...Neither. lol
They gotta have some sense of realism, obviously (gotta seem real with their motivations, behavior and whatnot), but at the same time, if a villain is done well enough, even that isn't really necessary (i.e. Johan Liebert from Monster). I've gotta be able to hate them as a person, but at the same time, feel awed by them as a character. And, of course, they gotta pose a real challenge for the protagonist, whether that means being more powerful initially or scarring them psychologically.