In the previous article, I wrote briefly about Proof of Stake (PoS). But as you start to get more crypto-curious, it’s good to know some of the basic building blocks of what makes different chains unique.

Why Proof of Stake?

The cost of running the software to “mine” tokens is expensive, both in computational resources and natural resources.

Additionally, Ethereum, a popular PoW chain that is migrating to PoS, has faced criticism because of the high cost of processing transactions on the network. Transaction fees and transaction processing time are high due to the network’s limited capacity to handle many users.

In PoW networks, when users transfer tokens across wallets, the transaction fee goes to the miners who processed it (known as gas). As more people use the network, transaction fees increase. Additionally, as more people use the network, the time it takes for transactions to be processed on the network increases, up to days or weeks.

There are three main participants of every PoS network: token holders, people who hold on to PoS tokens in wallets; Delegators, who lend their tokens to Validators; who run the software to verify and sign blocks.

PoS networks don’t require as much computing power because verifying transactions is shared proportionally amongst the Validators on the network. Unlike in PoW, there isn’t a competition between nodes to create blocks. The protocol selects validators to create blocks based on the proportion of tokens that they have bonded to the chain. A validator that has 3% of the tokens can, theoretically, validate 3% of blocks.

Validators can receive tokens from on the network who don’t run Validators. In return, Delegators also share in the rewards.

The more stake a validator has on the network, the more likely they will be selected to create a block. The more blocks created, the more rewards Validators earn.

Three main interactions happen on a Proof of Stake network between these three groups of users.

1. Token holders can agree to delegate (also known as bond or lock-up) a portion of their tokens to nodes.
2. Validating nodes then verify transactions on the network and produce blocks. In return, the network distributes rewards to Validators for their work. Validation and creation of blocks require computational power and technical skill.
3. Validators share these rewards with their Delegators. These rewards are the incentives to stake tokens. If token holders do not delegate their tokens, they do not participate in this process and don’t earn rewards.

Why stake your tokens?

Initially, the token is staked to earn new issuance (also known as inflation) subsidies. That means that token supply will increase, and stakers will obtain the newly issued tokens by receiving rewards. Generally, you can earn around 8–20% annually on your staked tokens (APY). This depends on the protocol’s issuance rate and the percent of the network that’s been staked. Those two numbers change over time. We’ll talk a little bit more about what those are in a second.

Variations of Proof of Stake

People are developing more and different versions of PoS, such as Tendermint (from Cosmos Hub), Ouroboros (from Cardano), Tezos, and Dfinity. The Tendermint algorithm has the same general rules regarding rewards and risks, so networks that run on Tendermint will have the same rules at launch.

As the network grows, the individuals can change these rules’ parameters after the network has launched. Every participant in the ecosystem can get together to change the rules of the protocol through the community governance process. But usually, only token holders have the ability to vote and formalize these changes.

Nodes + Clients on Proof of Stake networks

As decentralized networks carry different types of value, they require different nodes to run on the network. If you’ve looked into different protocols in a communication channel like Discord or Twitter, or if you’ve read a whitepaper or two, you might’ve come across the words nodes or clients in reference to the underlying structure of the blockchain itself. Nodes and clients make up the architecture of a blockchain network.

Basic Proof-of-Stake blockchains usually contain, at the very minimum, full nodes, validating nodes, and archive nodes. After that, it will vary based on the chain. Nodes are software that can run on a computer. Typically, there isn’t a cap on how many nodes can support a chain.

1. Full nodes carry the full copy of the blockchain and verify transactions on the network. So long as a computer has the bandwidth and space — any machine can run a full node. Although because of their requirements, they are usually stored on servers and bug computers.
2. Archival nodes will store the entire balance history of any account on the chain, including storing every state change in the network. These nodes do not process transactions or provide additional security the way that full nodes do.
3. Validator nodes are necessary for PoS networks. These nodes validate transactions and create blocks. In return for their work, active validating nodes receive rewards for their efforts. To be an active validator, nodes need a number of tokens (known as stake) that either the validator themself, or the token holders have bonded. It will depend on the protocol requirements.

Common Types of Nodes + Clients

While the previous nodes are necessary for running the chain, protocols may run other types of nodes depending on their service. Remember that nodes are just software on a peer-to-peer network. Some other common types of nodes out there that you might see include:

1. Light nodes (also known as light clients) only carry parts of the blockchain. The exact number of blocks that are stored on the light node is protocol-specific. A month’s worth of blocks that have been produced can be stored on the light node.
2. Relay nodes connect validating nodes and other nodes in the network. They are responsible for keeping lines of communication open for transactions. A node needs to accept incoming connections on a publicly accessible port, and the node’s public IP address and assigned port need to be registered with the protocol’s network.
3. Proxy nodes are nodes that function between the validating nodes and validating nodes. Sentry nodes protect validating nodes from attacks by shielding them from the public internet.

These nodes build up the rest of the chain. Different protocols will have other nodes depending on the chain’s structure or depending on the use. These aren’t fundamental knowledge to delegating nor interacting with the chain on a case-by-case basis.

Exploring the Network

By exploring the network using a UI/UX interface, we can see some of the metrics that matter to PoS networks. Hopefully, I can give a bit of background into what to look for in a PoS network and reveal some of the underlying infrastructure that makes PoS networks work.

Like with PoW, users need to access a wallet (and obtain some cryptocurrency in the process) of the network in question. This isn’t a necessary step to exploring the network, but it is a helpful one. You’ll also need to track down a block explorer for the network. We list all compatible wallets and block explorers for all the networks we’re running nodes for on our website.

Anyone can build these tools. In fact, teams often rely on community members to build them. Because anyone can build wallets and block explorers, it’s good to double-check with the network in question. They may have the block explorer and wallets they’ve endorsed on their website or in their discord channel.

To explore the Cosmos Hub (ATOM) chain, we recommend using the Keplr wallet and the block explorer, Mintscan. Mintscan looks like this:

Mintscan is particularly helpful because it includes information from CoinGecko about the price of Cosmos’s token, the ATOM — including market cap and 24 volume.

Block explorers will include the following:

1. Block times — the measure of time it takes to create a new block. Faster block times equal the quicker transactions are processed.
2. Block height — the number of blocks that have been created until this point. The larger the number, the healthier the chain.
3. Bonded tokens or percent staked — the number of tokens that have been bonded to the network. 64.43% of the existing ATOM tokens, or 174 million of the 271 million tokens, have been delegated to Validators to secure the chain.
4. Inflation rate — the rate that tokens are scheduled to be issued, currently at 7.01% a year.
5. Not included on this block explorer but what is relatively common in these networks are epochs. Epochs are a measure of time where a certain number of blocks have been produced.

If we navigate to the Validators or staking interface, we’ll see some of the statistics specific to PoS networks.

Searching for Figment’s validator, we can see some information that’s good for Delegators to know. Voting Power refers to how much sway Figment has when we vote on proposals on network changes through a system of governance. On Cosmos Hub, voting power is proportional to the amount of stake we have bonded to the network — currently, 2,982,138 ATOM = 1.71% of stake on the web. More stake = more say in network decisions.

This also includes uptime, the number of blocks that we are available to sign. Uptime signals how often our validator is online and ready to work (100% of the time). Our commission is 9%. When the network distributes rewards to Figment, we take 9% of the rewards distributed to you. Validators take a bit of commission to offset the costs of running the infrastructure to secure the network.

There are some technicalities with staking tokens; now some of these questions are protocol specific, so if you want to start staking with a network that Figment doesn’t support, these are some good questions to find out before you start.

How long does it take to stake & unstake the token?

Sometimes it takes a bit of time before your delegated tokens can start earning rewards. On the Cosmos Hub, if you start delegating, you’ll instantly start earning rewards. But, when you want to withdraw those tokens, exchange them, switch Validators, or just stop staking, it will take 21 days.

Staking and un-staking usually rely on the number of epochs that have passed. After a certain amount of blocks have been created, the protocol will box those up, send out the rewards, and start a new epoch. Epochs can be days, weeks, or hours — it depends on the protocol.

Can my staked token be slashed (seized or destroyed)?

Validators are penalized for their bad behavior. Common behaviors that can get a validator slashed are downtime and double signing. Validators may also be slashed for violating the rules of the protocol. Downtime means that if a validator is offline for a certain amount of blocks, the network will automatically take a portion of their stake away. Double-signing means that if a validator signs a block twice, they might also be slashed.

For example, on the Cosmos Hub, and often other networks that run on Tendermint, slashing happens in two ways. 1) If you delegate to a validator that is offline for over 20 hours (assuming a 7.22s block time), you will lose 0.01% of the tokens you have delegated to that validator. 2) If you delegate to a validator that signs the same block twice with the same key, you will lose 5% of the tokens you have delegated to that validator.

Is staking income liquid or automatically staked?

When rewards are distributed to Delegators, they’re either liquid, meaning they will be able to be withdrawn, or they will be “re-staked,” where the rewards are automatically added to your stake. If they are “re-staked,” they are subject to the same unbonding period as the rest of your stake. This depends on the protocol.

For example, On the Cosmos Hub, staking income is liquid, which means you can withdraw your rewards to use at any time, but you will need to delegate them if you want to add them to your existing stake. Reward income is not automatically staked.

How are rewards disbursed? Do I have to re-delegate rewards for compounding?

Rewards may be given out on a per-block or per-epoch basis. Sometimes the protocol will automatically pay them out to Delegators and Validators simultaneously. Sometimes, Delegators need to claim their rewards, and sometimes the Validators need to claim rewards and distribute them to Delegators.

It’s good to keep track of how rewards are paid out because there are protocols out there where if Delegators don’t claim their rewards within an epoch or two, they will lose them. If the protocol dictates that validators are supposed to give out rewards, and you haven’t received any, consider switching Validators.

Can I lose potential staking rewards?

Sometimes a protocol will have additional penalties for Validators outside of slashing. If they are offline for a significant amount of blocks or have actively engaged in malicious behavior, they can be kicked out of the active set or “jailed,” and Delegators will not earn rewards. In the Cosmos Hub, this is roughly 20 hours.

Picking a validator to delegate to may require you to ask questions like: have they been slashed recently and what’s their uptime? If Validators have an identity on the network, you might be able to find them on Twitter or get on a mailing list to receive information from them.

We have previously written about the relationship between the rewards of staking and the inflation rate. It’s a good breakdown of how rewards are calculated and how rewards change over time. It’s not technically a part of this series, but it’s the logical next stop for token holders looking to understand rewards’ underlying economics (and Cosmos Hub).

There are some risks to staking as well, which will be the following article to look forward to. In the meantime, you can find me on Twitter.

Originally posted at https://www.figment.io/

Proof of Stake Infrastructure was originally published in Figment on Medium, where people are continuing the conversation by highlighting and responding to this story.

In the face of centralized VPN services intentionally hosting the data of their consumers and then being hacked, VPN providers must cultivate trust with their consumers. Just as how banks serve as an intermediary between two people, VPN services are a centralizing service between users and servers. Consumers have to trust that this product will protect their privacy.

Sentinel’s goals are not just to build a decentralized VPN service, but an entire framework that developers can use to build decentralized VPN services for mainstream users.

What is Sentinel?

At its core, Sentinel is a decentralized p2p bandwidth distribution network built on Tendermint and the Cosmos SDK. Sentinel gives anyone the ability to monetize their bandwidth by devoting it to the Sentinel network. The amount of bandwidth given and used by network participants is metered and confirmed by Sentinel’s set of validators.

Sentinel has their own form of consensus called “Proof of Bandwidth” where the protocol ensures that there is enough bandwidth provision from the service provider for the user. This will also form a transparent record of quality of bandwidth service. This data will be used for slashing the provider if they have violated their service-level agreement.

One of Sentinel’s most important features is the on-chain query. A connection between a user and the exit node can be established without the requirements of connecting to an intermediate server. Users will be able to query all nodes that are available by reading data on transactions from a list of available servers. This query also means that users will only be communicating with the chain, and never servers.

Sentinel will also be employing a relay network to encrypt the user’s IP address through the network to the server.

Proof of Bandwidth

The network has a proprietary form of consensus called Proof of Bandwidth. Because anyone can host a node with what space they have on their computer, it’s vital that the network be able to verify that a node has enough bandwidth to support the network.

Currently, the process starts by requesting bandwidth signatures from the service provider and the service user. These bandwidth signatures are messages that consist of the bandwidth in the P2P connection within a pre-configured period of time. The service provider and the user each sign their messages with a private key, and then the messages are stored on the chain. If there is a discrepancy between the bandwidth claims from either signer, the network will close the connection.

DVPN Token

Sentinel’s native token is $DVPN. It will be used for governance and staking, it can also be a form of payment for VPN services and subscriptions.

$DVPN will also be used as a work token. This means that token holders staking the token will be able to earn additional $DVPN as rewards from nodes who provide bandwidth to DVPN applications built on the Sentinel platform.

A part of Cosmos’s Inter-Blockchain Communication means that as more developers build dVPNs on Sentinel, other token holders can use their favorite token to pay for a dVPN service. As Cosmos developers are connecting to other layer 1s, like Polkadot and Ethereum, users will be able to pay for services using an ERC-20 token, ATOM, or DOT.

Economics

Sentinel has a decreasing issuance schedule and a fixed maximum token supply. That means that as rewards decrease, as time goes on, staking rewards will come from transaction fees on the network, opposed to the fixed issuance of tokens. The initial issuance (also known as inflation) rate is currently 49%.

Sentinel is particularly aware of the risks associated with being an early-stage network. The lower the number of tokens that are staked on the network, the higher a network will be is at risk for attacks. To combat this challenge, Sentinel is employing a couple of different strategies throughout the first couple of stages in the network.

During the first period, they will be using a halving-like model, where the issuance rate will decrease by 6% after each epoch. Epochs will be 6 months long. Sentinel will use this model until rewards = 13% annual rate.

After reaching 13% APY, Sentinel will decrease issuance per block until the chain reaches the hard cap of 48 billion tokens. This is known as an exponentially decaying emission curve. The team is trusting that the halving model will have helped drive up the demand of the token and the network will have grown substantially larger by this time.

If you’re unfamiliar, halving is “an event or process that reduces the rate at which new coins are issued or created.” Halving is essentially the periodical reduction of block rewards. This process ensures a controlled and steady supply of the token. Bitcoin uses this process, where block rewards for mining are cut in half approximately every four years. This is good for Sentinel’s token price. The halving model will decrease issuance as demand for the token increases — driving up the price.

There will also be a tiered inflation rate — delegators who have locked up their token for longer amounts of time will receive higher rewards.

If you’re curious about the mathematics on how they’ve designed their token issuance curve, you can check out this blog post.

How Decisions are made on the Network

Sentinel is a Cosmos-based network, so, at least in the beginning, the protocol will follow the same framework as other Cosmos-based chains. Validators will have voting power proportional to the number of tokens that have been delegated to them.

The Decentralized Web

Sentinel will benefit from Comos’s Inter-Blockchain Communication because Sentinel will be able to provide a private network or a dVPN layer for the entire Web 3 infrastructure. Soon we will be able to build dApps that are fully decentralized.

Blockchain technology and cryptocurrency have allowed us to freely exchange value between one another without having to trust a centralized authority, but that is just a piece of our Internet experience. Projects like Filecoin (decentralized storage), Akash (decentralized cloud computing), Handshake (decentralized Domain Name System), Livepeer (decentralized video transcoding), and Sentinel are (re)decentralizing the unique layers of our Internet infrastructure. Your entire Internet experience, not just value exchange, can be decentralized and fully controlled by you.

Originally posted at https://www.figment.io/

Sentinel: Decentralizing the VPN Industry was originally published in Figment on Medium, where people are continuing the conversation by highlighting and responding to this story.

In the proposed NuCypher + Keep protocol merger, called “Keanu,” the economics of each asset will only be dictated by their respective community. Currently that means no token swap, the NU community will dictate NU economic policy, and the same for KEEP. Participation in the upcoming network codenamed KEANU will be totally voluntary and governed equally between the two communities.

Figment voted yes on the preliminary proposal because we think that this merger will benefit both protocols, and we have confidence in and support the NuCypher team and the Keep team. We see this as an exciting opportunity for two communities to combine their efforts and their unique, complementary strengths to deliver real value to the Web 3 space. Figment is particularly eager for privacy features to be valued and adopted by the broader Web 3 community, and we think that tBTC v2 is the right vehicle to get things started with the help of NuCypher.

What is NuCypher?

NuCypher is cryptographic infrastructure for privacy preserving protocols and applications. Their Key Management System (KMS) is designed to address the current limitations that consensus networks have with securely storing/sending/manipulating private and encrypted data.

What is Keep?

The Keep Network is designed to enable privacy options for Ethereum applications and users. “Keeps” hold small amounts of data in the secure, distributed Keep Network, which launched with tBTC, one of Keep’s core applications. tBTC lets Ethereum smart contracts lock BTC on the Bitcoin network and mint Ethereum-based tBTC tokens, which are backed by real BTC. Unlike WBTC, Keep’s tBTC enables the trustless custody and use of BTC in the Ethereum ecosystem.

How can they work together?

Keep has scalability issues launching tBTC v2. Nucypher can unblock this. The idea here is that a new network codenamed KEANU is forming, and both NU and KEEP can each be staked to secure and capture value generated on this new network. The goal of tBTC v2 is to overtake WBTC, and the custody fees (~30 bps) for holding the BTC will be delivered to NU and KEEP stakers.

What will a merger look like?

As a token holder we expect there will be very little impact on you. If you own KEEP and are not staking, nothing should change. Same with NU tokens.

As a staker you can stake either KEEP or NU or both on KEANU when the protocol launches. You may choose to remain staking on the native network (eg. stake NU on NuCypher’s legacy network), or stake on KEANU, or stake some on each network. Figment will keep you apprised about the timelines and responsibilities involved in the staking processes as opportunities arise and change. You can be sure that any such changes will first be discussed and voted upon by stakers. Governing this new network, KEANU, will be jointly governed by those staking NU and/or KEEP on KEANU.

Broadly, we expect that you will be able to stake KEEP and/or NU with a single staking arrangement on KEANU (rather than having one arrangement for staking KEEP and then another separate arrangement for staking NU on KEANU).

Where are we now?

Both communities have voted unanimously to move forward with the preliminary proposed plan to launch a protocol merger. But there’s still work to be done.

What should we expect next?

There are still details to be worked out between the current proposal and the final DAO proposal. We should expect all details to be discussed on the NuCypher forum and Keep forum before being brought to a vote.

Most importantly, we’ll need to know the difference between staking on the legacy network (either the Keep network or the NuCypher network) versus staking on KEANU (the new network). If the current incentives remain the same, then it may make more sense to remain on the legacy networks to capture new issuance rewards, rather than to join a new network to capture usage fees. We expect to see more granular details to emerge for a final, detailed DAO proposal, and consider the current proposal to be preliminary.

FAQs

The market capitalizations of NU and KEEP are different. The current number of staking nodes for NuCypher and Keep are different. Why will there be 50:50 control over KEANU?

The idea is that the 50/50 split would be based on the allocated supply. That means the split will likely be based on what can be staked, so there’s only the potential for the shared network to be a 50/50 split, but one of the communities will likely have a majority stake in KEANU. If one of the communities stakes a greater amount than the other, then they will control more than 50% of the new network.

Check out the community call here:

https://www.youtube.com/watch?v=QxZp5dV7QXk

Join the Keep Discord and NuCypher Discord and check out the Keep forum and NuCypher forum.

Originally published at https://figment.io/

Protocol Merger: KEEP + NU = KEANU was originally published in Figment on Medium, where people are continuing the conversation by highlighting and responding to this story.

Why DataHub?

We built DataHub to empower blockchain application developers by opening a gateway to Web 3 protocols.

Building and running decentralized applications can be an extremely costly and difficult process without the right tools, knowledge, and resources. Developers usually need to run a node to access the network necessary to power their application. This would be a similar experience to managing your own server to keep your website up and running. The lack of developer resources that are easily available for Web 2 developers hinders the growth of the Web 3 ecosystem.

DataHub’s read/write nodes and enriched APIs solve this problem for Polkadot ecosystem developers. Instead of developers having to run their own Polkadot node, Polkadot ecosystem developers can easily connect and interact with the Polkadot relay chain without having to manage their own infrastructure. This allows developers to focus on what they do best, develop amazing applications.

No More Nodes with DataHub

DataHub offers highly available access to:

• Polkadot’s RPC
• Figment’s Enriched API (transaction search)
• Figment’s Staking Indexer (rewards and balance data)
• Substrate’s Sidecar API (interact with blockchain nodes using the Substrate framework)

Sign-up

DataHub Plus for all Polkadot Developers

Thanks to a grant from the Polkadot onchain treasury, we are offering a reimbursement of your monthly DataHub fee in DOT tokens. This gives Polkadot ecosystem developers the ability to interact with Polkadot for free up to 1 million requests per day, without having to manage their own infrastructure.

How it Works

When a user signs up to Polkadot DataHub, they have the ability to upgrade to DataHub Plus and get the subscription price rebated in DOTs within 2 weeks.

On their DataHub dashboard, users will see the “Upgrade For Free” button which redirects them to our subscription page.

There, they will be able to select the Plus plan and benefit from increased flexibility and support. Users will be charged $50/month on their credit card, and they will receive $50 back in DOT equivalent, Polkadot’s native token, for every month they subscribe.

To be eligible, simply:

1. Upgrade to DataHub Plus.
2. Add a Polkadot wallet address to your DataHub account.
3. Reply to our email to let us know what you intend to build with your Plus subscription!

We will send out the reimbursements at the end of each monthly subscription period.

A New Way of Funding Web 3 Development

To our knowledge, this is a completely new and novel way of supporting developers building on Web 3. Since the launch of Figment Learn last year, we have distributed over $275,000 in network tokens to developers who have learned to build on Web 3.

We see our Polkadot DataHub Plus rebate offering as an extension of that. This gives us the ability to offer our premium services to all Polkadot builders while putting network tokens in the hands of developers and not speculators.

We look forward to further supporting the Polkadot ecosystem and stay tuned for more updates.

Useful Links:

DataHub Sign-up

Learn Documentation

DataHub Discord

Originally published at https://figment.io/

Access Polkadot in Seconds with DataHub was originally published in Figment on Medium, where people are continuing the conversation by highlighting and responding to this story.

Casper is designed for enterprise developers to build private, permissioned, or private applications on the network. Casper spotlights their upgradable contracts for developers to change their applications over time and predictable gas fees.

Why Stake with Figment?

EXPERIENCED & TRUSTED

• Figment is a venture-funded, registered Canadian company based in Toronto. Canada offers stability, rule of law, and clear crypto regulation.
• Servicing the world’s largest CSPR holders.
• 30+ years of experience successfully scaling internet infrastructure companies.

FEATURES & BENEFITS

• Our Commission rate is 15%.
• Figment Prime & discounts available for large CSPR holders. Contact us for more information.
• Active participant in the Casper ecosystem.

SECURITY & SAFETY

• The world’s most advanced physical IDC + multi-cloud staking infrastructure.
• You maintain the custody of your CSPR at all times.
• Third-party custody solutions are available through our institutional partners. Contact us for more information.
• Protected via industry-leading Staking & Delegation agreement.

Ready to Stake?

The initial delegations will be hardcoded into the Casper genesis block, so whether you have received tokens through BitGo or the token sale on CoinList. If you’ve chosen a validator beforehand, you’ll start receiving rewards on day one. The rewards received at genesis will not be able to be withdrawn after 90 days. Unbonding from the network will take 7 days, after which your tokens will be free to move.

If you are staking with BitGo and looking for a staking interface: hang tight. They will be building a staking interface but don’t have an estimated timeline. We’ll provide more information as it is built and as tokens become available for claiming rewards and unbonding.

Since there will not be much liquidity at genesis, we don’t expect a staking interface to be built until the end of April or May. But we can look forward to having an updated block explorer up and running by the end of March. This will replace the current block explorer, Clarity.

The only way to get tokens at the moment is through the CoinList token sale. This means that if you are not using either institutional custodian services, BitGo or Coinlist, the only other way to delegate on Casper is through a command-line interface (CLI). If you are new to using a hardware wallet or are curious about self-custody, we have guides for Ledger and SafePal Wallets. Casper will have support for Ledger wallets by the time trading starts in May of 2021. Delegating using a CLI on Casper does require a decent amount of technical knowledge, so follow Casper Lab’s instructions closely.

Token Supply and Lockups

All tokens acquired via VFTA have a required a 90 day lockup period and a 90 day unlock period. Not all of your tokens will unlock on day 90 — they will event unlock over 13 weeks.

Here is an example for 100,000 tokens unlocking over 90 days:

Delegators who selected Option 1 or Option 2 through CoinList will receive an 8% annual rewards rate for the first year. This only applies to those who received their tokens through CoinList. If you’ve received tokens through a private sale, this APY might be different.

Part of the reason that Casper has long lock-up periods is to have dedicated, long-term investment in the network over time. Option 3 is the only tokens that will be liquid for the first few months to help validators spin up nodes and participate in consensus.

If you’ve purchased tokens, the exact details are as follows:

There will be 10 billion CSPR at the time of genesis; 16% of that is dedicated to the CoinList public offering. Roughly 29% of tokens have gone to validators in private sales, and 14% is reserved for the Casper Association.

Calculating Rewards for Stakers

We can make a solid estimate of the rewards rate by dividing the percent staked by the inflation rate.

Inflation is 8% at genesis. Based on inflation, we can calculate rewards based on the percentage of the network staked. The following are three estimations of what rewards we could expect when the network is 70%, 80%, and 90% staked.

If you would like to stake with BitGo and us or need help staking with CLI, we’re happy to help out.

Reach out: support@figment.io

Frequently Asked Questions

Where can I explore the network and create a Casper wallet?

Casper is counting on the community to help build a website and wallet accessible to all.

Explorer: Clarity

What is the name of the asset being staked?

Caspers’ native token, CSPR, is used to pay computation fees and reward validators.

When are staking rewards enabled? When are transfers enabled?

Staking rewards will be enabled at launch. Depending on how you purchased tokens, either through the token sale on CoinList or the private sale details, transfers will be allowed as your tokens unlock. The first transfers will be enabled in early May.

Why stake CSPR?

Good question!

Initially, the CSPR is being staked to earn new issuance (“inflationary”) subsidies. That means that the CSPR supply will increase and stakers will capture the newly issued CSPR. Generally, you will earn around 10–20% annually on your staked CSPR, but that can change. Since staking rewards are tied to inflation,read about how inflation and rewards are related here.

Stakers will also capture fees from network transactions, so as Casper transaction volume increases, CSPR stakers will earn more than new issuance subsidies.

The CSPR also gives stakers the right to vote on policy decisions for how the Casper will operate and distribute treasury funds.

How long does it take to stake & unstake CSPR?

7 days. During this time, delegators will not receive rewards.

Do I maintain custody of my CSPR tokens? Who or what controls my staked CSPR token?

Figment has partnerships with a number of top-in-class custodians: support@figment.io.

The Casper protocol takes control of your CSPR tokens while you are staking. If you unbond your tokens, this process will take one day before the protocol returns your tokens to you.

Can my staked CSPR be slashed (seized or destroyed)?

Casper does not slash for downtime. They have introduced a penalty for double-signing, the validator will be kicked out of the active set for ~90 days. During that time, a validator’s stake will be unbondable and untransferable.

Is staking income liquid or automatically staked?

Rewards will be automatically staked.

Can I lose potential staking rewards?

Outside of slashing, if a node is offline for an entire era, the node will be removed from the validator set and will not earn rewards.

What is the rate of new issuance (aka “annual inflation”) for CSPR? How does the token supply change?

The new issuance (“inflation”) rate is around 8% of the total supply.

How are decisions about Casper made and executed?

Casper has proposed a governance model that includes Constituency Groups making governance decisions on behalf of their representatives.

In some protocols, simply holding the token is necessary for voting for on-chain governance. But Casper wants to allow core developers, open-source contributors, open-source dApp devs, commercial licensees to participate in governance alongside validators and delegators.

Where can I learn more about Casper?

• Website
• Twitter
• Forum

Originally published at https://figment.io/

Casper: Staking & Delegating CSPR was originally published in Figment on Medium, where people are continuing the conversation by highlighting and responding to this story.

Ready to stake? Head here.

Why Stake with Figment?

EXPERIENCED & TRUSTED

• Figment is a venture-funded, registered Canadian company based in Toronto. Canada offers stability, rule of law, and clear crypto regulation.
• Servicing the world’s largest MINA holders.
• 30+ years of experience successfully scaling internet infrastructure companies.

FEATURES & BENEFITS

• Our Commission rate is 10%.
• Figment Prime & discounts available for large MINA holders. Contact us for more information.
• Active participant in the Mina ecosystem.

SECURITY & SAFETY

• The world’s most advanced physical IDC + multi-cloud staking infrastructure.
• You maintain the custody of your MINA at all times.
• Third-party custody solutions are available through our institutional partners. Contact us for more information.

COMPLIANCE

• Protected via industry-leading Staking & Delegation agreement.

In this guide, we have included instructions to delegate to a Figment validator with our custodial partner, Finoa, and how to delegate using command-line interface (CLI) with a hardware wallet. Mina doesn’t have a web-based wallet or staking interface yet. Keep your eyes peeled — we’re building a staking interface for Mina with Ledger in a web app on Hubble! We’ll announce that interface when it’s ready to be used by the public.

MINA Staking & Delegation Guide

MINA Staking with Figment & Finoa

Figment is working with Finoa as our custody partner for Mina. Delegations are initially hardcoded into the genesis block. At the current time, Finoa doesn’t allow delegators to switch to other validators.

Users can find their MINA address in the Funds section by clicking on the plus symbol to show their address.

Every customer has been provided with two initial addresses from the MINA foundation. The distribution of the MINA tokens into these addresses may vary from customer to customer.

Since the initial delegations will be hardcoded into the Mina genesis block, switching block producers directly in Finoa is not currently available. Finoa will set a team to build a specialized tool to manage MINA delegations and rewards directly through the interface. The Finoa team estimates they will create the staking interface in Q3 of 2021, but this is subject to change.

OTHER IMPORTANT INFORMATION WHEN DELEGATING WITH FINOA:

• Addresses may delegate to only one block producer.
• Epochs on Mina last ~14 days.
• Block producers are responsible for paying out rewards to delegators. Figment is currently developing a strategy to optimize payouts for Finoa customers.
• MINA generated from staking rewards are liquid and free to transfer.
• Validators payout rewards directly to their delegators; therefore, the staked amount increases automatically every time a validator makes a payout.
• Changes in delegations, such as increasing or decreasing the delegated amount, will require an epoch to take effect.

Since epochs are 14 days, if a delegator starts staking on Day 7 after the epoch begins, that delegation will be applied on Day 29, at the third epoch. Any time a delegator changes their stake weight, while there is technically no bonding period with Mina, keep in mind that it may take a few weeks before your stake delegation comes into effect.

MINA Staking with Command-Line Interface (CLI)

If you are technically savvy and have a hardware wallet, we’ve included how to delegate to Mina using CLI. If you are new to operating a hardware wallet, we’ve got some instructions on setting up Ledgers and SafePal Wallets.

Neither Ledger nor SafePal’s software supports staking with Mina, but not to worry — you can still delegate anyway following these instructions via a CLI.

First, if you haven’t already, you’ll need to generate a keypair and connect to the network.

Second, make sure you’ve unlocked your account and enter the following in the terminal:

mina account unlock -public-key $MINA_PUBLIC_KEY

Then run the this command to delegate your stake:

mina client delegate-stake \     -receiver <DELEGATE-PUBLIC-KEY> \     -sender $MINA_PUBLIC_KEY \     -fee 0.1

• The receiver is the public key of the validators to receive your stake delegation.
• The sender is the public key of the account from which you want to delegate
• The fee is the transaction fee required to record your transaction.

Figment’s Public Key:

B62qjCuPisQjLW7YkB22BR9KieSmUZTyApftqxsAuB3U21r3vj1YnaG

Note: there is a 2–4 week delay (also known as a latency period) before your new stake delegation comes into effect.

Token Supply and Lockups

Mina will distribute all of their tokens (1 billion) at launch, and they will slowly unlock over eight years.

At genesis, tokens are deposited to the intended token holder’s MINA address. These locked tokens cannot be transferred out of these accounts, but they can be staked or delegated. As tokens unlock on their schedule, they can be transferred to another account. Holders cannot move more tokens than what the protocol has unlocked; otherwise, the transaction will fail.

For those curious about token economics details, the Mina team recently published a blog post about token distribution and supply.

Calculating Rewards for Stakers

On Mina, validators are the ones to select whether rewards are compounded, and they determine the payouts to their delegators. These are two things that are important to calculate the rewards rate and the compounding rewards rate.

By putting the payout and compounding rewards on validators’ responsibility, Mina gives more control to delegators to control the market. Delegators have more incentive to pick a validator that will provide them with the best rewards rate. But this also means that delegators are responsible for knowing how compounding rewards and validator payouts impact their rewards rate.

It’s generally a good idea to find this information from a validator from their social platforms, telegram, etc. Delegators can find some of these links on the validator dashboard.

Mina aims to have a high percentage of the network staked, even as more tokens become unlocked (providing more liquidity on the network). Mina will pay out extra block rewards whenever a block is produced by an address that does not have any time-locked tokens. If the delegating account is also unlocked, they receive what Mina is calling “Supercharged Rewards.” These accounts will receive a higher APY as a reward for continuing to stake, despite the option to stop and withdraw tokens.

Mina is planning on a 12% inflation (also known as issuance) rate for the first two years if all tokens are staked. Based on that, we can calculate an approximate reward rate.

• If 70% of the network is staked, then rewards will be 17%
• If 80% of the network is staked, then rewards will be 15%
• If 90% of the network is staked, then rewards will be 13%

After the first two years, the inflation rate will decrease 1% every five to six months until reaching 7% (roughly four years after launch).

This rewards rate is calculated before commission fees, which are also available on the validator dashboard.

If you would like to stake with us and Finoa or need help staking with CLI, we’re happy to help out.

Reach out: support@figment.io

Frequently Asked Questions

Where can I explore the network and create a Mina wallet?

Find Mina’s block explorer here.

You can check out the validator dashboard for mainnet, which has validator statistics like their commission rate, the amount staked, and the number of delegators they have. Delegators can also find links to their contact information and social networks.

What is the name of the asset being staked?

Mina’s native token, MINA, is used to stake and to participate in on-chain governance.

When are staking rewards enabled? When are transfers enabled?

Staking rewards are enabled at the launch of the mainnet. Transfers will be enabled as tokens become unlocked. Tokens purchased during the Community Sale will be locked for 40 days after mainnet launch. The protocol will unlock 20% of Mina Foundation tokens at the launch of the mainnet. Afterward, the rest of the tokens will be unlocked continuously over the next 3.5 years, beginning six months after launch.

How long does it take to stake & unstake MINA?

There is not a bonding period after the initial token lock-ups.

Do I maintain custody of my MINA tokens? Who or what controls my staked MINA token?

Figment is partnering with Finoa to serve as a third-party custodian, reach out to support@figment.io.

The Mina Protocol takes control of your MINA tokens while you are staking. As soon as you unbond your tokens, they are returned to you.

Can my staked MINA be slashed (seized or destroyed)?

No. Mina’s protocol is founded on the Ouroboros algorithm. Slashing is based on regulating the irrational behavior of validators by threatening them economically (aka. threatening their stake if caught with downtime or double signing). Ouroboros, by design, incentivizes all stakeholders to act rationally.

Is MINA staking income liquid or automatically staked?

Validators handle payouts, and automatically staking rewards can be automatically staked. Validators can choose not to send rewards or send them when it suits them.

Can I lose potential MINA staking rewards?

While there isn’t any slashing, delegators will not gain rewards if their validator goes offline.

What is the rate of new issuance (aka “annual inflation”) for MINA? How does the token supply change?

Mina’s inflation will begin at 12%. Over the next five years, the inflation rate will fall to 7% — unless specified or changed through governance.

How are decisions about Mina made and executed?

Details about governance have not been released yet by the team.

Where can I learn more about Mina?

• minaprotocol.com
• @MinaProtocol
• forums.minaprotocol.com
• r/MinaProtocol

Originally published at https://figment.io/

MINA Staking & Delegation Guide was originally published in Figment on Medium, where people are continuing the conversation by highlighting and responding to this story.

Staking Hub | Twitter | Staking Resources | Telegram | Figment

Casper | Twitter | Documentation | Discord | Blog | Website

Quick Takes

• Casper is a “pure” Proof of Stake chain that is completely open and permissionless.
• Built from scratch Virtual Machine that supports Rust and Assemblyscript.
• Gas futures market will create more predictable fees on Casper.
• Target reward rate for stakers in year 1 will be ~15%.
• Equivocations will result in stake being unbondable or transferable for ~90 days and will not earn rewards.

What is Casper?

Casper is a new Layer 1 blockchain that uses a CBC Casper-based Proof-of-Stake (PoS) consensus protocol the team calls Highway to secure the network and verify transactions. The network is designed to be provably live and secure without sacrificing decentralization or scalability.

Mrinal stated that blockchain technology is pointless without full decentralization and security, and Casper has solved the scalability trilema purely from engineering and mathematical efforts.

“Most other Layer 1’s start with the premise of “What reasonable sacrifices to decentralization or security can we make in order to enable scalability”; our view is that without full decentralization and security, blockchain is a pointless technology and is solving problems that have already been solved.”

Mrinal Manohar, CasperLabs CEO

Scalability

Casper achieves scalability by eliminating as much message passing overhead as possible while ensuring that all the stake is properly represented. This is done by:

• Having no random sampling in the validator pool. All stake that is bonded participates in consensus.
• Not operating on a Delegated Proof of Stake model (DPoS).
• Eliminating permissioning & councils.
• Having security measures that mirror the Nakamoto consensus.

Accessibility

Mrinal also believes that another element of scalability is accessibility, which is why the CasperLabs team built their Virtual Machine from scratch. The Casper Virtual Machine will support highly tested and more traditional programming languages like Rust, Assemblyscript, and eventually, Javascript & C++, which will make Casper more accessible to Web 2 developers.

“The Ethereum Virtual Machine is 5 years old at this point and only supports a single language (solidity) which is no doubt popular in blockchain, but it’s used by 20,000 developers, versus the roughly 30 million developers out there.”

Mrinal Manohar, CasperLabs CEO

Predictable Fees

The Casper blockchain is designed to be an attractive platform for enterprise level applications. One of their focuses is making sure fees are predictable for applications using Casper. This is done two ways:

• Gas Futures Market — This allows space of future blocks to be bought in advance, which gives companies the ability to predict future costs.
• Fiat Denominated Fees — Casper will be using decentralized oracles to measure gas rate in fiat pairs, which will eliminate the need to convert token price to determine the ultimate cost.

Casper is also designed to be easily integrated into current business models, which is why it will feature flex payment codes and weighted keys.

“We believe everyone deserves enterprise grade features, even startups. AWS is enterprise grade for everyone.”

Mrinal Manohar, CasperLabs CEO

The Casper Token

The main use cases for the Casper token (CSPR) will primarily be staking, paying for transaction fees, and participating in governance.

Reward Rate

The estimated reward rate for staking CSPR will be ~15% for the first year. New issuance for CSPR is fixed at 6–7% annually and any change to this would need to be proposed and accepted by two thirds of the consensus vote.

Slashing Risks

There is no traditional risk (i.e. losing tokens) when staking CSPR, but the protocol will suspend faulty nodes. During this time, stakers will not receive any rewards, and a validator must send a special transaction to resume validating.

If a validator performs an equivocation (i.e. double signs a block), then a validator will be jailed for ~90 days, though the exact time is still being discussed. During this time, all stake is locked and untransferable and stakers will not be earning their share of rewards.

Wallet Support

There won’t be any self-custody options at launch, but BitGo will provide custody and staking support for CSPR holders who do not want to stake via CLI. That said, Ledger support will be available before trading starts which is some time in May.

Governance

Any software upgrades or changes to the protocol must be accepted by two thirds of staked CSPR participating in consensus. Governance discussions and proposals will be fully transparent and open source on GitHub, but only validators participate in consensus, not delegators. Mrinal recommends delegating your stake to a validator who shares your views if you prefer not to run your own validator.

Special Thanks

Special thanks to Mrinal for spending an hour with Staking Hub to answer all of our questions!

Thank you Gavin for co-hosting and thanks to our Staking Hub community for all of your wonderful questions.

Feel free to join our Staking Hub Telegram group if you haven’t already.

Important Casper Links:

Telegram

Discord

Newsletter

Originally published at https://figment.io/

Staking Hub: Casper was originally published in Figment on Medium, where people are continuing the conversation by highlighting and responding to this story.

Based on the current distribution model, LUNA stakers will continue to earn ANC overtime for the next 2 years, and have the opportunity to earn additional ANC by participating in ANC LP staking pools on the Anchor Protocol platform. Learn more by reading below.

What is Anchor Protocol?

Built by Terraform Labs (the company behind Terra), Anchor Protocol is a savings, lending, and borrowing platform that offers high returns to lenders, while allowing borrowers to borrow stablecoins by using staked assets as collateral. By using staked assets as collateral (bAssets), Anchor Protocol is able to use staking rewards to power returns for lenders.

Anchor Protocol Users Can:

• Earn UST, a Terra stablecoin pegged to the US dollar, by depositing UST into the lending pool.
• Mint bLUNA by bonding unstaked LUNA. You can then burn your bLUNA to reclaim your LUNA.
• Borrow UST using bLUNA as collateral.
• Stake ANC to participate in governance and earn ANC rewards.
• Provide liquidity to ANC and UST trading pair and earn ANC rewards and trading fees.

ANC Token

ANC is the governance token on Anchor Protocol and must be staked to vote on polls and is required as a deposit for making new governance proposals.

At genesis, 50 million ANC were airdropped to LUNA stakers. To qualify for the airdrop, you must have been staking LUNA on Terra at block 2179600 which is when the snapshot was taken. LUNA token holders who continue to stake will continue to earn ANC for the next 2 years.

Additional ANC can be earned by:

• Continuing staking LUNA.
• Borrowing UST using bLUNA as collateral.
• Providing liquidity to the ANC and UST trading pair.

Users staking LUNA, ANC or providing liquidity in the ANC and UST trading pair will receive a portion of rewards for their pool equivalent to their proportional share of assets for that pool.

A further overview of Anchor can be found here.

Claiming ANC as a LUNA Staker

Using Chrome or Brave browser, head to https://app.anchorprotocol.com/.

Click the connect wallet button at the top right of the screen, and if you don’t already have it, follow the prompt to download the Terra Station extension.

You can use the Terra extension to connect to your Ledger device (recommended) or to your software wallet. Once successful, you should see your address at the top right corner of the screen.

You will see an option to claim your ANC tokens (if you are eligible). It is important to note that you must have been staking LUNA on March 15th at 02:02 UTC when the snapshot was taken.

You will need UST to pay for transaction fees when claiming ANC. You can acquire UST on Terraswap.

New LUNA holders can check out our LUNA Staking Guide for more information on staking LUNA on Terra.

3 Tokens 1 Delegation

With the launch of Anchor Protocol, LUNA stakers can now earn LUNA, ANC, and MIR by simply staking their LUNA. For more information on MIR and Mirror Protocol head here.

With Figment, you can:

• Stake LUNA on Terra and start earning LUNA, ANC, and MIR rewards.
• Gain access to real time on-chain Terra data, and receive notifications of on-chain events with Hubble.
• Connect to Terra in seconds without having to manage your own infrastructure with DataHub.
• Learn how to build the next great decentralized application on Terra with Figment Learn.

Originally published at https://figment.io/

Earning and Claiming ANC as a LUNA Staker on Anchor Protocol was originally published in Figment on Medium, where people are continuing the conversation by highlighting and responding to this story.

Why Build on Avalanche?

Avalanche is an open-source platform for launching decentralized applications, new financial primitives, and interoperable blockchains. Developers who build on Avalanche can create powerful, reliable, and secure applications and custom blockchain networks with unique rulesets or build on existing private or public subnets.

Avalanche Offers:

• Scalability
• Usability
• Interoperability
• Fully customizable subnet architecture
• The ability to build your blockchain and issue unique assets

The Avalanche ecosystem is growing quickly with notable Decentralized Finance projects like Pangolin, Reef, and Injective Protocol actively building on the network.

Figment Learn

At Figment, we care about the long-term growth and longevity of the Web 3 ecosystem, and we understand what developers need to build the next great decentralized application, which is why we have launched Figment Learn.

Learn provides developers with:

• Free and easy access to the protocols necessary to power their applications via DataHub, our highly available full node infrastructure.
• Access to written and streamable educational materials and a diverse community built around learning and fostering ecosystem development.
• Opportunities for developers to earn tokens for completing tutorials and contributing to the community.

We see Figment Learn as the Web 3 Knowledge base that will drive development and grow the Web 3 ecosystem to new heights.

The Avalanche Learn Pathway

The Avalanche Learn Pathway allows developers to earn AVAX while gaining the knowledge they need to build financial applications on Avalanche. We will be distributing $50,000 in AVAX to developers who actively complete tutorials and contribute to the community by creating their own tutorials and supporting the growth of the ecosystem.

How to Get Involved

Complete Tutorials — $50 in AVAX to first 200 developers, then $20 in AVAX

Developers eager to learn how to build on Avalanche while earning AVAX need to first create a DataHub account. DataHub will provide you free and easy access to Avalanche’s APIs, which will allow you to complete the Avalanche Pathway tutorials.

Avalanche Learn Pathway Tutorials

You can verify that you have completed tutorials correctly on DataHub.

Once you have completed all the tutorials, that’s it! You have learned the basics of building on Avalanche and have earned $50 in AVAX.

Become a Contributor — $500 in AVAX

More experienced developers have the opportunity to earn AVAX by contributing to the Avalanche Learn developer community. Simply fill out this form to get started.

Extra Opportunities — $5 — $100 in AVAX

Developers also have the opportunity to earn AVAX by sharing on Twitter, writing an article on Medium, or by contributing a meaningful piece of software on GitHub.

Simply fill out this form and include direct links to your contributions.

Important Links:

Avalanche DataHub Sign-up/Login

Avalanche Learn Pathway

DataHub Community Discord

What to Expect

We hope to see the Avalanche Learn Pathway become the strongest alignment mechanism between Avalanche and its developer community who are now incentivized to see the value of the network and its tokens grow.

Blockchain communities built around developers and education create a strong foundation for ecosystem growth. We look forward to seeing what Avalanche developers build with DataHub and the Avalanche Learn Pathway. Together, we can build a better Internet.

Originally published at https://figment.io/

Learn how to Build Financial Apps with the Avalanche Pathway was originally published in Figment on Medium, where people are continuing the conversation by highlighting and responding to this story.

Staking Hub | Twitter | Staking Resources | Telegram | Figment

Agoric | Twitter | Documentation | Discord | Blog | Website

Quick Takes

• Agoric separates the asset transfer layer and the smart contract layer allowing for a safer and more secure experience for DeFi participants.
• Composable “DeFi Legos” aim to power rapid ecosystem development at launch.
• Validators and stakers will earn more as the economy grows through fees generated by the expansion of Agoric’s local currency and fees on native AMMs.
• Inflationary rewards, unbonding times, and slashing penalties will be unique though informed from Cosmos Hub learnings.

Key Features

The Agoric blockchain is designed to make deploying DeFi applications more accessible, safer, and faster for developers while creating a more secure experience for DeFi participants.

Accessibility

Today, most blockchain smart contracts are written in Solidity, WASM, or Rust, but not on Agoric. Smart contracts on Agoric are written in JavaScript, the most popular coding language in the world making the Agoric blockchain more accessible to Web 2 developers.

Safety

Agoric separates the asset transfer layer from the smart contract layer. This allows a user to interact with a smart contract without sending funds directly to a smart contract.

This is not the case when interacting with smart contracts on Ethereum. For example, when interacting with a smart contract on Uniswap, you are actually sending your funds to that smart contract and entrusting that it will execute correctly.

“I characterize that as sending money to a random number and hope something good happens.”

Dean Tribble, Agoric CEO

Agoric on the other hand allows users to interact with smart contracts, but transfer funds via the infrastructure/asset transfer layer.

“The payments are escrowed by the infrastructure layer. The contract knows the funds are available, but ONLY if the contract provides what the client wants. If it can’t, the infrastructure layer returns the provided funds. So the offer safety is that you get what you want or your money back, independent of incorrect or malicious behavior of the contract.”

Dean Tribble, Agoric CEO

Speed

The Agoric platform is designed to be highly composable. This object-based approach enables, what the Agoric team calls, DeFi legos that are directly reusable and verifiable.

“Remember old-style HTML applications where each lick took you to a new page? That’s current DeFi. Now think whizzy modern Web apps? That’s built with components.

More seriously, building with reusable components allows safer, more rapid innovation in applications. That improves the functionality that gets offered over time, the usability and refinement, and the safety of the customer’s funds.”

Dean Tribble, Agoric CEO

Agoric plans to launch these DeFi legos conservatively, but over time, they will gradually enable permissionless building, which the team expects will rapidly power development in DeFi.

The Agoric Stack

Agoric is built on top of Tendermint and the Cosmos SDK. As such, validators and stakers can expect similar staking and slashing parameters as the Cosmos Hub, but there will be differences, and have yet to be announced.

A key differentiator between Agoric and most other Proof of Stake protocols is that Agoric stakers will earn a share of fees generated by the expansion of the local currency and fees on native AMMs which will likely be the deepest for certain asset pairs. This is similar to staking a governance token on a DeFi application.

This was designed for good reason. In Proof of Stake networks, it is important for the underlying staking token to capture value because that increases security of the overall network.

“I think other projects are kicking the can down the road, but staking token value = protocol security. If the protocol has $10B in assets, but the staking tokens are worth $100M, then there’s a strong incentive to break the protocol guarantees to steal the assets it secures.”

Gavin Birch, Figment Protocol Expert

Governance of the Agoric chain will be done at the smart contract level, which means it will feature the same composable elements as the DeFi legos allowing it to easily evolve over time. At launch, we can expect a similar governance experience and structure as most Cosmos SDK chains.

Project Status

Agoric recently launched its incentivized testnet that is scheduled to last until June with mainnet to follow. The testnet will consist of 5 phases, Onboarding, Infrastructure, Economy Security, Stress Test, and Adversarial. 1,000,000 tokens have been allocated to reward participants during the testnet stages.

There is still plenty to hash out and be discussed and we are looking forward to participating in the incentivized testnet. We ended our chat with Agoric with a few thoughts on staking derivatives and what would be needed to properly implement them on Agoric.

“Security has to be the priority, but capital efficiency is hugely important too. Security is driven by asset value and value is driven by desirability of owning it — which speaks directly to capital efficiency, so managing the tension there with staking derivatives is critical.”

Rowland Graus, Agoric Product Manager

“If you can sell staked tokens, then you can trade a staking position with liquidity. If you can buy slashing insurance, then you can make staked tokens + insurance fungible across validators. Does that break impact staking security?

In order for staking derivatives to actually accomplish what they intend, they must be in the context of an extended market and economy so that people can do things with them.”

Dean Tribble, Agoric CEO

Special Thanks

Special thanks to Dean, Michael, and Rowland for spending an hour with Staking Hub to answer all of our questions! We hit a few things that were not mentioned in this recap, so if you want the whole conversation head here.

Thank you Gavin for co-hosting and thanks to our Staking Hub community for all of your wonderful questions.

Feel free to join our Staking Hub Telegram group if you haven’t already.

Important Agoric Links:

Agoric Developer Documentation

Agoric Discord

Incentivized Testnet Information

Originally published at https://figment.io/

Staking Hub: Agoric was originally published in Figment on Medium, where people are continuing the conversation by highlighting and responding to this story.