TheGraph: Stake or Delegate?
By: Stake Machine
Tags: The Graph Network, GraphQL, The Graph Protocol, Blockchain, The Graph

Here is a little guide that aims to help you decide the way you will use your GRT to help TheGraph network grow.

So with the launch of the mainnet we now have options to earn additional income on your GRT: stake or delegate.

The easiest way is to choose an Indexer and delegate your GRT to it.

Indexer Strategies

There are 3 main strategies that Indexers are using.

Fair Share

This is the best option for the Delegators since Indexer lets to use his infrastructure for free.

Rewards Share

If Indexer needs more Delegators he incentivizes participants while sharing a portion of its own rewards, so Delegators can earn more than if they had with fair share.

Commission Fee

Indexers infrastructure is pretty expensive and to cover the costs many Indexers are keeping a part of Delegators reward in that case Delegator will get lower rewards comparable to a fair share.

How to choose an Indexer?

Nowadays it’s not so obvious to choose an Indexer, it’s not just the lowest reward cut wins, there are too many conditions.

Overdelegated Indexer

Currently, Indexers are allowed to have a 1:16 ratio between staked and delegated tokens amount, if the delegated amount exceeds Indexer capacity then it becomes Overdelegated.

And more it exceeds the lower rewards it gets. So try to avoid to delegate to such Indexers, they won’t say thank you to you.

Private Indexer

There are a lot of Indexers that have Reward Cut set to 100% (which is set by default) which means that they are not yet ready to let delegators in or just want to keep it private. Delegating to such an Indexer won’t give you any rewards.

Healthy Indexer

How to understand if Indexer is healthy? You can’t

Indexer rewards are cumulative and don’t represent anything close to Indexer performance.

But doing some maths could help you to understand the actual fee that Indexer takes or what portion of rewards it shares. Ryabina wrote a really great guide about it.

Delegate or stake?

We are at a pretty early stage yet to have a proven answer. The number of Indexers is growing, rewards are getting lower because more whales are coming into play. So we need at least a minimum of a month to collect the data which could help to make a decision.

Delegate

Delegations are a safe option to earn GRT:

Indexer can’t rug the pull and leave with your GRT

Your delegated amount can’t be slashed

Even in the worst scenario when Indexer stopped its operation, delegators just won’t get rewards, but their delegated amount will be left untouched and can be undelegated at any moment. But have in mind, that while delegating you have to pay 0.5% deposit tax and this is the max that you can lose.

Also, delegations are eligible for the 28 days thawing period, so you can’t change Indexer fast.

Stake

First of all, you need to have 100k GRT to run your own indexer. But, at least with a minimal stake, you should understand your infrastructure expenses well, and have good expertise running such systems, because it’s not just fire and forget.

There is no documentation available yet, but you can dig into graphprotocol/graph-node.

Delegate to us

We are running Indexer infrastructure since the testnet genesis, our Indexer is running with a “commission fee” strategy in mind, but until we will get 360k GRT delegated amount you can get an additional portion of our rewards.

Our effective commission will be floating around 5–10%, so the reward cut and fee cut will be adjusted dynamically according to a delegated token amount.

Our address: 0x1692a8710dcf0dce24bd34c028479176b97ee9ef

Or search on page for 0x1692–7ee9ef

Feel free to get in touch in TheGraph discord.