2 posts tagged with "Retainment"

A single month can tell us something useful about a validator's reward behaviour. It can also reflect an unusually large operating expense, a delayed transfer or a decision to add several months of rewards to self-stake at once.

In Introducing validator retainment and compound rates, I explained how monthly snapshots turn public balances, identity relationships and validator rewards into two measurements. Retainment measures reward retention within a publicly linked identity graph. Compounding measures rewards reflected in additional validator self-stake.

Polkadot nominators tend to think in years. They bond DOT, select validators and accept the trade-offs of staking because they believe in the network over the long term.

Validators have a different set of day-to-day decisions. They earn DOT through staking and validator incentive programmes, then decide whether to compound it, hold it, move it elsewhere or sell it. Selling rewards can be entirely legitimate: operators have infrastructure, staff and tax costs. But when a validator consistently sells a large share of its rewards while its nominators continue to hold, the two groups may no longer have the same economic exposure.