Dear community members, we are happy to present an overview of ColdStack’s long awaited staking features! This is an important development in terms of expanding our platform’s adoption as well as our community engagement. While we have previously mentioned that staking will be available for node operators, we are pleased to unveil that our staking features will eventually be made available for everyone! Though only those participating in our alpha test can access staking for now, we feel it is important to provide our community with general information regarding these features, in preparation for their expanded availability.
Staking General Details
Staking reward: 20% APR
Max staking for alpha testers: $10,000
ColdStack’s staking will feature a 20% APR reward structure — which is actually a higher return rate when compared to the storage tokens and platforms which we aggregate, many of which do not offer traditional staking. To obtain rewards through most decentralized storage platforms, a user must actually run a node, mine the token itself, or loan the token out on a separate platform. This means ColdStack is one of the only storage tokens that currently offers traditional staking to anyone. While obtaining rewards through other decentralized storage platforms isn’t necessarily, we at ColdStack wanted to make our staking as easily accessible to our valued community as possible.
In order to access staking, users must set up their wallet to act as their CLS account. Users must load $CLS tokens into this wallet in order for these tokens to be used for staking. In order to sign and authenticate transactions, as well as to bridge tokens into our internal Substrate system where it will be staked. During our alpha test, we will allow for a maximum of $10,000 to be staked. This will be expanded to $50,000 after the official release, when the service is made available to the general public.
Staking will currently be available only to those who are actively participating in the ColdStack platform.
What does this mean? Essentially, there are several ways for community members to contribute to our ecosystem, and we would like to dedicate our staking rewards at this early stage to those who actually utilize our platform, or help make ColdStack a better product. There are four main ways that one can contribute to our ecosystem — adoption, affiliation, node operation and governance.
Adoption:
The most important aspect of growing our platform is adoption — we want people to actually utilize our storage service! In turn, we’ve decided to give the most rewards to those who store data with us.
Of the previously mentioned 20% APR, 25% of it will automatically go towards paying for storage for stakers, meaning that to obtain the full rewards available through staking, you must actually be using the ColdStack platform. For example, if you stake $48,000 in $CLS tokens, then $200 per month of your $800 reward automatically goes to paying for storage through ColdStack. However, there will be minimum storage requirements for those who access staking through storage adoption, which will be tied to the overall amount of $CLS staked. This is done to prevent dishonest parties from accessing staking through storage adoption, without actually adopting the platform.
We will provide an online staking calculator as well once we implement these staking features, so that community members can have a better understanding of their expected returns, as well as a better understanding of these storage requirements.
Affiliation:
We plan to create an affiliate program in order to allow access to staking features to those who are not currently storing data with ColdStack in our alpha, and do not plan to store data with ColdStack in general. We understand that not every community member will be eager to use our storage service — some are generally opposed to cloud services but in favor of decentralization, and others may simply not have enough data to store in order to make use of the platform. However, we do need to ensure current staking rewards are dedicated to community members who are active in bringing adoption to our platform, so we feel this is an excellent middle ground.
Even if an individual does not wish to utilize ColdStack themselves, they undoubtedly know someone, or an organization, that can drastically benefit from the cost-efficiency and data immutability ColdStack can provide. The data economy is growing rapidly — both within blockchain and in traditional business, and digitization has necessitated the rapid growth of storage needs. Because of this, we don’t feel as though dedicated community members will have much trouble bringing others to our service. Should an individual accomplish this, we are happy to enable access to staking rewards for them even if they do not store data with us personally. Community members are encouraged to reach out to individuals, businesses, and other blockchain projects who may be interested in trying out our storage features.
DAO Governance:
Participation in DAO governance will be another way community members can access staking rewards. DAO governance will be an essential part of our platform’s development and maintenance — those who take part in DAO governance will help determine the direction of our platform, making decisions on important matters such as our fee and reward system. Such participation will require greater “activity” when compared to simply storing files with our system, but provides an excellent alternative route for those looking to access staking features. However please be warned — those who access staking through DAO governance and do not participate may be subject to having their staking rewards forfeited.
Most importantly, our DAO governance will enable our dispute resolution and customer complaint features. Customer complaints will be initially processed by responsible parties elected by our DAO’s Customer Complaint Committee. These responsible parties will be referred to as Customer Complaint Experts, and are responsible for investigating any complaints about a node operator (for example, a node does not properly store the data it is required to). Should an expert determine a node operator to have acted maliciously, they will be able to bring this matter to a vote in which the fate of the node operator in question is decided. Nodes can be fined or dismissed, with necessary funds being deducted from the node’s deposit.
Node Operation:
Node operation is another way to access staking rewards though ColdStack. Node operation is how most other storage tokens go about driving participation and rewarding users. However, node rewards are typically dependent on the actual adoption of the platform, meaning that there is little incentive to operate a node for ColdStack during these early stages.
Because of this, node operators will not only have access to payments and rewards they would typically be entitled to for their duties, they will also have access to our traditional staking features in order to provide compensation in the interim. Node operators perform some of the most essential functions in our network, and are responsible for handling much of the data which passes through our system. Because of their importance, we see little issue in providing as much as possible to these supporters
Long-Term Staking Details:
Staking enables ease-of-use features such as preventing data loss from a user having insufficient $CLS funds for the amount of data being stored, giving even greater incentive to those who intend to use our network for a fair period of time. Users will be able to draw $CLS tokens directly from their staked amount or utilize rewards to resume service. Alternatively, for accounts which stake $CLS tokens but still have insufficient funds, ColdStack can simply limit storage functionality for the account until appropriate payment is received, as opposed to outright deleting data from negligent parties as is traditionally done by many storage networks. This also means a user will not have to provide an email in order to receive notifications, further enhancing the user experience and user’s privacy.
If you stake for at least 6 months, then storage rewards can be utilized retroactively or carried over. Essentially, if the amount of data you store with ColdStack changes and falls below the threshold needed in order to claim these rewards, you can simply upload more data in order to meet these requirements to properly utilize the service and “claim” the storage rewards.
To avoid a situation where people attempt to access staking rewards without properly storing data for a period of time, we utilize a geometric mean as opposed to an outright average to properly measure data storage activity and usage for stakers. The geometric mean is a mean or average, which indicates the central tendency or typical value of a set of numbers by using the product of their values:
The geometric mean of all the costs during this period should be no less than 25% of the maximum. While we understand that last part is a bit complex, we’re confident our online staking calculator will simplify things for our users.
More to Come:
Our team is very excited to unveil these features for our community, and we’re especially proud of how we’ve managed to strike a balance between rewarding our core supporters while still keeping our staking system inclusive for all. We know our community has been very eager to participate in this process, and we’re very happy we were able to create a system which allows much greater access to these features.This staking system is the result of much internal deliberation, and we can certainly say we put a great deal of effort into it. Ultimately, what is most important is that our staking features will help drive adoption — which is the greatest way we can ensure that all ColdStack supporters gain maximum benefits, regardless of their level of participation. Though we’ll provide one final note — anyone that is dissatisfied with our current staking system is not only encouraged to provide feedback to the team, but is also encouraged to participate in our DAO governance in order to edit these features based on what the community wants. As is shown through this expansion of staking features, our team is dedicated to having the ColdStack platform be a project that is run by our community, in the spirit of proper decentralization.
Follow ColdStack:
Official website: https://coldstack.io
Twitter: https://twitter.com/coldstack_io
Telegram: https://t.me/coldstackio
Medium: https://medium.com/coldstack
