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I would like to ask about tezos that I delegate to a master node. Is there any risk if the master node misbehavior with the system?

Thank you!

  • In Tezos, nodes which generate new blocks are called 'bakers'. Also 'delegates', and 'validators', though most commonly you'll see 'baker'. – utdrmac Jul 24 '20 at 14:00
  • @utdrmac non baking nodes are still validating the chain so they are not producing blocks. So validating and baking nodes are two distinct concepts. – Ezy Jul 25 '20 at 7:35
  • What do you mean by master node? Tezos does not have a concept of "master node" like other staking coins. There are just nodes, then a baker runs by connecting to that node and validates(bakes) and endorses blocks. You delegate your Tezzies to that baker through a smart contract. – Mack Baise Aug 7 '20 at 5:34
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In tezos the block producers are called “bakers”, not masternodes. And if you delegate to a baker you are called a “delegator” (the baker being called the “delegate”).

That being said is as explained above when you delegate your tez to a baker your staking rights are pointed to the baker for the purpose of assigning slots for various operations related to baking (baking, endorsing eg) but no actual transfert of capital occurs between you and the baker which is why your capital is safe since the baker has no control over it.

Now on the other hand the delegate receives inflation rewards for their work and usually shares the proportion of these rewards (minus a fee) with their delegators. To the extent that this sharing of the rewards is controlled directly by the baker itself, it is subject to counterparty risk so any of the following can happen to it:

  • the baker may decide not to pay
  • the baker may be subject hack/theft and find themselves unable to pay
  • the baker may be misbehaving (intentionally or not) with respect to its onchain duties (double baking, double endorsing) and lose rewards and part or all of its “baking bond” which could impact its ability to send rewards to its delegate.

So for all these reasons in tezos the capital allocated to baking from a delegator to a baker is free of counterparty risk but the inflation rewards are not.

For more information about tezos pos you can read the following

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In Tezos, we use the term 'baker' for a node which creates new blocks. When you delegate your tez to a baker, the tez remain 100% in your control and are not locked up for any period of time. If the baker misbehaves, you are in complete control to move your delegation to another baker at any time. Your tez are never at risk.

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There is no risk to you , however you should redelegate your coins because that baker will lose his bond and also lose baking rights meaning you probably won't receive rewards. Plus a shady baker like that shouldn't be trusted with your delegation. Your Tezzies won't be effected if they are just delegated.

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