Polkadot Staking: An Update

2020-10-19 in  Polkadot, Staking
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Since it went live on May 26, 2020, the Polkadot Network has been dynamically changing as it matures through its launch. Recently, changes have occurred in relation to staking on Polkadot that caused some nominators not to receive their rewards - we are working on a permanent solution and suggest an immediate alternative here.

Polkadot is a Nominated Proof-of-Stake (NPoS) network, designed with the roles of validators and nominators to maximize chain security. The system encourages DOT holders to participate as nominators, but very recently, not all nominators have been receiving rewards.

Why?

Determining which validators are in the active set, and which nominators are nominating them, is a computationally heavy task that results in a very large graph, mapping the nominators to their respective validators. This generated graph is computed off-chain and submitted back to the chain, meaning  it must fit in a single block.

This worked well initially, but as the number of nominators grew, blocks took longer to produce than expected and issues with the new weighting became apparent. As the graph must fit in a single block, solutions with so many nominators were getting too large .

As this was causing network instability, the weighting calculation was updated. For more detailed information on this update, see the pull request here.

Note, this issue does not affect the Kusama network, which has around 1,000 nominators in comparison to about 6,500 on Polkadot.

The immediate remedy

In order to fit the solution into a block, the size must be reduced. There are several good options being considered for a permanent solution, but the immediate fix is to eliminate the smallest nominations (measured in DOT).

The  DOT limit is a dynamic amount – it can move up or down depending on the nominations and the election solutions. Immediately after the weighting calculation, it was 200 DOT. Further re-configurations of the network weight parameters improved this value to 200 DOT. However, this means that for the moment, nominators with a stake smaller than approx. 200 DOT (the actual number can vary) will generally not be backing any validator with their stake. This is why those staking fewer than 200 DOT are not currently receiving staking rewards, as a side effect of the issues above.

The way forward

Developers are working diligently on a fix, which will be implemented as soon as it is available, tested and approved by referendum.

In the meantime, the Web3 Technical Education team is developing workaround strategies for users.

Until more options are available, our current recommendation for those staking with less than 200 DOT who don’t have the opportunity to bond more, is to move to an off-chain staking solution, namely staking on exchanges.

The following exchanges currently offer staking-as-a-service for Polkadot:

Others plan to add staking in the near future.

When we determine a workaround, we will add it to the Polkadot Wiki, Knowledge Base and announce it in the Polkadot Digest on Element. Any other source cannot be considered as coming from Web3 Foundation and could potentially be a scam.

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