Own is proud to introduce our new public blockchain BFT consensus and DPoS staking system. Our architecture will enable more stakeholders than ever to support the utility of the ecosystem — regardless of the amount of CHX they hold.
This approach enables everyone to participate, by running a validator node on Own’s public blockchain. At a very high level, our new public blockchain comprises:
- 100 Validator nodes — which create new blocks
- Unlimited Client nodes — which receive and propagate transactions throughout the network
- CHX staking from Own’s wallet, without the need to run any kind of node
All CHX holders can help to support the network by staking their CHX to a validator, and in return be rewarded with a percentage of transaction fees — without the need to run any kind of node at all. All they need to get started is a digital wallet containing CHX, Own’s utility token. Each validator is required to achieve a minimum of 500,000 CHX, which can be made up from up to a hundred individual contributors staking together, or all the CHX can be provided by a single entity.
Our blockchain operates a Delegated Proof of Stake mechanism, meaning everyone can delegate a stake to a validator and take a share of the reward, even if they do not have 500,000 CHX in their possession. Unique to Own, our validators decide what percentage of their transaction fees they will share with stakers. This brand-new concept will create a competitive market place within the utility ecosystem, driving further adoption.
We are aiming for a maximum of 100 validator nodes initially, with at least 50 million CHX locked in stakes. In Q1 2019 we will start the main-net by running 20–40 validators in our control, which will lock-in 10–20 million CHX from the start.
To understand our new mechanism in greater detail, here are some answers to commonly asked questions…
What are blockchain nodes?
Blockchain nodes are instances of the blockchain specific software, which store and maintain a replica copy of the blockchain data (or ledger). Blockchains rely on nodes to keep track of transactions that have occurred and provide up-to-date information about the ledger state (such as account balances).
Own’s public blockchain network recognises two types of nodes:
- Client nodes
- Validator nodes (or just Validators)
Client nodes serve as an entry point to the network by providing an API for transaction submission, as well as for getting the information about current blockchain state (e.g. address balance, account holding, transaction status, block info, etc.). They propagate received transactions and blocks to other nodes and apply received blocks to their local state.
Validators are a special subset of nodes on the network. In addition to the client node functionality, validators also participate in consensus protocol, which is the process of creating new blocks. Only validators can create new blocks — client nodes just apply received blocks to their state.
How are Validators rewarded?
Own’s public blockchain rewards validators using transaction fees. This means that the reward for validators depends on the number of transactions processed on the blockchain and is not fixed or time-based.
Every transaction must specify an amount of CHX they are willing to pay for execution of the actions contained within it. The transaction fee helps us to protect against Denial of Service (DoS) attacks, prioritise transactions and reward validators.
Transaction fees incentivise validators to do the work on processing transactions, producing new blocks and keeping the network alive and progressing. To collect rewards from the block, validators must be online and respond within a certain time frame. If they don’t propose a block before time out, a new consensus round will start and be offered to a new proposer.
If a proposed block is accepted by more than two thirds of active validators, voters who delegated CHX to the proposing validator will receive a percentage of the reward.
Why do we operate a BFT-based consensus protocol?
For the new blocks to be accepted as the new state of the whole network, more than two thirds of validators need to vote for it. Assuming no more than a third of validators fail, BFT-protocol guarantees that safety will never be violated, as validators will never commit conflicting blocks at the same height. Therefore, a BFT-based blockchain never forks in normal circumstances.
Due to the way validators exchange messages in the voting process (multicast), the network traffic between them increases significantly with every new validator. It is therefore necessary to limit the number of validators to make sure the protocol works efficiently.
This limitation does not apply to client nodes though. There can be as many client nodes as needed, because client nodes communicate over gossip protocol and do not participate in consensus.
For security purposes, we require a minimum amount of CHX to be held by anyone running a validator node. There is a minimum percentage — or quorum supply — that must be locked in stakes when the network runs with its maximum number of nodes to secure our network. We aim to set the quorum supply at around 30%.
How does the Delegated Proof of Stake (DPoS) work?
Own uses a Delegated Proof of Stake (DPoS) approach to select the top 100 validators over the validator threshold, which will participate in the block creation process. Anyone with CHX can stake their CHX against a validator and benefit from a percentage of the rewards collected by that validator — proportional to their delegated stake.
With this model, multiple CHX holders that might not have enough CHX to run a validator alone can unite and run a validator for mutual benefit.
The validator decides what percentage of the reward will be shared with voters. Some large stakeholders may choose not to share any reward, if they have enough at stake. Smaller stakeholders may choose to share a percentage of their transaction reward, motivating others to delegate CHX and enabling them to become validators. Take a look at the diagram below for a visual explanation:
Although we prioritise safety, to ensure speed of processing we have capped the number of participants that each validator can distribute CHX rewards to 100.
How do we track the number of validators and available CHX balance?
The list of active validators is updated at the configuration blocks — rather than every single block. CHX delegation and validator configuration can be done at any time, but the active list of validators does not change.
Using their wallet a user can review the list of active validators and the percentage rewards they are offering. The user can then stake CHX against their chosen validator. This amount is locked-in immediately and is not available for transfer or staking with another validator. However, any remaining balance can still be transferred or staked with other validators.
It is worth noting that the staked CHX is still visible in the voter’s wallet balance, but it is locked until the staking is revoked.
How much CHX will be locked-in stakes?
We are aiming to set the quorum supply at around 30% and the maximum number of validators at 100 initially.
Total CHX supply (S) = 168,956,522 CHX
Quorum supply (Q) = S * 0.3 = 50,686,957 CHX
Max number of validators (V) = 100
Validator threshold (T) = Q / V = 506,870 CHX
If we round this to a number that is easier to remember and operate with, we get a validator threshold of 500,000 CHX required (including the amount delegated by voters) to be eligible to run a validator node.
Once the maximum number of validators is reached, there will be at least 50 million CHX locked in stakes.
When will our public blockchain go live?
We are on the verge of launching our new public blockchain; the development team is beta-testing and hardening before we go fully live. As own is working with large enterprise clients, we need to be 100% sure everything will run to plan.
In terms of next steps, we will provide detailed instructions on:
- How to perform the token swap (from current ERC-20 CHX to native CHX)
- How to choose a validator and stake CHX from your wallet
- How to setup a validator node on your server
- How to apply for the early access validator beta trials
For more information about hardware and software requirements to host validator nodes, please refer to our technical documentation. We will also be providing additional support, including further FAQs and an AMA, in the coming weeks.
Telegram Group: https://t.me/OwnMarket