How should you think about selecting an FTSO data provider? There are many important factors to consider. When you delegate your tokens to a data provider, you are delegating your vote power and trust. The delegation action is your voice, as a user in the Flare ecosystem.
Let’s take a look at an FTSO dashboard, such as the Flare FTSO Monitor. The main view offers a few metrics that you can use in your selection process, we will go through a few of them here.
The success rate represents how often a data provider has submitted prices inside or on the border of a reward band. The reward band is calculated from all data provider submissions and will vary. The success rate is generally calculated by giving a full score for submissions inside a reward band and half score for the border; border submissions are rewarded at random. The score is then divided by the number of price pairs and epochs. On this dashboard, the availability is calculated over the last six hours.
During each price epoch, a random price pair is rewarded. All data providers that submitted prices inside or on the border of the reward band during that epoch will be rewarded and their reward rate will increase. Since the rewarded price pair is chosen at random, there is not a one-to-one relationship between the reward and success rate, but a high success rate enables a high reward rate.
The availability metric should be as high as possible. If the value is below 100%, it means that the data provider has failed to submit a price for some epoch(s). They could fail to do so because of multiple reasons, unstable pricing algorithms or unsecure data sources among others. On this dashboard, the availability is calculated over the last six hours.
All token holders can wrap and delegate their tokens to one or more data providers. The sum of all delegated tokens to a data provider makes up the vote power. The vote power is used to determine each data provider's weight, which in turn is used when determining the value of a price pair.
Is that it? No, not really, but it’s a start. The bottom line is, you need to choose who to trust. The above metrics says something regarding the accuracy, robustness and other user’s trust but should not be only things to consider. Make sure to check out who is behind a data provider, check their website, twitter and so on. Also, monitor your choice continuously, choosing a data provider should not be a set-and-forget procedure.