Avalanche Validators Prioritize APY Over Total Income in Staking Decisions

A new analysis of Avalanche's P-Chain data reveals that validators prioritize annualized yield (APY) over total staking income when making decisions. This insight could significantly influence upcoming protocol changes, including proposals to lower the minimum staking duration and adjust staking reward parameters.

The study highlights a crucial distinction: validators optimize for APY rather than total period income. Simulations show that reducing the min_consumption_rate from 0.10 to 0.08 encourages validators to stake for longer periods, with an average duration increase of 68% (from 10 to 16.9 weeks).

Delegators, on the other hand, favor higher APY, shorter lock-up periods, and larger validators, seeing these as more reliable. During volatile market conditions, delegators become particularly averse to long lock-ups, further underscoring the importance of APY in decision-making.