Executive Summary
A delegator is an LPT holder who bonds stake and attributes it to an orchestrator. Delegators do not run infrastructure, but they are economically responsible participants: their stake increases protocol security, shapes capital allocation across orchestrators, and contributes stake-weighted governance power.
Delegation is strictly a protocol-layer (on-chain) mechanism. Delegators do not route or execute jobs; they participate in the on-chain economic substrate that constrains and incentivizes network-layer operators.
Let:
- : a delegator address
- : an orchestrator address
- : stake bonded by toward
- : self-bonded stake of
Total stake attributed to :
Total bonded stake:
Delegator stake changes protocol accounting state (bonding attribution) and therefore stake-weighted reward and governance outcomes.
2. Architectural Context
2.1 Protocol Layer (On-Chain)
Delegators interact with protocol contracts that:
- track bonded stake per address
- attribute stake to a delegate (orchestrator)
- enforce unbonding delays
- allocate issuance (and, where applicable, fees)
- compute stake-weighted governance power
Canonical contract addresses and networks are published in the contract registry.
2.2 Network Layer (Off-Chain)
Orchestrators operate node software and infrastructure (GPUs/compute, routing, ops processes) to execute work. Delegators are economically coupled to operator performance and behavior, but do not control execution pathways directly.
3. Economic Role
Delegators serve three protocol goals.
3.1 Security Participation
Security cost scales with total bonded stake:
Delegators increase , raising the economic cost required to capture stake-weighted outcomes.
3.2 Capital Allocation
Delegation redistributes stake across orchestrators, shaping operator market structure.
Orchestrator weight:
Delegators selecting increase , affecting issuance allocation and governance influence.
3.3 Governance Participation
Voting power derives from bonded stake. For a participant :
Delegators therefore influence protocol parameter changes, upgrades, and treasury decisions.
4. Reward Model (Issuance and Fees)
Per round , protocol issuance:
Orchestrator gross issuance allocation:
Delegator net issuance allocation with commission :
Delegator total return decomposes into:
Issuance is protocol-determined; fees are market-driven (network demand).
5. Rights, Constraints, and Responsibilities
5.1 Rights
Delegators can:
- bond and delegate stake to an orchestrator
- unbond stake (subject to protocol delay)
- rebond during the unbonding window
- withdraw stake after the unbonding period
- claim/rebond rewards depending on protocol mechanics
5.2 Constraints
Delegators cannot:
- accelerate unbonding beyond the protocol-defined delay
- guarantee job flow or fee revenue
- override orchestrator operational decisions
Delegation is capital exposure without operational control.
5.3 Responsibilities (Practical)
Delegators should monitor:
- commission rate
- reward checkpoint consistency
- stake concentration and decentralization
- governance proposals affecting inflation/security parameters
Delegation is best modeled as long-duration capital allocation.
6. Evaluation Framework for Orchestrator Selection
Delegator selection is multi-objective.
Define a delegator utility function:
Where:
- is reduced by commission
- captures checkpoint consistency and operational stability
- penalizes already-dominant stake share
- reflects long-term stewardship preferences
7. Risks and Failure Modes
Delegators face a layered risk profile.
- Commission risk: higher reduces net returns.
- Checkpoint / realization risk: realized issuance can diverge from theoretical allocation if checkpointing is not performed.
- Liquidity risk: unbonding delay restricts exit.
- Concentration risk: systemic exposure increases with stake centralization.
- Slashing risk (if enabled): stake may be reduced under defined protocol conditions.
8. Diagrams
8.1 State Model
8.2 Reward Flow
9. Protocol vs Network Separation
Protocol (On-Chain): bonded stake accounting and attribution, issuance and stake-weighted allocation, unbonding delays, governance voting power.
Network (Off-Chain): job execution and routing, fee generation, operational performance and uptime.
Delegators participate in protocol economics; orchestrators participate in network operations.
References
Last modified on March 20, 2026
