Performance bonds

A SOL buffer that allows validators with subpar APY join and stay in JPDP

Overview

If your validator’s APY is below the requirement, you can deposit SOL as a performance bond to cover the shortfall. The bond will be used to pay rewards to your delegators while your validator underperforms. This enables onboarding to JPool Delegation Program (JPDP) despite the APY gap and, for validators already in JPDP, allows continued participation while recovering performance.

At the end of each epoch, JPool calculates your validator's APY gap to the Top-10 cutoff (which is Position #10 in the Top-10 list of validators ranked by APY over the last 10 epochs) and deducts its SOL equivalent from your bond balance. The deducted amount equals this shortfall. For example, if in the past epoch APY at Rank 10 was 8.6% and your APY was 8.0%, the gap is 0.6%. The bond covers the 0.6% shortfall for the epoch. Drawdowns occur only in epochs when your validator has JPool stake.

All calculations and settlements occur at the end of each epoch. When your APY meets the requirement again, bond usage stops beginning with the next epoch. If there isn’t enough SOL in the bond balance to cover a previous epoch’s shortfall, the user’s stake is slashed proportionately. If the balance is zero, the stake is slashed in full, the validator becomes ineligible and is excluded from JPDP.

Size the bond so several weak epochs can be covered without interruption. Review APY Shortfall and Drawdown after each settlement and top up before the balance becomes critical. There are no alerts for bond events, so periodic checks of the Performance Bond page are recommended.

How to use bonds

Deposit bond

Step 1. Navigate to Validators.

Step 2. Choose a validator.

Step 3. Press Details.

Step 4. Navigate to JPDP → Performance Bond.

Step 5a. Press Create Account and Deposit Bond if you use bonds for the first time.

Step 5b. Press Deposit if the account already exists.

Step 6. Enter the amount of SOL you want to deposit as a bond.

Step 7. Press Deposit.

A confirmation pop-up will appear and your bond balance will increase accordingly.

Withdraw bond

Only an owner of a validator's identity account can withdraw SOL from the bond balance.

Step 1. Navigate to Validators.

Step 2. Choose a validator.

Step 3. Press Details.

Step 4. Navigate to JPDP → Performance Bond.

Step 5. Press Withdraw.

Step 6. Enter the amount of SOL you want to withdraw from the bond balance.

Step 7. Press Withdraw.

A confirmation pop-up will appear and SOL will be transferred from the bond balance to your wallet.