Staking Agency – selection criteria

A new Elrond era is approaching and, besides the enthusiasm and support typical for our community, in the last period, I have seen that, on the dedicated group chats and social media more and more unclear, often incorrect, information is shared. Due to this, I have decided to outline the below points:

• Why should we delegate to staking agencies and not directly to foundation or Elrond? – The APR offered by the agencies will be, in any possible scenario, higher than the one received from foundation/ Elrond, as it will be significantly reduced in order to encourage the decentralization.

• Why should we delegate from the beginning of the phase and not after 5th of April? – In order to ensure our place to the staking agency chosen based on our personal needs and criteria (technology, security, integrity, back-up plan) and for avoiding the risk to miss this opportunity in the future and to be forced by the circumstances to pick our delegation agency based only on commission fee or on the availability, for the chance to receive a higher APR, to support the decentralization of the network and the agency to reach their goals, in fact, common with the ones of the community.

• Is it possible that a staking agency has a number of nodes lower than the initial one, internally set-up? – Yes, if the network’s maximum number of nodes 3200 is reached, the agency will remain with the number of nodes acquired by 5th of April, thereafter being able to opt for the top-up and for placing nodes on the waiting list.

• If an agency decides to top-up the nodes, the APR of the delegators will decrease? – Yes, if the agency runs a small number of nodes and the top-up exceeds the average of eGLD topped-up on the other nodes. A concrete example: if an agency runs 5 nodes with a top-up of 1500 coins per top-up, per node (total=7500 eGLD) and another agency runs 50 nodes with a top-up per node of 500 coins (total=25000 eGLD), the second one with a higher number of nodes will have a better APR, the first one being penalized by the network due to exceeding the average of top-up per node.

• Is there any risk that we could receive a lower reward if the staking agency chosen by us will not fulfil network’s requirements? – Definitely yes, if the nodes of the agency are not run as per network’s requirements and if the up-time of the servers will go below 98%, these will go in jail for an undetermined period and will not receive any reward. For example, Staking Agency has a great history, being Elrond partner for Mainet launch and managing to keep, for 8 months, an up-time of its nodes of over 99,6% with a rating of 100% for all the 40 nodes; It is implied that choosing the staking agency should involve more than a low commission fee and that it is essential to take into consideration the E2E vision, the knowledge and experience in the domain; as an example, DrDelphi is one of the most experienced validators, winner of both BattleOfNodes – competition created for network testing- , the creator of the Telegram bot @ElrondNetwork_Bot, who tested along the time all the providers, creator of a great infrastructure which includes dedicated and performance servers, constantly monitored. All the data and more can be checked on https://explorer.elrond.com/identities/stakingagency

• Will it be possible to top-up all the 3200 nodes so that the distribution of the coins on top-up to be as balanced as possible? – No, the nodes on which will be possible to top-up are only the ones which will be added through Delegate Manager- smart contract and not on the ones already existing in the network, nor the ones which will be normally added, through the Waiting list from the wallet.

As a personal recommendation, I want to highlight the fact that, one of the most important selection criteria when choosing a staking agency, should be, besides the above mentioned, the involvement and contribution of the team members -time and personal resources wise- in the development of the network and the support offered to the Elrond ecosystem in reaching the goals, their self motivation, transparency and constant presence in the project and community.

#ElrondTheWorld 🚀