Everything You Want To Know About COTI’s Full Nodes and Staking Model
For those new to the COTI community, and for those who want to learn more, we have been releasing a series of tech guides detailing the COTI technology and what powers the COTI network. In this article, you can learn more about COTI’s Full Nodes and Staking model.
Nodes in the COTI network
COTI provides a decentralized solution that is designed to enable secure and trustworthy payments. This solution relies on the distribution of a Trustchain responsibility to several types of nodes that are run by network users. Nodes are needed to verify transactions and to ensure that the COTI network remains safeguarded against potential fraud and cyber manipulation, such as double spending attempts, penny spend attacks, sybil attacks, and more.
There are four types of nodes in the COTI network, including Full Nodes, DSP Nodes, Trust Score Nodes, and History Nodes. The most common node type is a Full Node. We expect the number of Full Nodes to be in the hundreds, or potentially thousands at network maturity, while a reasonable number of DSP Nodes will be in the dozens and a lesser amount for Trust Score Nodes.
In the current development stage, Full Nodes are the only available nodes that can be run by network users. DSP Nodes and Trust Score Nodes will also be operated by users as the network matures.
COTI’s Full Nodes
Full Nodes are the main client-facing servers of the system. Each transaction sent from a wallet is received by a Full Node and propagated to the entire system. Full Nodes perform a Trustchain Consensus protocol by receiving new transactions from wallets, validating them, applying Proof of Trust, and attaching them to the DAG. Full Nodes also execute COTI smart contracts in a decentralized manner.
Watch this short video to find out more.
On the COTI network, Full Nodes can define their own price list for users and compete for them. Consequently, COTI Full Nodes are responsible for collecting fees on every protocol usage and for transferring the network fee to the network pool.
The important point is how Full Nodes sets the fees. Because of different operating environments, different levels of service and support offered by Full Nodes, COTI network does not dictate the Full Node fee level. Full Nodes are free to set their price, while Merchants and Customers are free to choose the Full Node. As a result, we assume that competition will adjust Full Node Fees to a reasonable market price.
Read all about COTI Full Node Fee Policy.
The incentives for running a Full Node
✓ Simple, inexpensive and easy to run Full Nodes
✓ All node operators can profit from running nodes
✓ Node operator’s Trust Scores increase in line with the amount of work performed for the COTI network
✓ Merchants can run nodes and set their fees to zero to attract more customers
When running nodes, operators provide the network with useful resources, including CPU, memory, storage, and network bandwidth. These resources are not cost-free, which is why node operators are compensated and have the opportunity to earn a reasonable ROI.
Full Node operators receive fees collected from transactions. The more transactions that a Full Node processes, the more it earns.
Transactions in the COTI network
In the COTI network, transactions are created according to several patterns defined by the transaction type. The most common types are payments for goods or services, remittance payments, and singular transfers.
In the first two cases, a transaction originator creates a payment request, and the transaction is produced according to it. The transaction originator must input the Full Node address in the payment request in order to pre-select the node (a Full Node is selected by users for singular transfers).
COTI provides an automated tool for Full Node selection, enabling a merchant, or any other transaction originator, to choose nodes according to specific criteria. Full Nodes can also be run on a merchant’s own Full Node, or by using one known to the merchant.
By running a node, the node operator supplies useful resources to the network: CPU, memory, storage, and network bandwidth. Usually, these resources are not free, so the node operator should be compensated. The node operator’s investments should generate a reasonable revenue. Therefore, Full Node operators receive a Full Node fee collected from transactions received from user wallets. The more transactions Full Node processes, the more it earns.
Full Node operators set fees autonomously, which makes setting competitive fee structures important. If a user knows a Full Node with a better price list, it can be re-selected when sending transactions.
Important note: server throughput is limited, so large merchants can work with a pool of Full Nodes which are chosen at random at the time of transaction. Still, Full nodes can handle thousands of transactions per second which is more than enough for most use cases.
Introduction to COTI’s staking model
COTI’s staking model is built to compete with decentralized finance (DeFi) income models and provides a means to generate a steady income from the process of transaction approval on the COTI network.
The economic model of COTI nodes is designed to be fair, efficient, and flexible, and is based on finely tuned fee distribution mechanisms and staking requirements.
As real-world transactions are usually denoted in fiat currencies and node operator fees are a percentage of these transactions, a natural hedge for the COTI coin price is created. This is a major advantage over other staking models and currencies.
All nodes are required to deposit (stake) COTI native coins to participate in the network, although the requirements are different for each node type. DSP Nodes and Trust Score Nodes, which are more substantial components of the network foundation, require higher staking than Full Nodes.
Community Nodes
Community nodes are MainNet Full nodes that have a delegated staking mechanism to include more community members in their operation. Running a node in a payment system is an important task as it involves the confirmation of transactions to real-world merchants.
We understand that managing a node requires technical skills that not all participants have, therefore community nodes will be technically managed by a node operator with sufficient technical skills from the community.
Community nodes will now run with a 5,000,000 COTI staked (compared to 500,000 before). In order to serve various needs to different members, we have created three groups with different staking amounts and guaranteed rewards (the reward is the highest of either fee generated by the node or the guaranteed annual reward).
The node operator will enjoy the ability to stake 750K COTI with a guaranteed reward of 35% per annum. The remainder 4,250,000 of COTI to be staked on the community node will split between community members that may stake 15,000–500,000 COTI for 30–90 days, with higher rewards to longer staking periods.
In the example below, we demonstrated several situations for Community Node stakers in the COTI ecosystem:
Advanced Nodes
Advanced nodes are MainNet Full nodes too. The advanced nodes will require staking 500,000- 5,000,000 COTI for a minimum period of 90 days in exchange for the higher between fees generated by the node and the guaranteed annual reward of 25%.
The node will be operated by COTI, securing a 100% uptime, while the staking amount can be split between a few stakers.
All node operators can profit from running nodes. Potential earnings can be estimated using our earnings Calculator.
Summary table:
You can read all you need to know about our Staking 2.0 program and how to apply for it!
TestNet Full Nodes
In order to test Full node operations, COTI requires a good testing ground for its nodes on its TestNet. The benefit for COTI in such testings is immense and in order to compensate TestNet node operators for their time and effort, COTI allows TestNet node operators to stake a 100K COTI for 10% per annum return. Also, one prerequisite for running a MainNet node (community or advanced) is that one must qualify as a TestNet node operator first. The qualification plan and staking guidelines for TestNet node operators were published here.
To read the full incentive plan for TestNet node operators, click here.
How to Run a TestNet Full Node: COTI’s Technical Guide
Wolf Crypto, the first to run a Full Node on the COTI TestNet network has written a detailed guide explaining how to set up a COTI TestNet Node on Vultr. Read the full guide below here.
Calculate your potential earnings
Full Nodes have the opportunity to earn fees from merchants, as well as P2P transactions. Use our calculator to estimate your potential earnings as a node operator in the COTI network.
Profits are relative to your level of service and the fees that you have set.
COTI is also integrated into Staking Rewards, a leading data provider for stakable assets in the crypto space. Listing on Staking Rewards allows COTI’s staking program to be directly compared with other staking programs by providing real-time, transparent and verifiable staking data to the wider crypto community.
You can now find COTI’s Staking Rewards profile at — https://www.stakingrewards.com/asset/coti
You can also view our configurable staking calculator here — https://www.stakingrewards.com/asset/coti/calculate
COTI’s Future Nodes
Users can operate the following nodes in the COTI network in the near future:
Double Spend Prevention (DSP) Nodes
A set of highly trusted distributed servers responsible for DSP consensus, account balance control, and general protocol and data integrity. Each transaction must be approved and signed by the majority of the DSP nodes, and users cannot directly connect to DSP Nodes. To run a DSP Node, a user is required to stake a substantial amount of COTI. This amount can be deposited solely by the DSP Node operator, or by a group of network participants delegating their deposits to the node operator.
Trust Score Nodes
Trust Score nodes are dedicated servers responsible for calculating and storing participant Trust Scores and KYC statuses. To run a Trust Score Node, a user is required to stake a substantial amount of COTI.
Exchange-Based Staking
Staking on exchanges is coming via additional new programs that allow for more flexible staking through various exchanges. Exchange-based staking programs will be announced and detailed as we go.
Stay COTI!
Nodes live on MainNet:
Sources:
For all of our updates and to join the conversation, be sure to check out our channels:
Website: https://coti.io
Twitter: https://twitter.com/COTInetwork
Telegram: https://t.me/COTInetwork
Github: https://github.com/coti-io
Discord: https://discord.me/coti
Technical whitepaper: https://coti.io/files/COTI-technical-whitepaper.pdf
