Validators and Delegators
In proof-of-stake networks, validators run the software that proposes and checks blocks, and delegators assign their tokens to a validator without running one. Validators usually keep a commission from the rewards, and can be slashed — lose part of the stake — for breaking network rules.
On proof-of-stake networks, validators run the software that proposes and checks blocks, while delegators stake their tokens through a validator without running a node. Both earn rewards and both can lose tokens if the validator misbehaves. Choosing a validator is a risk decision, not just a yield decision.
- Category
- Cryptocurrency and Blockchain
- Reading time
- 4 min
- Also called
- Staking validators, Nominators, Delegated staking
- Updated
Validators and delegators in plain words
Staking ETH means depositing it to switch on a validator, a participant in Ethereum's consensus.1
Validators propose blocks, check other validators' work and vote on which chain head is correct.1
Delegators, called nominators on Polkadot, take a slightly more passive role.2
How delegated staking works
Choose a validator
Compare commission, uptime and track record.
Stake through it
On Polkadot, nominators stake DOT behind validators they choose, helping secure the network.2
No node needed
Nominating doesn't mean running your own node or keeping one online.2
Validator does the work
It proposes and checks blocks on behalf of its stake.
Rewards are shared
The validator keeps a commission and passes the rest to delegators.
Penalties are shared too
Choose validators with care — if they misbehave they get slashed, and part of your stake goes with them.2
Worked examples
Example 1 — Reward after commission
54 tokens a yearA hypothetical delegator stakes 1,000 tokens at a 6% gross reward with a 10% validator commission.
| Gross reward | 1,000 × 6% = 60 |
| Commission | 60 × 10% = 6 |
| Net reward | 60 − 6 = 54 tokens |
The delegator shares in the result without any hardware or uptime duties.2
Example 2 — Slashing hits delegators
20 tokens lostThe same hypothetical validator is penalized 2% of stake.
| Tokens slashed | 1,000 × 2% = 20 |
| Left after slash | 980 tokens |
The validator misbehaved, was slashed, and the nominator lost part of the stake too.2
Example 3 — Price drop during unbonding
$500 lower valueA hypothetical delegator unstakes 500 tokens at $4 and must wait through an unbonding period while the price falls to $3.
| Value at request | 500 × $4 = $2,000 |
| Value when unlocked | 500 × $3 = $1,500 |
| Loss | $500 |
Lock-up and unbonding periods can last days or weeks, leaving stakers exposed to big price swings while they wait.3
Validator vs delegator
| Aspect | Validator | Delegator |
|---|---|---|
| Runs a node | Yes | No |
| Main cost | Hardware, uptime and skill | Commission paid to the validator |
| Slashing exposure | Direct | Shared through the chosen validator |
| Typical minimum | Often high (32 ETH on Ethereum) | Often low |
Where this matters for traders
Earning yield
Staking rewards work a bit like Dividend Yield on holdings.
Liquidity planning
Unbonding periods reduce Liquidity.
Risk control
Spread stake across validators for Diversification.
Hedging staked coins
Lock-ups can be offset with Hedging in derivatives.
Advantages and disadvantages
Advantages
- Delegators earn rewards without running hardware.
- Validators earn commission for their service.
- Spreading stake supports decentralization.
- Low minimums for delegators on many networks.
Disadvantages
- Slashing can hit delegators too.
- Unbonding periods lock funds.
- Commission reduces rewards.
- Token price can fall while staked.
Going deeper
Read as far as you need. Each level builds on the one before it.
Why validators post stake
Beginner
Proof of stake makes validators put up something valuable that can be destroyed if they cheat.4
Minimums and pools
Intermediate
Lock-ups and valuation risk
Advanced
Unbonding can take days or weeks, during which the staked asset's price can move a lot.3 Tax treatment of staking rewards also differs by country.
Common mistakes
Choosing by lowest commission only
A cheap but unreliable validator can cost more through penalties.
Ignoring unbonding time
You may not be able to sell quickly.
Putting all stake on one validator
One failure then hits everything.
Forgetting price risk
Rewards in tokens do not protect against price drops.
Check your understanding
Test yourself before moving on. Each answer comes with an explanation.
Key points to remember
- Validators propose and check blocks.
- Delegators stake through validators without a node.
- Rewards are shared after commission.
- Slashing can reduce delegators' stake.
- Unbonding periods add price risk.
Frequently asked questions
Can a validator steal delegated tokens?
How are staking rewards taxed?
Can I switch validators?
Further learning
- Liquidity
Planning around lock-ups.
- Diversification
Spreading stake across validators.
- Counterparty Risk
Trusting a validator with your stake.
- Hedging
Protecting staked positions.
Sources
This article is written in our own words. The sources below support the specific facts, rules and figures marked with a number in the text. Links open the original publisher’s page.
- ethereum.org. Ethereum staking (opens in a new tab) Checked .
- Polkadot Wiki. Nominators (opens in a new tab) Checked .
- European Supervisory Authorities (EBA and ESMA). Joint Report on recent developments in crypto-assets (Article 142 MiCAR, 2025) (opens in a new tab) Checked .
- ethereum.org. Proof-of-stake (PoS) (opens in a new tab) Checked .
- ethereum.org. Pooled staking (opens in a new tab) Checked .
Educational content, not financial advice. Examples use hypothetical prices and simplified costs; actual fees, margin rules and regulations vary by broker, market and country. We are not affiliated with any publisher linked above. Last reviewed . Report an error or request a source credit.