Era 93: arrival of a whale and switch to seven day commission increase notice

Since Era 93 we got ourselves a whale. It’s likely a single whale whose nomination resulted in 20 or so validators getting over 1 million xx each (era 93).

Arrival of a whale

What does it mean for xx validators, nominators and XX-VALIDATOR in particular?

First, this whale’s nominations are currently concentrated on relatively few nodes, all of which have on-chain identity and have been around for a while. XX Team’s “seed” nodes are also staked because they’re like the Fed. This means “brand recognition” helps.

Second, Phragment allotments (ranging from 1 to 2 million per validator) will probably become more granular after coins become unlocked which can take weeks, if not months.

Both of my current nodes got nominated.

My first node, XX-VALIDATOR, has been around for a while, so I guess its reputation and on-chain identity helped.

Until last era I staked the node with 3/4 of th wallet and ran it at a 5% commission, to attract nominators (and in era 92 I think I’ve had around 20K xx in nominations).

With the arrival of the whale, assuming his allotment doesn’t change, I stand to make around 10% (150/1400 MM) from nominations and 5% from validation, which amounts to approximately 45 xx/day. That’s fine, but many worse nominators who did not get nominated by this whale now stand to make twice as much on a much smaller stake.

I can do this differently:

My choice:

This still makes my node remain one of more competitive nodes in Asia.

As of today, XX-VALIDATOR has 44 nominators!

The second node, XX-VALIDATOR-2, has been around only around six weeks, but it also has on-chain identity and maybe benefited from its consistently low commission and “association” with XX-VALIDATOR.

It’s got a tiny validator stake (16K until this week when it increased to 29K xx) and a nomination of this size renders earnings from stake less than earnings from commission.

My commission plan from December sets up to 5% commission starting February 17, so this is a good time to do that because I’ve been one of lowest cost nodes around (some nodes take 3% or even 0%, but the validators have them staked with much more than I). Recently I promised (in on-chain identity) 4% until Feb 25, so I will increase commission to 5% starting Feb 25.

Because the plan calls for no more than 5% until mid March, XXV2’s commission won’t climb above 5% until at least March 18, 2022.

Many will no doubt feel discouraged.

As one of fellow validators said, after getting 300xx/day on a 50K xx validator stake (and 0 xx in 3rd party nominations), it’s hard to get used to making 40 xx/day.

I think many validators don’t get their role in NPOS. It seems quite simple to me - it’s like PoW but with less work.

Being able to run a node doesn’t somehow entitle you to earn 30oz of silver per month. It’s just like running a VPS hosting service, but with some programs running on top of those VPS.

You can’t get rich providing one hosting with one VPS or one physical server!

What’s becoming obvious - at least for those validators who share single-digit percentage of node earnings based on their stake - reliance on validator commission is the only way to make money validating. This also means that validating with a 30K xx stake and a 10% commission could be sustainable.

I didn’t expect such a large nominator landing on both of my nodes, but that doesn’t change my plan.

These nominations may indicate I’m doing this right, and that I may be able to add a few more nodes without having to worry about getting elected. We’ll see in March!

Meanwhile, I am going to make several changes to adjust, but without breaking my promises to nominators. Summary of changes:

These changes will allow me to make just enough to not lose money.

In medium term - depending on the price of xx coin - I may be able to grow my validator farm.