Validator
Validator: A validator is a participant on a proof of stake blockchain that checks transactions, votes on new blocks and sometimes proposes them. To take part, a validator locks up the network’s coins as a security deposit. Honest work earns rewards, while going offline or breaking the rules can cost part of that deposit.
What a validator does
On a proof of stake network, validators take turns proposing blocks and attesting, or voting, that other validators’ blocks are correct. A validator is run by software on a computer that stays online and connected to the network, controlled by a key pair. Validators do the job that miners do on proof of work chains, without the energy-heavy puzzle.
What a validator stakes
On Ethereum, running your own validator requires 32 ETH, according to ethereum.org’s solo staking guide. That stake is the guarantee of good behaviour. Other networks set their own requirements, and many let token holders delegate coins to a validator instead of running one themselves.
Rewards and slashing
Validators earn rewards in the network’s coin for doing their job, as described in Ethereum’s proof of stake documentation. Small penalties apply for being offline. Serious faults, such as signing two conflicting blocks, trigger slashing, where part of the stake is destroyed and the validator is removed. Reliable setup matters as much as the stake itself.
What it means for investors
Most investors never run a validator. When you stake through an exchange, a pool or a liquid staking token, someone else runs the validator for you and takes a fee, and you rely on them to stay online and avoid slashing. Staking rewards may count as income for tax; see the ATO’s staking guidance. This is general information, not tax advice.
Frequently asked questions
How much ETH do you need to be a validator?
Running your own Ethereum validator requires 32 ETH. With less, investors can stake through a pool, an exchange or a liquid staking token.
Is a validator the same as a node?
Not quite. A node is any computer running the network software. A validator is a node that has staked coins and takes part in proposing and voting on blocks.
Can a validator lose money?
Yes. Validators can be penalised for downtime and slashed for serious rule breaks, which destroys part of their stake.