How to select your delegation

How to select your delegation

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5 min read

Nodes or knots

In order to know how to choose the mixnode(s) to delegate to, it is important to understand how the rewards to the mixnodes are calculated.

First of all, the profit margin announced by the operators is taken out from the delegators profit. This amount can be more or less important, this choice is up to the person or the group that manages the node. The Nym explorer allows to know this percentage: https://explorer.nymtech.net/network-components/mixnodes. The “profit margin” given as an example below indicates that some mixnodes keep 10% and the remaining 90% are given to the delegators or others give 93% and keep 3%.

profit margin

The criteria used

The documentation details the elements taken into account to determine the reward of a mixnode. They are distributed at each epoch, which currently lasts about 1 hour. 720 mixnodes are selected, 120 of which are on standby (which also receive NYMs, but less than the active ones).

The site https://explorer.nymtech.net/network-components/mixnode allows to know the value of the parameters for the mixnodes.

An important criterion to take into account is the amount already delegated on the mixnode, which is considered as the reputation. The more reputable a node is, the more likely it is to be selected in the epoch to mix packages and thus to receive a reward for its work

To avoid too high a concentration of delegators, a maximum (about 1 million NYM) is set. If a node reaches this cap, the delegated NYMs no longer increase the total reward.

stake saturation example

But beware, this is not the only criterion.

Other elements must be taken into account:

  • Performance ou uptime

uptime example

The uptime in the mixnet (not to be confused with the uptime of the server) is calculated by the validators using “ping” and allows to have an availability of the mixnodes

Values considered as good: 96 to 100%

  • Reputation

delegation example

Calculated according to the amount of the “bond” (deposit put by the operator when announcing the mixnode) and the total amount delegated.

The more NYMs a node (up to the maximum) has delegated, the higher the rewards. It is good not to delegate to saturated nodes, above 1 million NYM

  • Pledge

bound example

The number of NYMs put in when the operator announces his node also influences the rewards

  • Profit margin

profit margin example

A too low margin is interesting for the delegators but it can imply that the operator is running his server at a loss, as he does not receive enough rewards to allow him to at least pay his server

Percentage that the person(s) managing the mixnode takes. The higher it is, the lower the rewards for the delegators.

Values considered good: 6 to 10%.

How to choose?

According to the different parameters taken into account for the calculation of the rewards, it is interesting to propose some guidelines for choosing a mixnode.

If your goal is to maximize your rewards, there is no secret, you have to take into consideration the mixnodes with the most NYM delegates, this criterion is currently the most important and the performance parameter must also be considered. However, beware of maximizing your return, you risk penalizing the decentralization and the performance of the mixnet. One advice is to divide your delegations over several mixnodes taking into account for example the tracks below:

  • You may want to support nodes run by operators that have demonstrated interest and commitment to doing a good job by participating in test networks or contributing to community channels.

  • You may also want to support diversification and decentralization by delegating to nodes in regions of the world where there are fewer registered applicants, so that the network has nodes in all regions of the world. You can also support a node because it is run by people or with ethics and morals that you support.

Other selection criteria

However, these parameters are not everything. There are other elements that will not directly influence the rewards but rather allow the network to be optimally decentralized.

The contact with the operators is an element to take into account. For example, how do you contact them? Is there a place where updates or problems are announced or is there an email address to ask questions, etc.?

Paraphrased from https://blog.nymtech.net/staking-in-nym-introducing-mainnet-mixmining-f9bb1cbc7c36

Keep in mind that a node’s reputation can be quite dynamic, as stakeholders can move delegated participation from one node to another at any time, as well as non-delegated participation to do other things with the funds. So, imagine that you delegate to a node with a high reputation, but soon after, the node begins to perform poorly and other delegates move their stake, lowering the node’s reputation. After a while, you may find that your delegated bet did not result in as much reward as you had anticipated at the time of delegation. On the other hand, you can delegate your stake to a “budding” node that does not yet have a high reputation but is operated by an active community member. If the node performs well and is able to attract other delegated entries, the rewards you receive for supporting that node will increase beyond what you might expect based on the node’s initial reputation level. This also means that you can review and adjust your delegation decisions from time to time, to ensure that you are supporting nodes that are offering adequate rewards.

About No Trust Verify

We are deeply experimentation-oriented, with a particular focus on technologies related to privacy, self-sovereignty and trustless organizational structures. Our proactive commitment is reflected in a number of projects. In particular, we are contributors to Nym, supporting the existing infrastructure, developing applications and spreading essential knowledge related to privacy issues. In addition, we are active contributors to the Alephium community, offering decisive components such as full nodes, useful and exploratory services, Bridge guardian while participating in the development of dApps.

We are the developers of pastenym.ch, alph.bet and walph.io

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