Self-Hosted Validators vs Validator-as-a-Service: Best Option for Staking

Understanding that running a validator node is not essentially risk-free highlights the reason why available options must be carefully considered. For instance, validators are required to stake a certain amount of native tokens to run a validator node in an ecosystem. This particular system allows them to lock up tokens, validate blockchain data or transactions, and earn rewards. Also, where validators compromise the security of the ecosystem or act with bad intentions, they are punished with a token slash.

If you intend to earn cryptocurrency through staking rewards, you can explore two options. One is the stake token directly in the ecosystem, host and run your node and earn reward. Alternatively, you can choose to stake your tokens with validator-as-a-service providers like Chainnodes to earn rewards.

Each of the options comes with its distinct pros and cons, requiring a proper understand the mechanisms in play before opting for any of them.

Now, let's examine the benefits of self-hosting your validator nodes and staking with service providers. Irrespective of the option you decide to go with after a good read of this article, the good part is that Chainnodes provides the most effective and efficient node services that allow you to stake efficiently and earn rewards.

Benefits of Running A Self-Hosted Validator Node

The ultimate benefit of running a self-hosted validator node in the web3 space lies in the level of control you enjoy over your staked asset. Unlike staking through service providers, running a self-hosted validator node on a cloud server or personal hardware like the Chainnodes Solo Staking Validator Node ensures that you control staking, earning, and accessing your fund.

This means that you can facilitate withdrawal into your wallet, earn rewards without paying high commissions to any service provider, and manage staking terms according to the ecosystem's policies. However, while this level of control attract many users, running a self-hosted validator requires an technical knowledge and understanding of blockchain, making it a staking approach that is more suitable for a blockchain/crypto expert than a newbie.

What to consider before running a validator node:

Cost: Running a validator node may require high upfront costs because you need to get a validator hardware that meets the specifications required by the ecosystem of your choice. Additional financial resources are also used to achieve bandwidth and maintain the hardware.
Technical Expertise: Again, a self-hosted validator node usually requires considerable technical expertise because you control the entire system. Hence, managing uptime, confirming network configuration, and resolving any issues that you encounter are done individually.
Risk-Tolerance: running a self-hosted validator node requires skills and competence as it exposes stakers to risks like downtime, security breach, and slashing

To counter this, you can opt for the Chainnodes affordable solo staking node for $799. With an easy setup process, optimal configuration, slashing protection features, and durable compartments, it is suitable for both crypto experts and newbies without deep technical knowledge.

Benefits of Staking with Validator-as-a-Service Provider [VaaS]

A Validator-as-a-Service provider is an intermediary between you and a blockchain ecosystem. This entity runs the validator node on your behalf; hence, the service provider operates the entire process of setting up the node and managing its operation while you are required to stake your crypto assets and earn rewards. The VaaS provider earns a commission on the reward paid by the ecosystem.

When staking with a VaaS provider, you don't have to be worried about things like ecosystem requirements or system configuration, as all of this is entirely managed by the service provider; however, choosing the service provider to opt for must be carefully considered.

What to consider when choosing a VaaS Service Provider

Accessibility and Management: Asset management is essential and must be considered. Usually, tokens staked with a VaaS Provider are staked through a smart contract only the service provider has access to, which means after staking, you may no longer have full control over your fund. However, some service providers give you access through the staking dashboard and withdrawal address. These ensure that you can see how the staked asset is managed, know when to unstake, and access your tokens through the withdrawal address.
Service Fees: Using a VaaS typically involves service fees, which vary among providers. These fees cover the cost of infrastructure, maintenance, and support services. Stakers should evaluate these fees against potential rewards to determine the overall profitability of staking through a VaaS.

Aside from its competitive service fees, extensive staking dashboard, and easy-to-use interface, Chainnodes, as a VaaS service provider, operates a distinct staking server where users can view details like block validation, block details, and rewards earned per block. This improves system transparency and ensures that stakers are carried along throughout the staking period.

Conclusion

Choosing the best options between the two depends on individual preferences, technical abilities, and risk tolerance. While Stakers seeking complete control and security may opt for self-hosted validators, staking through VaaS remains one of the best approaches for stakers who prefer a easy-staking process without the deep technical knowledge.

Running a validator node already? Check out our article on the best security practices to put in place here