Overview
What You Need
- On-premises or Virtual Machine in the Cloud matching the requirements (Hardware Requirements)
- A full node (synced with parachain and relay chain block history)
- Substrate (SS58 format) account to stake funds and get rewards
- Minimum staking balance to be included in the collator set (50,000 $KREST)
- Session key
Alternatively, you can avoid setting up krest node yourself and use OnFinality (How to setup krest collator with OnFinality?)
Collator process
- Ensure that you have a machine matching hardware requirements and an SS58 Substrate wallet with 50,000+ $KREST tokens
- Set up a node
- Generate session key
- Link session key to collator account
- Stake tokens and join the collator candidates pool
- Check whether you were included in the active set
Possible profitability of running a collator node
Currently, the cost of running a collator node on AWS VM is ~\$250 per month (further savings could be reached by adopting 1+ year payment plans). The minimum stake is 50,000 \$KREST tokens (~$2000 at the time of writing this article).
The rewards, which the collator can expect considering the above depend on the number of delegators and their combined stake, as well as on network activity and the amount of txn fees paid by network users.
Let's model the most conservative scenario: combined stake of delegators is 50,000 $KREST tokens per collator, network activity is 0.01 TPS in the first year and there are 16 collators in the active set. In this case, our collator node rewards will be calculated the following way.
Total rewards per day
(400mil*2.5%inflation)/365 + 0.01TPS*86400*0.00003125$KREST fee per txn = 27402 $KREST =~$1100
Collator/Delegator rewards per day
30%*27402 $KREST =8220 $KREST =~$328
The reward of our collator node per day
8220 $KREST * 50,000 $KREST* 8/ (50,000 $KREST* 8 +50,000 $KREST)/16 = 456 $KREST = ~$18.24
Meaning that in a year of running a collator node, total costs are \$250*12months = \$3000 and total revenue is \$18.24*365= \$6,657, resulting in a profit of \$3657 (even without $KREST token appreciation).