Recently we have seen a couple of services that offer so called “One Click” hosting solutions for Loki Service Nodes. We thought it would be a good idea to flag these types of services and explain why current and future Service Node stakers should avoid them.
Let’s define the terminology.
One Click Node – Any node service that requires you to send them Loki to operate a node.
Service Node Pool – Node services where you retain full access to your funds but do not run the Service Node yourself.
Firstly, I want to explain some of the issues associated with “One Click Nodes.” It should be clear to most users that any service that requires you send them Loki directly should be treated with extreme caution. Loki has specifically designed a system so that you can stake for a node without your funds ever leaving your wallet. This is a case for both pooled and solo Service Nodes.
It’s important that you understand that the process of staking will always involve the ‘register_service_node’ command being run in your wallet. Anyone trying to claim that to stake a node you need to send Loki to their address could possibly be scamming you. Even if the service is operating honestly, just by holding your Loki they make themselves a target to hackers who would seek to steal your funds, and the funds of other people.
Although most Service Node stakers understand the risks of sending Loki to other parties, there are some more subtle risks that also apply to Service Node pooling.
Users who choose to forgo operating their own Service Node sacrifice network decentralisation. The more individuals we have running nodes from different jurisdictions, the more resistant the network is to attacks that target individuals or attacks that seek to gather the stakes of legitimate users.
The ideal case for the Loki Service Node network would be for each node to be a operated by a separate, disparate actor. Obviously, this does not reflect reality and we understand that there will be node operators seeking profit. However, it is important that we don’t let this get out of hand and allow a small number of node operators to control a large portion of the Loki Network without having to stake a large amount of Loki themselves. The Loki core team have introduced measures which require each pool operator to stake at least 25% of the node balance to prevent fully delegated stakes.
It’s also important to remember that running your own Service Node is going to be cheaper than using an operator who is going to charge a % fee which is taken in Loki.
You might think that running your own Service Node is difficult – it may be easier than you think. Over the past few months, we have been making some significant improvements to make running a Service Node easier:
- Configuring Service Nodes to run as a system service by default (meaning improved reliability if your VPS shuts down)
- Implementing infinite staking which means no more manual restaking and no more leaving a wallet open to autostake.
- Improving RPC functionality for the loki daemon so that you can generate registration commands remotely
These improvements will be released over the coming months. Now is a better time than ever to get into the game and run your own Service Node instead of relying on someone else.