Want to stake in Nym? Here is how to choose a mix node to delegate NYM to…

People who hold native NYM tokens can stake those in the mixnet — contributing to privacy and earning a share of rewards by doing so. In…

Author: Nym

May 19, 20226 mins read

But how do you choose which mix node to delegate stake to?

Browse Nym mixnodes

In this post we go over the main parameters to look out for and where you can browse mix nodes so that you can start delegating.

When you delegate your NYM tokens, you are contributing to a mix node’s reputation, which increases its chances of being selected to the active set in mixnet for the next epoch. Only nodes in the active set get to mix traffic on the mixnet. This means that the higher a node’s reputation, the more “trusted” it is in the network, which means it mixes more traffic than nodes with lower reputation.

This benefits privacy overall, because it helps maintain a network with well-performing and honest nodes, but it also helps you because you will earn a share of a mix node’s rewards by doing so.

Step 1: check the mix node’s saturation

Make sure you check stake saturation before you delegate. For two reasons:

You do not want to delegate to a node that has already reached 100% “saturation point”. This is the maximum stake (amount of bonded+delegated NYM tokens) a node can reach. Any added delegation beyond 100% saturation will not yield more rewards to you or anyone else. To the contrary, they will begin to negatively affect the share of rewards to delegators of that node. So make sure to delegate your stakes to nodes which are not fully saturated, or better yet, spread your stake across multiple such nodes.
You want to check if the node has at least some level of stake, because delegating to low-stake nodes, but especially low-performing nodes will only yield minimum rewards. Also, mix nodes who put up a bigger bond themselves have more “skin in the game” and give slightly higher rewards. This is to incentivise node operators to run just one node instead of many.

NOTE: the mixnet is very young and most mix nodes do not have much reputation yet!

So make sure you explore and support more mix nodes in this early stage. They will welcome it and likely be generous in sharing their rewards. Beyond stats such as reputation, trust is also important. If you know an active member of the community, support them and the work they are contributing to the mixnet.

Browse the delegators channel to get to know more about the mix nodes you can delegate to.

Join our weekly community calls on Friday!

Nym mixnet explorer (you can rank the mix nodes by total “Bond” which is the reputation)

Node Guru mixnet explorer (ranked by “total stake”, also referring to reputation)

Step 2: check the mix node’s performance

The next thing that you will want to check is the mix node’s performance: does it have good uptime (ideally 100%)? Is it dropping packets, ideally never?

The greater purpose of delegating NYM tokens is to ensure good Quality of Service, which is important, but the bonus is that well-performing nodes are likely to receive better rewards and so also benefits your overall reward rate.

A node’s performance affects its likelihood of being selected to the active set, with a direct impact on profitability.

Check a mix node’s performance:

Nym mixnet explorer (click on a node’s identity key to see performance stats)

Node Guru mixnet explorer

Step 3: check the mix node’s profit margin (PM)

You will then want to look at the node’s profit margin. This is the percentage of rewards that a node operator will receive before sharing the rest among delegators in proportion to how much they have delegated.

Mix nodes with high-profit margin means they are taking most for themselves and sharing very little with delegators.

Mix nodes with low profit margin means they are sharing most of the rewards with delegators.

But remember that profit margin is not the only thing that will determine how much you will receive! The mix node’s reputation and performance play a big role too, so you will have to balance your assessment across these three parameters.

Check a mix node’s profit margin:

Nym mixnet explorer

Node Guru mixnet explorer

Other mix node parameters to consider

Some nodes also offer additional motivation for people to delegate to them. This could be their reliability, their reasons for being part of the Nym infrastructure and their ethos and ethics. For example: maybe they are donating their rewards to a worthy cause.

Here is where node operators are presenting themselves and giving a little more information about what they do and why.

Join our weekly community calls to #MeetTheMixnode.

Now that you have chosen some mix nodes, how do you delegate?

Download the Nym wallet (or use CLI)
Select “Delegate”
Input Mixnode identity
Input how much you want to delegate

Watch this video for more guidance.

How much can you expect in return?

Returns for delegators (APY) will vary depending on the parameters mentioned above, as well as systemic parameters, including the total supply of NYM available to stake in the network and stake saturation point.

Simulations have shown that the early months could see APY of up to 45%, with it tailing off to an average of 7–8% as the supply and network grows.

More guidance and a calculator for APY is coming soon.

This is a blog post based on an academic paper and not an investment prospectus or financial advice. We use the term ‘APY’ in a loose generic sense, and are relying on hypothetical scenarios using experimental technology. Actual results using the technology will vary widely. It’s quite possible that this venture could result in loss of monetary funds for anyone who uses the software. Any participant in an actual network is expected to do their own research rather than relying on these simulation-based experiments.

Further reading:

Nym whitepaper

Nym token economics

Claudia Diaz on Mixmining (video)