pNetwork continues to create bridges between major blockchain networks with the long-term goal to materialize the promise of blockchain composability, which fosters instant liquidity and addresses the fragmentation of the industry. The key players of pNetwork are node operators, otherwise known as validators.
The good news is that everyone can become a node operator, as pNetwork is committed to decentralization and is gradually moving from a centralized entity to a community-powered ecosystem that hosts a Decentralized Autonomous Organization (DAO). The transition to a fully decentralized network is going on according to the roadmap.
In the present article, we discuss how to become a node operator and what the main benefits are.
pNetwork node operators contribute to secure the asset switch from one blockchain to another (pTokens peg-in and peg-out) as well as powering all of the features and services within the ecosystem. pNetwork nodes run code that is continuously audited, fully open-source, and supported by live attestations.
pNetwork Dawn (an open network that enables the secure transfer of value between any blockchain), hosts two types of node operators, one contributing to the validation of pNetwork-powered operations (example: cross-chain movement of assets via pTokens) and the other constantly verifying the security of the network, challenging the correct behavior of validators.
The former category is responsible for operating the system, while the latter set of node operators guarantees transparency and security of the network. pNetwork Dawn ensures the system integrity and correctness are always monitored.
Obviously, if you run a pNetwork node, you are rewarded for doing so. The decision to incentive node operators has been approved recently by the DAO.
For those unfamiliar, pTokens are bridge tokens that facilitate the cross-chain movement of assets between two blockchains. Any pToken is pegged to the underlying asset with a 1:1 ratio. For example, pBTC-on-ETH, or simply pBTC, is a pToken created on Ethereum that replicates the value of Bitcoin. pBTC is used to facilitate the interoperability of Bitcoin and Ethereum networks, which cannot directly communicate with each other. Similar bridge systems can be created for any two blockchains, allowing either unidirectional or bi-directional connections.
Each bridge needs three key elements, including:
- A full node for every blockchain being bridged.
- Secure enclaves running inside the so-called Trusted Execution Environments (TEEs).
- A network of nodes that jointly cooperate to generate and manage the private keys(s) used to run the peg-in and peg-out processes.
Thus, for every bridged blockchain, there is a full node, and it is the job of node operators to make sure that all the processes work properly.
If you join as a node operator, you become eligible to receive rewards. The payment for the fees considers the asset that users transfer cross-chain. For example, while processing the peg-out of pBTC on Ethereum, a fee would be collected by the system in pBTC and distributed to pNetwork nodes.
How to Set Up a pNetwork Node?
There are several conditions to meet in order to become a node operator. Here are the three main ones:
- You have to stake no less than 200,000 PNT tokens within the DAO. The PNT (pNetwork Token) is the native token of the ecosystem.
- Setup and manage a server running a pNetwork node on a TEE. Node operators have to register their node so that it is effectively recognized as part of the pNetwork. The node needs to be connected with the Ethereum address staking the required amount of PNT within the pNetwork DAO.
- During the process, you have to provide good quality of service (QoS) for the so-called Trusted Execution Environments (TEE), which execute the cross-chain transfer of assets. Basically, a node operator is a TEE operator.
pNetwork node operators are rewarded for their effort. The pNetwork rewards derive from the peg-out fees paid by users. Unlike other cross-chain systems, pNetwork charges no fees for peg-in operations. There is a small fee of 0.25% for peg-out processes. Also, there are other fees for additional features, such as pNetwork Portals. The fees are equally distributed among node operators.
In order to discourage misbehaving nodes, the DAO slashes the staked PNT of node operators who either provide bad QoS or cannot ensure valid attestations.
As a node operator with a stake in the pNetwork DAO, you can participate in the DAO’s voting process. Thus, besides the fee-based rewards, you can also generate 42% interest (from August 2020 to July 2021) and 21% in the second year of DAO staking when actively voting for DAO proposals.
On a side note, pNetwork is releasing DAO v2, which will introduce even more interesting features, such as built-in PNT staking pools for co-owned nodes as well as in-DAO lending pools.
By joining pNetwork as a node operator, you contribute to the improvement of the blockchain ecosystem and at the same time, you get exclusive benefits (commissions from the operator node and staking prize of the pNetwork DAO).
To learn more about the benefits of becoming a node operator, join our community!
🔗 For any blockchain project looking to integrate pTokens into their infrastructure, we have also built a pTokens JS library.
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