Nominators

What Is Nominators?

Nominators refer to one of the chief two actors participating in a network of blockchains that utilizes the NPoS (nominated proof-of-stake) consensus algorithm. At the same time, the other takes into account validators. In regular PoS (proof-of-stake) networks, the potential of a body validating the network transactions or mining is entirely dependent on the sum of network tokens. The network’s mining power is, in this way, increased with an escalation in the figure of tokens that the validator or nominator holds. The very power is additionally utilized in the rest of the decision-making situations. It is famously used in functions related to governance, as the validators vote on the proposals dealing with the network’s future development, for instance.

Nonetheless, in most situations, as demonstrated by a few DAO (decentralized autonomous organization) implementations, not all of the miners or validators utilize the voting power thereof on every occasion of decision making. This can be because they may not be available at all events for voting actively. In addition to this, another reason for this may be their unwillingness or inability to have time for checking and comprehending the frequently complicated technical contemplations needed for the particular decisions.

A probable solution for the respective matter is the PoS variation dubbed NPoS, taking into account the procedure of nominating (or choosing) validators that have permission to participate in the consensus protocols. That is how both the nominators and the validators have an essential part of being played in NPoS. NPoS have gained considerable fame because it is utilized on behalf of the blockchains such as Kusama and Polkadot.

The bond between Nominators and Validators

Validators are responsible for constructing and sustaining the network, upholding the services it provides via creating entire blocks and validating parachain blocks. They constantly operate, utilizing the native tokens of the network to support them from the position of the validators and provide the benefits for ongoing compliance with the rules set by the protocol. Remaining unsuccessful in complying with the rules results in penalties (usually termed as slashing), whereas they are given rewards by following the respective rules, where sometimes they receive a proportion of the charges that they recompense for utilizing the services of the network.

The position of the nominators is also that of the owners; however, they do not participate actively in consensus. Instead, they utilize their economic support (in the form of tokens possessed by them) for the nomination of the validators to be selected for active slots. They are incentivized to carry this out by getting a share in the rewards earned by the validators nominated by them for the active slots. Similar to the validators, they ought to go per the protocol rules.

True Representation

As the incentives usually are distributed proportion-wise to the overall stake of the validators, nominators can earn greater rewards in return for nominating probably less reputable validators with (perhaps) short stakes as their support. This provides an advantage to the nominators to pursue a comparatively diverse team of validators rather than nominating the same ones for every set.

Josh Fernandez

Josh Fernandez

20-something Non-giver of ETH.

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