Stake

Rewards

Joe

500 DOT

31.25%

3.125 DOT

Angelina

300 DOT

18.75%

1.875 DOT

Rachel

600 DOT

37.5%

3.75 DOT

Alex

200 DOT

12.5%

1.25 DOT

Total

1600DOT

100%

10 DOT

Pool B

Nominators

Amount of Stake

Fraction of Stake

Rewards

Micheal

1000 DOT

28.57%

2.8571 DOT

Sara

800 DOT

22.86%

2.2857 DOT

Greg

200 DOT

5.714%

0.5714 DOT

Alice

1500 DOT

42.857%

4.286 DOT

Total

3500 DOT

100%

10 DOT

Alex who nominated 200 DOT in pool A received 1.25 DOT, whereas Greg, who nominated 200 DOT in pool B, received 0.5714 DOT since the 10 DOT had to be distributed amongst more DOT nominated to pool B.

3. Validators will distribute their staking rewards to their top 256 nominators (measured by the amount of stake nominated). Validators that have more than 256 nominators will receive the label "oversubscribed". If among your list of elected nominated validators you have oversubscribed and not oversubscribed validators, it may still be that your stake is, or will be, allocated to an oversubscribed validator.

4. It is important to select a trustworthy validator as there is slashing risk for nominators. A validator that misbehaves can see their nominators stake "slashed". To verify their reputation, you can check their identity as well as historical performance.

5. The validator fees associated to their staking services. Some validators have fees up to 100%, therefore you will not receive rewards if nominating to them.

So with all of this into consideration, the optimal way to maximise your rewards would be to select: (1) validator addresses that have enough stake to be elected (amongst the top 297), (2) but low enough stake that their rewards payouts are high, (3) not oversubscribed (less than 256 nominators), (4) have a history of good staking performance, (5) have a low staking fee.

It is impossible to predict exactly how much stake, or nominators will be nominating to a specific validator address in the subsequent era. The best indication of this is by looking at the current era's values in order to predict how the next era will be. For example, it is unlikely that a validator address with 10M DOT and 600 nominators in the current era will end up with 2M DOT and 200 nominators in the next era.

Finding information about validator addresses

You can find a significant amount of information to make informed decisions on polkadot.js staking targets page. To navigate to this page, select "Network" > "Staking" > "Targets".

In this section we will be showing how you can find the information required for the five consideration mentioned in the previous section.

1. To find out which validator addresses are elected in the current epoch, one can use the filter named "only elected". You can then sort by the "Total stake" column to see which validator addresses have the lowest stake, IE they were the closest to not be elected in the current epoch and were likely the most profitable for this era.

2. To view the amount of stake a validator address has nominated to it in the current era, one can sort the "total stake" column. Note that only validator addresses that are elected will provide the amount of stake nominated to them. This makes selecting non-elected validator addresses a bit more complicated as nominators will not know how much DOT is nominating to them.

3. All oversubscribed validator nodes in the current era will have a scale symbol in their row. The "nominators" column represents the amount of nominators that are currently nominating on the right side, and how many are allocated to the validator address on the left side.

Remember that validators will distribute their staking rewards to their top 256 nominators (measured by the amount of stake nominated). You can check the current nominators stake of a particular validators in the "Overview" section of the staking page. Input the validator address you are interested in and select the drop down arrow for the top 256 nominators as indicated in the image below:

Check the nominators with the lowest stake. If your stake is greater than the lowest nominators' stake of this validator, then if is likely that your stake will receive rewards if your stake gets allocated to this validator.

4. To filter out validator addresses without an identity, select the filter "only with an identity".

You can select a validator address to find out more information about their identity.

To verify their historical performance you can select the graph icon on the far right of their row.

Here you will be able to find the historical era points, elected stake, rewards and slashes, as well as the commissions for each era.

Era points that a validator earns will have an effect on the total amount of rewards distributed to them. Historic elected stake allows you estimate the likelihood of this validator address to be elected, and with the amount of stake. Rewards and slashes allows you to view the performance and behaviour of this validator. Commissions history allows you to see whether this validator address has the tendency to change their fee.

5. The column named "commission" provides the fee charged by specific validator addresses.


Strategy to select validator addresses

There are multiple different strategies depending on a nominators risk profile. In this section I will be giving an example of the two extreme risk scenarios as well as a intermediary risk one. Regardless of your risk profile, it is important to ensure that the validators you select are trustworthy and not oversaturated (unless your stake is very large that you will be among the top 256 nominators).

1. High risk: As we mentioned in the previous sections, having your stake allocated to the elected validator with the lowest stake will give you the highest rewards if they behave accordingly. To achieve this, one may select a series of "elected" validators with the lowest stake, as well as a few "non-elected" validators in the hope that they will be elected in the next era.

2. Low risk: Having your stake allocated to a validator that is elected with high amount of stake (but not oversaturated) will have a higher probability that they are elected in the following eras, but will yield lower rewards than a validator that is elected with lower stake. To achieve this, one may select a series of "elected" validators with high stake that are not oversaturated.

3. Intermediary risk: To have a high probability that your stake is always allocated to a elected validator, as well as the potential of having your stake allocated to a elected validator with a low amount of stake, a nominator can select a series of currently elected validator addresses with high stake, as well as a series of non-elected validator addresses. During each election phase, a nominators stake will have their stake allocated to an elected validator, and if one of the non-elected validator addresses get elected, their stake may get allocated to it and they will receive higher rewards for that era.


There are many strategies that one can attempt depending on their risk profile. Regardless of what you chose, its important to monitor your validator addresses to see if conditions change.

We hope that this article has helped you understand how nomination on the Polkadot network works, and helped you to understand how to select the right validator addresses for you.

Note that P2P Validator regularly monitor their Polkadot network page to provide a series of 16 validator addresses that will guarantee DOT payouts.

If you have any feedback or any questions, please dont hesitate to reach out!



For more information on staking Polkadot (DOT) with P2P Validator and our special offer for large DOT delegations, visit https://p2p.org/polkadot.

For additional staking support, visit the P2P Polkadot support center.

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