Since Crust launched the Preview Network Maxwell on February 4th, more and more storage resources have connected with Crust Network. Thus, demands of staking coins are correspondingly increasing. After entering April, Crust Network changed from lacking in storage capacity to lacking in staking coins, which means owners of CRU can earn considerable income through guarantor mechanism without owning any storage resources. There are a number of CRU holders that haven’t recognized this, leading to missing a great opportunity to benefit from staking. Hence, Crust compiled this guarantor guidance to help you become a clever guarantor.
How to Become a Guarantor
In advance to become a clever guarantor, you should understand some basic concepts which help you become a guarantor:
After successfully joined Crust Maxwell Preview Network, you can see validators and candidate info:
You can select one or multiple validators/candidates to stake your CRU for guarantee. In terms of return, validators will earn block authoring rewards and staking rewards while candidates would only earn staking rewards.
If guarantors choose to stake on validators’ nodes, they could share validators’ authoring rewards and staking rewards. On the other hand, if they choose to stake on candidates’ nodes, guarantors can only share staking rewards. For the total rewards distributed every era in the Crust Maxwell Preview Network, 20% are authoring rewards and 80% are staking rewards.
The guarantors at the bronze level often own a few CRU, so you can simply consider the guarantee fee index. The higher the guarantee fee, the more the benefit for staking CRU. Just directly stake your CRU with the node with a high guarantee fee. Of course, it is better to choose validator nodes rather than candidate nodes all things considered, since validator nodes have authoring rewards while candidate nodes do not.
Careful guarantors would spot some icons at the right side of the page:
Click on the graph icon to find more data:
The graph on right side is very important to silver level guarantors, which are important criteria to pick high-quality nodes:
1. Guarantee Fee Graph
We can see the fluctuation in the guarantee fee of this node on the graph in the past 82 eras. For guarantors, we hope the guarantee fee will be steady. Some nodes will attract a guarantor with a relatively higher guarantee fee, then decrease the guarantee fee, which causes the expected benefit to drop dramatically. No guarantor likes to face this kind of situation.
In the latest update to Crust Network, we have formed a constraint to help reduce this issue. Nodes that decrease the guarantee fee will receive punishment.
The guarantee rate at era 446 was 55%, at this time, the node set the guarantee rate to be 25% to maximize their earnings. To punish this move, at era 447, the guarantee rate was automatically set to 100%, which means earnings (excluding their valid stakes) would be fully allocated to guarantors. The punishment period would be one era, so the guarantee rate at era 448 returns to the previously set amount, 25%.
2. Staking Participation Graph
We can find the self-staking amount from this graph. Crust Network has designed a punishment mechanism for node’s delinquent conduct. Guarantors of the node will be involved when the punishment is put on the node. Namely, the guarantor should choose nodes with a certain self-staking amount. The higher the self-staking amount, the stronger the binding force to the node, and the node will work harder to prevent punishments.
To sum up, a clever guarantor can choose relatively good nodes to stake from validators and candidates. Under the same circumstances, choose a validator node to earn a higher and more steady return.
If you are guaranteeing with a higher amount of CRU, we highly recommend that you become a golden level guarantor, since this will significantly affect your staking return.
As a golden level guarantor, you should first understand, when a higher amount of CRU is guaranteed to a node, it is highly likely to be constrained by the staking maximum. This means the amount of effective stake may be less than the actual amount of CRU staked, so part of your CRU would not produce earnings.
To be more detailed, we use the following example to elaborate on this concept (not considering validators’ authoring earnings):
Node A’s current staking limit is 1000CRU with a 40% guarantee fee, and the total staking amount now is 900 CRU. If you own 900CRU, what would happen if you stake them all on node A?
The total staking amount would change from 900CRU to 1800 CRU, and your 900CRU accounts for 50% of the total. With the limit of 1000CRU, your actual effective staking would only as follows:
The other 400CRU are not producing returns. With an effective stake of 500CRU and weighted guarantee fee of 40%, you only earn full staking returns equivalent to 200CRU.
As a golden level guarantor, how should we make a decision about who to stake with? We should consider the circumstances without authoring returns:
1) Filter high-quality validators/candidates nodes with high and steady guarantee fee, and have certain staking limits. For example:
2) Allocate CRU to multiple nodes to earn the maximum staking returns. You can make good use of Excel Solver to do the calculation. For the above-mentioned situation, the best allocation plan of three good nodes would be similar to the following:
After calculating we can find that 900CRU would not be allocated to node A due to the node’s staking limitation. As a larger staking amount would generate overflow, at this time, it would be better to allocate a part to Node C, whose guarantee fee is 30%. You can also allocate some to Node B, whose guarantee fee is higher and that already has some overflow. This plan can generate the maximum staking return.
According to this plan, you can find out that 817 of your 900CRU is effective staking. After going through the weighted calculation of the guarantee fee, the amount you earn is:
Full staking return of 300CRU, which is 50% more than only staking on Node A.
If we consider the authoring return of validator nodes, it would be obvious that we should choose validator nodes to stake. In addition, we should understand that there is no relationship between validator nodes’ authoring return and total staking amount. Authoring return of rank one validator is the same as the validator at the bottom of the ranking. As a result, we can choose validator nodes with a lower ranking. Their total staking amount would be correspondingly lower and able to earn more authoring returns with the same amount of CRU.
This is the Crust Maxwell Preview Network guarantor guidance. Should you have any other questions, please as the admin in our Telegram or Discord communities. We will also select several common questions to generate FAQs and related articles to help users become more involved in Crust ecosystem building.