Thread by @ThyBorg_

I've worked out the revenue of #Cosmos validators: the average on the Cosmos Hub is around $45,000 per month at current prices, and $100,000 at all-time. These averages come with a huge variance so let's break it down 🧵

First it's important to note that I'm only talking about revenues, not profits. In order to work out the profit, we would need to figure out the costs, and I'll focus on that in a separate thread

Second, I'm only talking about Cosmos Hub validators here. Since most validators operate on several blockchains (e.g #Osmosis, #Juno etc.) their total revenues are much higher. I'll share the results for other blockchains in a separate thread

Third, since validators earn a commission on staking rewards, the revenues in dollars terms are heavily dependent on the price of $ATOM (or $OSMO, $JUNO etc. for other chains). My numbers are from last week and I've included the all-time high for reference

Fourth, $ATOM staking rewards are based on inflation, which itself is dynamically adjusted based on the staking rate. I've taken the staking rewards rate from last week which was about 17%

Fifth, validators are free to set their own commissions. On the Cosmos Hub, the average is 5-10%, but I've given the exact number in the examples below

Finally and most importantly the most significant variable is the number of $ATOM delegated: the biggest validator on the Hub has close to 500x more $ATOM than the smallest validator in the active set. Below are some concrete examples from last week:

StakeFish is ranked n°1 on Cosmos Hub with about 10,922,000 $ATOM delegated. With an APR at 17% and a commission at 4% the yearly validator income is 74,300 $ATOM which is equivalent to $121,200 per month today and $275,100 per month at all-time high

Citizen Cosmos is ranked n°84 on Cosmos Hub with about 302,000 $ATOM delegated. With an APR at 17% and a commission at 12% the yearly validator income is 6,200 $ATOM which is equivalent to $10,000 per month today and $22,800 per month at all-time high

Cosmos Spaces is ranked n°168 on Cosmos Hub with about 28,000 $ATOM delegated. With an APR at 17% and a commission at 5% the yearly validator income is 200 $ATOM which is equivalent to $300 per month today and $900 per month at all-time high

It'll be interesting to work out the costs to see how profitable running a validator really is. In the meantime, these numbers illustrate the importance to delegate to smaller validators, as it is clear that bigger validators are currently able to capture most of the value

Shout out to @libercrypt for asking that question in the first place. If you have a similarly great Cosmos-related question, feel free to leave it in the comments below for me to investigate 🔍 👇

https://twitter.com/libercrypt/status/1519662917897043968

I'm planning to cover the whole #Cosmos ecosystem extensively through educative & digestible threads on governance proposals, airdrops, tokens, teams & projects, so you may also consider giving me a follow @ThyBorg_ ✌️