Delegations and redelegations in Cosmos

Welcome to our comprehensive guide on Delegation and Redelegation Undelegation within Cosmos ecosystem. In this article we delve into how delegation works, the benefits of redelegation and offer insights to optimize your token staking strategies.

Let’s draw a comparison with your bank!
Stake, restake, delegation and redelegation undelegation, become like a Pro !

What is delegate ?

When you deposit your money into a basic savings account, it remains stagnant and earns no interest. Then, your bank may suggest you moving this money into an account that has an Annual Percentage Rate (APR).
This way, you still remain the owner of your money; it becomes active as it works and generates income for you.
It’s exactly the same with your cryptocurrencies in the Cosmos ecosystem. You choose a validator as if it were your bank, to grow your cryptocurrency holdings.
Under NO circumstances are your cryptocurrencies in the possession of the validator, who has NO control over your wallet.
You can decide at any time to REDELEGATE to another validator or simply NOT DELEGATE to anyone anymore.
Consistently, it is YOU who maintains control and has the freedom to choose validators with no inherent risk involved

What is RE-delegate ?

Let’s keep the example provided above, where you’ve already delegated your cryptocurrencies to a validator. You’ve just realized that another validator is very active within a community and have directly engaged with him on a social network. This validator seems competent and friendly to you. Consequently, you decide to cease delegating your cryptocurrencies to an unfamiliar validator and instead, you wish to redelegate it to this validator with whom you’ve had a positive interaction and who appears easily reachable if you need to contact them later. This is what we call REDELEGATION, with immediate effect without unbonding period.
This is demonstrating that you retain control of your cryptocurrencies.

What is UN-delegate ?

Let’s keep the example provided above. You decide to withdraw your cryptocurrencies from your validator to make them available for selling and completely “liquid” in your wallet. This is what we call UNDELEGATION, demonstrating that you retain control of your cryptocurrencies.

How to Delegate – UN-delegate – RE-delegate ?


How to choose a validator ?

There are several categories of validators that can be divided into 2 main categories:

The Pro validator, easy to recognize, is a validator on many blockchains for a long time, including during the bear market.
Go to mintscan.io, at the top right in the search field, enter its name and see the result. You can find the following information :

  1. Validator’s Website: It should contain all the necessary information for contacting them and staying updated on their activities
  2. Statistics: validator’s presence on multiple chains and the statistics
  3. Commission: The percentage of rewards that the validator retains as payment for their service
  4. Uptime: A measure of the validator’s effectiveness on the network. A high number of missed blocks is a negative sign.
  5. Self-Bond: The number of tokens the validator stakes themselves

The Opportunist validator, often a private individual disguised as a pro who has just spotted an opportunity and is trying their luck as a validator. They will rarely have more than 3 or 4 blockchains, will be alone in managing everything and will not have the necessary knowledge in case of a serious crisis on their validator node. This can harm you when their validator node stops! We will soon be writing an article on “how to choose your validator,” we’ll give you the link here.

Risks and issues of choosing an unreliable validator

Your validator is one of your PARTNERS in the world of crypto; you MUST be able to reach them just as you would your banker and be able to ask questions. The relationship of trust is VERY important, especially in case of issues! Typically, a good validator will have Telegram and Discord support channels so that you can reach out to them.

If you encounter a malicious validator, meaning one that doesn’t play by the rules, the network takes action. This could happen if the validator is offline or not signing blocks properly. In such cases, the network removes the bad actor after a while. Your money remains secure during this period. The malicious validator faces penalties, and you’ll get your tokens back intact.

Here are 3 scenarios where your validator won’t be able to generate new tokens for you, leading to a halt in your profits :

  • Double-sign
  • Downtime
  • Inactive validator

Double-sign
Your validator operates multiple servers with the same validator ID, attempting to sign the same blocks multiple times, posing a HIGH security risk to the blockchain! For this reason, he is BANNED and can no longer be a validator on this blockchain!

Downtime
A validator is required to sign a minimum of 80% of the blocks. Amateur and opportunistic validators are often in this situation, either by having servers that are not powerful and robust enough to save costs, or due to lack of skills. But often both! When the validator fails to meet these obligations to sign a minimum of 80% of the blocks, he becomes a weak link in the blockchain, leading to his BAN and permanent exclusion to make room for a more reliable validator

Active / Inactive Validator

Typically, each blockchain has 100 validators. Ranking is determined by the amount of tokens staked on the validator. If a validator doesn’t have enough tokens staked to remain in the top 100 ‘Active validators,’ he automatically moves into the ‘Inactive validator’ category. This category of validators can no longer generate profits with your tokens. The validator hasn’t committed a fault, and it’s even recommended to support him because often he ranks 101st or 105th and can return to the list of the top 100 ‘Active validators’ in a few days.

Stake or UN-stake

How to RE-delegate ?

To re-delegate, follow these steps :

  1. Go to restake.app and select the assets you wish to redelegate.
  2. Navigate to the “My delegations” tab and click on your current validator.
  3. Select the “Stake” tab and click on the black “Manage” button below.
  4. Choose the “Redelegate” option and select the validator you want to stake with from the list.
  5. Click on the blue “Redelegate” button, enter the amount, and approve the transaction in your wallet.

How to UN-delegate ?

To initiate undelegation, follow these steps:

  1. Go to restake.app and select the assets you wish to redelegate.
  2. Navigate to the “My delegations” tab and click on your current validator.
  3. Select the “Stake” tab and click on the black “Manage” button below.
  4. Click on “Undelegate”, enter the amount and approve the transaction in your wallet

What is an Unbonding Period ?

Unbonding to UN-delegate

Generally, the standard within the Cosmos ecosystem is 21 days. This is primarily enforced in the event of a blockchain hack, so that your cryptocurrencies cannot be transferred to another wallet and sold without your consent!

Unbonding to Redelegate

Redelegation to another validator is IMMEDIATE, there is no Unbonding.

Validator change can occur once every 24 hours to ensure blockchain stability.

How to earn more with Restake option

When you decide to delegate your investment, it will generate tokens that you can either sell, keep in your wallet, or choose a third option! This third option is to restake the tokens you have earned instead of letting them sit idle and earn nothing for you. Performing these operations manually and regularly can quickly become very tedious!

What do you think about being able to do this in real-time and automatically to generate even more profit? Each token generated by your validator could be automatically restaked without your intervention.

That’s exactly what we offer below, and it’s called RE-stake. Thanks to restaking you can maximize your rewards without unlocking your initial stake, taking your earnings to the next level.

How it works :

  1. Head to https://restake.app/dymension (or choose an order chain…)
  2. Check the “Stake” section

3. Enable the REStake button

4. Choose the amount or put “unlimited”, verify the expiry date

5. Click on the “Enable REStake” blue button in the bottom right corner

6. Approve the transaction

7. Congrats! You have just started to generate more earnings by staking your APR reward