Since Proposal 6: Enable Staking Rewards in Jun 2022, BLD stakers are rewarded for delegating BLD to validators.
Which validator should I delegate to?
- diversification, which suggest delegating to more than one
- simplicity, which suggests not delegating to more than a manageable number (perhaps 3 to 5)
- These are important business relationships, each of which merits some time to maintain. You may want to read their blog or even subscribe to monitoring services.
- decentralization, which suggests not only delegating to the already popular choices
- Slashing and double signing risk and Lost rewards from validator downtime , which show the importance of choosing validator with excellence in operations
- customer support
- several validators offer tutorials on how to stake BLD
Slashing and double signing risk
Validators should sign each block exactly once. If they were allowed to double-sign, that could result in double-spending, so it is punished by slashing. As of proposal 6, the slashing penalty is 5%. So if you delegate 100 BLD tokens to a validator that gets slashed for double-signing, you lose 5%, or 5 BLD tokens.
Double-signing can happen as a result of mistakes in operating a validator, so it’s important to evaluate validators on the basis of excellence in operations.
Lost rewards from validator downtime
If validator that you delegate to fails to sign, you will not collect rewards during their period of downtime.
Agoric governance parameters don’t currently result in losing any tokens for downtime, so the penalty for downtime is much less than Slashing and double signing risk.
If they fail to sign more than 5% (Min Signed Per Window) of blocks over an 8hr period (Signed Block Window = 5,000 * 6 seconds/block), they are temporarily removed from the active set for at least 5 min (DowntimeJailDuration).
These parameters are changeable by governance. See explorer: Params for current values.
For more detail, see CosmosParametersWiki/Slashing.md at master · gavinly/CosmosParametersWiki · GitHub