Net yield edge of running solo vs delegating

How commission eats the delegated path

Each row is a different pool commission at your inputs. The solo net APR is fixed by your slashing and operating drag; the delegated net APR falls as the commission rises. The break-even row is where the two paths pay the same — below it, delegating wins; above it, running your own validator does.

CommissionDelegated net APRSolo net APRWinner

The full reward, minus what it costs to keep it

Staking looks like a single headline APY, but that number hides two very different businesses. Running your own validator is a small operation: you keep every token the protocol pays out, including the execution-layer income — the MEV and priority tips that flow to whoever proposes the block — and nobody takes a cut. The price of that is real. You are exposed to slashing, a penalty that burns principal rather than rewards, and while a single slash is rare its bite on principal makes it worth pricing as an expected annual drag. You also pay to keep a machine online and monitored, and that cost is fixed in dollars, so it quietly halves your yield on a small stake and barely dents a large one. Delegating flips every one of those trade-offs: no hardware, no minimum, slashing socialised or insured away — in exchange for a commission that is a fixed percentage of your rewards forever. The honest comparison is the two net APRs, and the number that decides it is the break-even commission printed above. If your pool charges less than that, the convenience is also cheaper; if it charges more, you are paying a premium for hands-off. Size the plain reward first with the staking rewards calculator, weigh staking against simply holding with the staking vs holding calculator, and if you are looking at restaking on top, price the extra slashing surface with the restaking risk calculator.

The math

Write the gross reward APR as g (issuance) and the execution income as e (MEV plus tips), so the raw yield either path earns before costs is g + e. The solo path keeps all of it but subtracts two drags. The expected slashing drag is the annual slash probability p times the penalty fraction k: p·k, expressed in percent — it treats the loss of principal as a yearly haircut on return. The operating drag is your fixed dollar cost divided by the dollar value of your stake: opex ÷ (amount · price) · 100. So solo net APR = (g + e) − p·k − opex-drag.

The delegated path has no slashing or operating drag to you, but the pool skims a commission c on the whole reward: delegated net APR = (g + e) · (1 − c). The edge of going solo is the difference between the two. Setting them equal gives the break-even commission, c* = 1 − (solo net APR) ÷ (g + e) — pay less than this and delegating wins. Because the operating drag shrinks with stake size, there is also a break-even stake: solo beats delegating once amount ≥ opex · 100 ÷ [price · ((g + e)·c − p·k)]; if the pool's commission earns you less than your own slashing drag costs — that is, if (g + e)·c ≤ p·k — no stake size makes solo worth it. The dollar figures apply the net APR over your holding period as value · netAPR/100 · days/365. This ignores compounding within the period, reward-rate changes, and the tax treatment of staking income, so treat it as a clean before-tax comparison of the two structures.

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