Delegation

Canonical reference · Estimated read time: 11 minutes

What delegation is

In a proof-of-stake blockchain, validators are the nodes that produce blocks and vote on consensus. To participate, validators have to put up collateral — they "bond" tokens that can be taken away (slashed) if they misbehave.

Delegation lets you put your own tokens behind someone else's validator, sharing in the rewards they earn — and the penalties they incur. You don't run any software. You don't manage any keys beyond your normal wallet. You point your stake at a validator and let them do the work.

• Validating — you run a node, keep it online, respond to consensus rounds, take operational responsibility, earn the full reward.
• Delegating — you pick someone who is already validating, give them your stake to count toward their voting power, earn a portion of what they earn.

Why it matters for Valdium

Valdium's foundational goal is real decentralisation — not the kind where 21 well-funded nodes call themselves a network, but the kind where thousands of independent participants share in securing and governing the chain. Delegation is how we get there. Without it, most VLD would sit idle, the validator set would be limited to the technical-and-wealthy intersection, and token holders would have no aligned interest in network health.

How it works mechanically

1. You hold some VLD in a wallet.
2. You browse validators in the wallet UI, on the block explorer, or via valdium validators list in the CLI.
3. You pick a validator and choose how much VLD to delegate.
4. You sign a delegation transaction — a single tx that bonds your tokens to that validator.
5. Your tokens are now bonded. They count toward the validator's voting power. They're no longer freely transferable.
6. You earn rewards. Every epoch, the validator's earnings are distributed: validator commission off the top, then the rest pro-rata across all bonded stake.
7. You can claim rewards at any time with a withdrawal transaction.
8. You can undelegate at any time. The undelegated tokens enter the unbonding period (~14 days). During unbonding they don't earn rewards but do remain slashable.

A worked example

Imagine a validator named Foothill with 50,000 VLD self-bond, 10% commission, 150,000 VLD delegated, 200,000 VLD total voting power. You delegate 5,000 VLD to Foothill.

Foothill earns 100 VLD in block rewards during an epoch:

1. Foothill takes 10% commission → 10 VLD.
2. The remaining 90 VLD distributes pro-rata: Foothill's self-bond gets 50,000/200,000 × 90 = 22.5 VLD. Your 5,000 VLD gets 5,000/200,000 × 90 = 2.25 VLD.

Foothill total: 32.5 VLD. You: 2.25 VLD this epoch.

Slashing for delegators

If Foothill misbehaves — double-signs, has prolonged downtime — they get slashed. All bonded stake to that validator is slashed proportionally, including delegators. Example: Foothill gets slashed 5% for downtime. Your 5,000 VLD loses 250 VLD.

Without shared slashing, delegators would have zero incentive to pick good validators. Shared slashing is the mechanism that forces delegators to actually care who they delegate to. Delegation is not "risk-free yield."

Parameters

How to choose a validator

• Uptime history. Has this validator been consistently online?
• Slashing history. Has this validator ever been slashed?
• Self-bond ratio. How much of the validator's voting power is the operator's own money? Higher self-bond means more skin in the game.
• Commission rate. Lower is better for delegators short-term, but rates at 0% may be a teaser.
• Commission history. A validator who frequently raises rates is one to watch.
• Total voting power. Delegating to a small validator helps decentralise the network.