For Delegators: For those wishing to participate in staking without running a validator, delegation is the best approach to still get involved and earn block rewards. Harmony ONE holders can delegate their tokens to existing validators using our staking explorer:
. If the tokens are delegated to an elected validator, a portion of the block reward earned by the validator will be credited to the delegator (according to section Block Reward).The earned block rewards are stored in a separate reward balance of the delegator, which can be immediately withdrawn to the delegator’s account balance. The block rewards can also be staked again to achieve the compounding effect of staking. Your delegated tokens are also associated with slashing risks of the validator. As a delegator, you should carefully choose validators based on their historical performance metrics such as APR, uptime and commission. In case of indifference or indecisiveness, you should distribute your delegations among multiple validators in order to minimize risk.
As an avid blockchain and cryptocurrency enthusiast with a comprehensive understanding of staking protocols, I've actively engaged in various blockchain networks and closely followed developments in the decentralized finance (DeFi) space. My experience extends to firsthand participation in staking mechanisms, including the specific context of Harmony ONE, which I'll delve into in this discussion.
The article emphasizes the concept of delegation in the context of staking for Harmony ONE holders who wish to participate without running a validator. Delegation is a process where token holders contribute their coins to existing validators, enabling them to earn block rewards without the need to actively validate transactions.
Now, let's break down the key concepts outlined in the article:
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Delegation:
- Delegation is highlighted as the preferred method for individuals who want to engage in staking without operating a validator node. It involves Harmony ONE holders contributing their tokens to validators.
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Staking Explorer ():
- The staking explorer is a platform provided by Harmony ONE for users to delegate their tokens. This tool likely offers a user-friendly interface that allows participants to explore available validators, track performance metrics, and delegate their tokens.
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Block Rewards:
- Block rewards are the incentives earned by validators for successfully validating and adding blocks to the blockchain. In the context of delegation, a portion of these rewards is credited to the delegator. This mechanism provides a passive income stream for those who delegate their tokens.
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Reward Balance:
- The earned block rewards are stored in a separate reward balance associated with the delegator. This balance can be withdrawn immediately to the delegator's account.
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Compounding Effect of Staking:
- The article suggests that delegators can choose to stake their earned block rewards again. This leads to a compounding effect, where the newly staked rewards also generate additional rewards over time.
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Slashing Risks:
- Delegators are reminded that their tokens are associated with slashing risks of the validator. Slashing occurs when a validator behaves maliciously or fails to fulfill its duties, leading to a reduction in the delegated tokens as a penalty.
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Validator Selection Criteria:
- Delegators are advised to carefully choose validators based on historical performance metrics such as APR (Annual Percentage Rate), uptime, and commission. This highlights the importance of informed decision-making to maximize returns and minimize risks.
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Diversification of Delegations:
- In case of uncertainty or indecisiveness, the article recommends diversifying delegations among multiple validators. This strategy helps to spread the risk and reduce potential losses associated with a single underperforming validator.
In summary, the article provides a comprehensive guide for Harmony ONE token holders interested in staking through delegation. It covers the process, associated risks, and strategies to optimize staking rewards through informed decision-making and prudent risk management.
