Why do some Validators have 100% fees?
OgreAbroad here from the Harmony Community Node. As you are hopefully beginning to learn, I’m all about helping the community. In chat I will recommend other validators whom I trust, even though we have our own.
To answer the 100% fee question, let’s start by talking about what the Fees are, just to establish a baseline. On Harmony blockchain, when you delegate your $ONE to a validator, there are several metrics to pay attention to. Aside from Uptime, APR, and others… Fees are important to key in on. Most Validators have anywhere from 5–10% fees. This means that before you get distributed your rewards, the Validator scrapes their fees of the top. If you delegate to a validator with 10% fee, and your reward should be 100 ONE, you will receive 90 ONE, and the validator will get the other 10.
If a validator has a fee of 100%, you should be wary, and investigate why before delegating to them. As time goes on, each validator will need a way to generate income, besides just block rewards. It is very rare that the 5–10% fees collected will be enough to do much more than run a node, and definitely not enough to sustain a team which will be required to run the node, chat, and any possible initiatives. In time, it is likely that the surviving validators will start projects. Some will base these projects off of a token. This is what Sesameseed has done. Sesameseed will distribute their HRC20 SEED token which will have some very interesting capabilities, including the ability to cast votes! The way that Sesameseed functions, is that it collects the block rewards, redelegates them to itself, and issues SEED to their delegators as a representation of their native chain holdings. Using the Sprout app, you can exchange your SEED for the underlying diversified basket of tokens at any time. There are dozens of reasons why SEED is a way of future proofing your crypto portfolio, but I do not want to bore everyone with a 30 minute read. Sesameseed’s Medium account is linked at the bottom, along with some suggested reading from their articles to continue your learning!
I have long been a supporter of the Sesameseed project, and played an instrumental role in bringing them to Harmony. They are an excellent community and project, with ideals and goals which closely align with the Harmony Team’s. While Sesameseed started their project as the number ONE SR (Super Representative. Tron’s equivalent to a Validator), they quickly realized that over time… not all chains would survive, or align with their ideals. Thus began the journey to spread out, and diversify their project by adding new chains. Harmony is lucky number three! The team expects to continue expanding and adding chains, which will help the Redeem Value backing SEED rise more quickly, as they cap distribution of SEED to 100K daily, across all chains they participate in. This means that as they add more chains, it will be harder and harder to earn 1 SEED… and once they hit the maximum 100K per day distribution, any additional block rewards go straight to increasing the Redeem Value! I would definitely recommend reading further, and finding out more about the Redeem Value to rise each time Sesameseed receives block rewards. It is also worthy of note that the SEED on Harmony is the very first HRC20 token. So early, that the Harmony team hasn’t even built in support for it yet! This speaks to the technical ability of the Sesameseed team. The only place you will be able to see your earned SEED currently is through the amazing Sprout.Sesameseed.org web app. I hope that you take the time to learn more about Sesameseed, and see the potential that it brings to each ecosystem it participates in, as well as your portfolio! (Links below)
As part of our community Node’s mission, we hope to help get the word out. If you are a Validator or have a project which you would like to let people know about, please reach out! I would be happy to write an article for you. Just doing my part to help push the Harmony project forward.
Links —
Sesameseed:
- Telegram
- Website
- Medium
Suggested Reading:
- HRC20
- Sprout
- SEED
My Social Media accounts:
- Telegram — OgreAbroad
- Twitter — LTCYeti (When I first found Crypto in ’17, LTC was my first purchase)
The Harmony Community Node:
- Telegram
- Website
This article is a featured contribution from a community member. The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Sesameseed. They are meant for information purposes only, and are not intended to serve as investment advice or recommendations. They are also not intended to serve as the basis for any investment decision. All investments involve risk and you should conduct your own research when making a decision.
