Building a Community and Attracting Nominations
After setting up a validator, nominations will not come in without extra work. The community of nominators will need to know about the validator in order to trust staking with them, and thus the validator must distinguish themselves in order to attract nominations. The following gives some general guidance on different approaches to take in building a community and attracting nominations.
Being a high quality validator entails not only effectively running nodes, but also building a brand, reputation, and community around validation services. The responsibilities of a quality validator additionally include marketing oneself and participating in the greater community. Becoming a known participant throughout the ecosystem is a great way to attract nominations and solidify longevity and sustainability as a validator.
One thing to keep in mind is there is a risk involved in staking for both validators and nominators, as both can lose up to 100% of their funds if a validator gets slashed. This means it is paramount for nominators to only nominate validators that they trust, as well as for validators to do their best to instill confidence in their ability to provide validation services. Validators should do their best to build a reputation through many different means, as this is one of the most important factors in how nominators should pick whom they stake with.
Nominators should be able to know whom they are staking with. If nominators stake with a bunch of pseudo-anonymous addresses because it seems profitable, they expose themselves to more risks than nominating validators that follow best practices who they know the addresses belong to. Establishing a clear identity in multiple places can help gain visibility across the ecosystem. This includes setting an on-chain identity and making a known presence throughout various community channels.
All validators should set an on-chain identity and get a judgement on the identity so that nominators can find nodes when browsing through various dashboards and UIs. When someone interacts with the chain, it ensures that an address they may come across belongs to the validator, and actions of that identity throughout various parts of the ecosystem (staking, governance, block explorers, etc) form a cohesive representation of their participation.
It's recommended to fill out as many fields in the identity as possible, so Nominators have ample means of reaching out. Nominators may wish to know more about the Validator, the particular setup, future staking plans, tooling used, or a number of additional topics. Having a dedicated website additionally to provide this sort of information is ideal.
As a workaround, create a primary identity with an on-chain account and then using that primary identity, assign a sub-identity to the Ledger stash.
One thing that can help get some visibility is setting up a dedicated site for your validator, which includes the networks that one is a validator for and validator details such as addresses, commission, and so forth. Including all suggestions from this page is potential content to include on the site. After setting up a website, a validator should include this website in the corresponding field in their identity so nominators can find it easily.
Transparency & Establishing Trust
Considering the risks involved for both Validators and Nominators, establishing trust is one of the most important factors in running quality validator services.
Validators should have skin in the game in their operations in the form of stake that is self-bonded to their validator stash. As slashing applies to the total stake of a Validator, having a high self stake shows confidence in operations, and that they have skin in the game and a lot to lose if they mess up. Having very little self stake can be a signal to nominators that they have nothing to lose in the case of failures.
Additionally, it can help nominators to get a sense of how validators manage their own stake. Defining a self allocation strategy is also helpful in seeing how efficiently a validator's stake can be utilized.
Commission & Rewards
What does your validator charge as commission and how did you come to this number? It can be helpful to be transparent about the long term plans around the business models of running a validator, including the costs for infrastructure and man-hours involved in maintaining operations. As many validators will charge low commissions that often do not cover costs, outlining what commission is charged and why can help justify higher commission rates.
Besides the current commission, it would be helpful to describe the range of commission charged, as nominators can know what to expect in the case that the rate goes up or down. Nominators may want to nominator a validator with a very narrow commission percent range, as this signals stability in a validator's operations and business plans.
Many validators will charge 0% or near 0% commission to bootstrap themselves at first, with plans to raise that over time. It can be helpful to elaborate on these plans in the future. For example "after x amount of months in the active set with 0% commission, we plan to increase it to 1%."
Another factor to consider is that claiming rewards for both the validator and nominator is not automatic. Rewards must be claimed manually or set up in an automated way. Validators are suggested to claim rewards on behalf of their nominators, and be transparent about how often claiming will happen. A nominator may be more likely to stake with a validator that claims rewards daily instead of one that doesn't claim rewards at all.
The following are some tools for automating reward claiming:
One aspect of building trust is being transparent about your validator infrastructure. If nominators know that you are running a tight ship that is focused on security, they are more likely to trust you compared to those that do not disclose their infrastructure.
Some factors of architecture to highlight might include:
Outlining how a validator runs their servers helps nominators get a sense of how diversified a validator is. Does the Validator run in the cloud, on dedicated machines, in a co-located datacenter, or in a home residential setup? Do they run multiple nodes on the same machine? If every validator is hosted in AWS, there is a risk of potential outages that cause large amounts of nodes to go offline, causing slashing for unresponsiveness. Nominators may want to choose validators that have thoroughly diversified the providers they use or the facilities they operate in.
Additionally, how does a Validator contribute to decentralization? It can be helpful to outline efforts made towards this so that the values of a Nominator and Validator are aligned.
It's also helpful to outline what kind of OS is used on these servers, and what is the updating policy on the software on that OS. For example, are LTS versions used, do they use NiXOS, distro-packaged libraries, any server hardening practices, etc.
Are you running the recommended Standard Hardware for Kusama? Can you ensure that machines have enough processing power, memory, file storage, and network connectivity? It's helpful for nominators to know the specs of the machines a validator uses as to assess how they may perform in the network. If a validator is running underpowered machines, they may not want to nominate them, as these can result in fewer blocks produced and fewer overall rewards. In certain circumstances, more powerful machines can result in higher rewards for both the Validator and their Nominators.
Automation and orchestration approaches (terraform, ansible, chef, puppet, kubernetes, etc)
What kind of approach is taken for spinning up and provisioning nodes? How might you automate spinning up large clusters of nodes and upgrading them? Elaborating on what kind of automation (or lack thereof) can help get a sense of how robust a validator setup is. There are many common actions or routine maintenance that needs to be done, and automating this type of thing often helps mitigate human errors.
Does the Validator node have protection against Denial of Service attacks, and if so how is that done? Outlining the kind of network topology of Validator infrastructure will help Nominators get a sense of how resilient operations are to attacks. Some things to highlight are usages of firewalls, VPNs, network segmentation, proxies, or other layers separation.
Both Polkadot and Kusama releases are published here. Validators are expected to upgrade their nodes as soon as a new release comes out. Although not every release is mandatory to upgrade to, each new release usually has bug fixes, optimizations, new features, or other beneficial changes. It's within the best interest of the entire network that validators update their nodes in a timely fashion. This signals to nominators that a validator is timely, care about their operations and is quick to adapt to necessary circumstances.
It can also be useful for Nominators to know how the Validator runs software, and where they get new binaries from. How do they get alerted for new releases? Do they hear about things from matrix? Do they have alerts for particular GitHub activities? Do they use the Debian/RPM packages? Do they use the Parity-provided GitHub binaries? Do they use Parity Docker images? Do they make their own Docker images? Do they build the binaries themselves? Validators often have their own build server for making binaries. If they take the extra steps to make these and do not rely on external parties, this can be seen as a plus from nominators, as it helps contribute to decentralization.
Logging, metrics, monitoring, and observability
Good node operators keep tabs on how their systems are running. Observability is one of the most important aspects of understanding the performance and behavior of a node. One should be able to outline the efforts taken in building out monitoring and observability practices. Are Prometheus and Grafana set up? What types of metrics are collected and looked at? How is this done across multiple nodes? A quality validator may even make these types of metrics and graphs public so that Nominators can see how these nodes are running.
Health checks and alerting conditions
Similar to the last point, it can be helpful for nominators to know what kind of health checks and alerting conditions are in place for validator nodes. What conditions are not normal and may need to be looked at? If conditions are not normal, how is the node operator alerted to this? Are there any public Telegram, SMS, or email alerts? Nominators will want to know that a Validator can respond to abnormal conditions in a timely manner, as their tokens are on the line of potentially being lost.
Many scenarios happen routinely, such as upgrading nodes, restoring backups, or moving servers. Creating runbooks and sharing the procedures and precautions taken around these can instill confidence in nominators that various scenarios are thought out and planned for.
Which regions nodes are in
A diverse network of nodes in varying different regions helps strengthen decentralized networks. Outlining what regions nodes are in gives clarity to this facet of networks. Nominators may want to promote validators that actively try and decentralize networks that operate in regions that others do not run nodes in.
Security / Key handling policies
It is paramount that session keys and stash/controller keys are stored and handled with the utmost care, as a compromise of these can get both validator and nominator slashed. Outlining how keys are handled, how they are stored, who has access to them, and the overall policies and procedures around them is a great point of reference for nominators to gauge how comfortable they are with the security a validator takes.
The relationship between Validators and Nominators is one built on trust, and as such, having direct lines of communication with Nominators is a great way to build and reinforce that trust. This could mean setting up dedicated Telegram / Matrix / Discord channels or hosting a reoccurring call where anyone can join. Creating environments that are inclusive with direct connections between parties is going the extra mile to make sure that nominators know they're in good hands. There are many updates that can be given, such as nodes being updated to a new version, rewards were paid out, servers were migrated, new features or tools have been built, or just checking in to say hello. These kinds of gestures can be much appreciated in putting words and a person behind the name of someone running a server.
Actively Participating in the Community
Participating in the community goes hand in hand with building a reputation. This is not only for Nominators, but for other Validators, builders, developers, governance participants, and general enthusiasts. Being helpful or contributing to discussions can go a long way in building a trusted brand and reputation.
There are many communities to participate in, from validator, developer, and governance communities, to local communities dedicated to specific regions. For example, one can be pretty active in the South American communities, and building camaraderie among those that speak the same language, or can go to the same meetups in an area. One of the absolute best ways of building trust is meeting people in person.
Participating in Governance
An additional way to show that one cares about the network is to actively participate in Governance. Whether it is on-chain in voting, off-chain in participating in discussions, or proposing new things, active participation in the direction of the chain is a great signal that a validator is there for the good of the network. There are many ways different aspects of governance one can participate in, such as voting for council members, weighing in on treasury proposals, voting on public referenda, proposing tips, and more. See the section on governance for additional details.
Producing Educational Content
With a very fast-moving ecosystem, there often are gaps in educational content where there are new features, new changes, deprecations, or just a slow-moving process for putting out information about very complex concepts. Putting out educational content in the form of blog posts, videos, tutorials, development guides, and more (especially if it's geared towards nominators) provides tangible value to the ecosystem. It shows that one has a good grasp of how things work, and disseminating this knowledge to others can provide some credence to one's brand and reputation as a competent entity in the space. Furthermore, one might get tips from the treasury if the community finds something particularly useful.
Building public tooling is a great way to support the ecosystem. This not only provides tangible value to those that use this tooling but also gives visibility to the validator for their contributions. A nominator might be more likely to nominate a validator for the utilities they provide the ecosystem since the validator then can build a reputation around the quality of their work outside their validation services. Some potential categories of building things are: block explorers, deployment scripts, monitoring and observability services, staking dashboards, wallets, command-line utilities, or porting implementations to other languages. Additionally, this may also be eligible to be funded via a Web 3 Foundation Grant.