Nominators Definition
In the context of blockchain and Proof of Stake (PoS) systems, nominators are the holders of a cryptocurrency who secure the network by nominating validators. These validators then perform tasks on the network on their behalf. Their role includes choosing trustworthy validators, tracking their performance, and distributing crypto rewards.
Nominators Key Points
- Nominators are cryptocurrency holders in a Proof-of-Stake system that delegate their crypto to validators.
- Their role requires diligence as they are responsible for selecting trustworthy validators.
- Nominators share in the rewards (and the risks) of the validators they nominate.
Who are Nominators?
Nominators are a fundamental component of Proof-of-Stake (PoS) and comparable consensus systems within the blockchain sphere. They are individual members of the system who possess a certain type of cryptocurrency that they willingly lock up or “stake” to back reliable validators in the network.
What do Nominators do?
Nominators participate in network security by nominating or delegating their tokens, the cryptocurrency they possess. They select validators, which are nodes in the network that perform tasks such as creating blocks and validating transactions. Nominators have a vested interest in choosing validators carefully as the performance of these validators directly impacts their rewards.
Where are Nominators found?
Nominators are found within blockchain environments that utilize Proof of Stake (PoS) or similar consensus mechanisms. These include, but are not limited to, networks like Ethereum 2.0, Polkadot, and Cosmos.
When do Nominators operate?
Nominators operate continuously, as long as the PoS blockchain network is running. They stake their tokens and nominate validators when they initiate their participation. Subsequently, they may frequently review and alter their validator nominations.
Why are Nominators important?
Nominators are important as they uphold the security and integrity of the blockchain network. By incentivizing their chosen validators with their staked tokens, they encourage the correct validation of transactions. This dynamic forms the basis of the PoS consensus mechanism, making nominators an essential element of PoS blockchain systems.
How do Nominators function?
Nominators function by delegating their staked tokens to nominated validators in the network. The validators then perform their tasks, and the rewards (and any penalties for misbehavior) are distributed proportionally to the nominators based on the stake. In many staking models, nominators can also un-stake their tokens, though usually with a delay and potentially some restrictions.
