Solo-baking vs. delegating


#1

As the l(a)unch is getting closer I want to prepare myself :wink:

Simple question: Under which conditions do I make the most additional tezzies?

  • solo-baking/home-baking
  • delegating my stake

If solo-baking:

  • why?
  • does it make a difference (percent wise) if I bake with 1 role, 2 roles, 5 roles, 10 roles?
  • am I more likely to get selected to bake a new block with more roles?
  • are there incentives in place for solo-baking aside from helping securing the network to make it more decentralized? (which is the point of a distributed ledger)
  • how big is the risk of beeing “deactivated” after a short downtime?
  • what are the security implications? do I need a firewall etc.? (additonal cost)

If delegating my stake:

  • why?
  • do I get a fixed percentage from the baking reward and/or endorsment? (eg. 5% annually)

When delegating I can imagine that you get a more or less fixed and consistent amount per month, but when solo-baking probably not that consistens (some times a lot more and some times a lot less). Or am I mistaken? I just don’t want this to be centralized in pools like PoW mining…

Thank you for the replies


#2

Great questions. We are all learning about baking together! 1st to know, you need to have at least 10k XTZ - a “roll” - in order to bake yourself. Less, and you should delegate your baking.

Solo baking means you keep everything you get from the baking and endorsing. Theoretically, you will over time receive the same rate of return with self baking a small number and a large number. The problem will be lumpyness of the random nature of selection.

Larger bakers will be selected more often and will have a more consistent return.

As far as being deactivated - I dont really know the metrics here yet. For every given baking cycle, multiple bakers are selected in advance, and if you miss a cycle, the baking opportunity moves to the next baker.

From a delegation perspective, each delegator will have different value propositions and will probably charge different fees.


#3

Thank you for answering Jonas.

So i guess the best way to find out, is to put a role up for solo-baking in one instance, another role in a second instance and delegate the rest in the same proportions to the delegation services. After time you then can compare the results. Although I must say, I would prefer a more decentralized approach then to just delegate to a pool, which inevitably will lead to a lack of decentralization.

@Community: Did someone try this out in the alphanet? Are there results to compare?


#4

I completely agree with Jonas.
It is a bit like cooking, I mean a real meal. You can read all kind of recipes but until you actually try the food you will never know how it tastes, whether you actually cook it or you go to the restaurant it is up to you.
The only difference (figuratively speaking), is that no one has prepared this meal yet.

Comparison between the two options would be interesting. When you go solo (small pot) statistics becomes significant over a longer period of time, while delegate services have a bigger pot with a more steady baking/staking output per unit of time. My guess is that over a long period of time the two options are equivalent (minus the delegate fees). I am not sure it makes sense on the alphanet since there is no distinction between delegates and solo-bakers, you can create as many accounts as you want and delegate to yourself any small or large amount of tezzies.


#5

Hi Sorry Completely Newbie Here 2.8k XTZ what do you recommend for me ?


#6

With 2800 XTZ you are forced to delegate your stake, because you can’t get a whole role for yourself.


#7

Another Newbie here, Its great to see that Tezos is getting some traction ! Im trying to get my head around the baking and its limits. Do you need to put up a bond to bake ? E.G Do you need to put up 10K of tezzies to bake and 1K as a bond ? - Ive about 10K in total.


#8

Yes. There is a bond requirement which currently is about 5% of the amount you are staking. When you delegate your tokens, they are not used for bond. Instead the Delegation service has to have enough XTZ to cover the bond for all of the tokens delegated to them.


#9

I’m sure i read somewhere that rolls would consist of 650XTZ


#10

I lost touch with this debate because of the Swiss drama. Simple question, details aside: baking is done by my machine or does it require my time and attention?
Thanks.


#11

Thanks Jonas. Is there any guides on setting up a validator ? I have access to financial, technical and marketing resources and am looking for a project.


#12

You do not need to wake up early to bake :slight_smile: Baking is an automated process once you have your machine configured. Of course, you will want to have monitors in place to alert you if things stop working.


#13

Setting up a baker is a tribal knowledge process at the moment. Best places to get started are:

http://doc.tzalpha.net/
https://riot.im/app/#/room/#freenode_#tezos:matrix.org
And various threads on this site.


#14

Cheers Jonas. Am downloading the alphanet blockchain now and will have a play. Another question if you dont mind. Is there a minimum number of delegates or maximum % of rewards per bakers/delegate to mitigate against centralisation ?


#15

Great. Thanks, Jonas. And thanks for the great work you’ve been doing. I expect in due time there will be user-friendly instructions on how to configure the machine.
Best regards.