Seekers and Sylo Nodes

Why the connection?

We recently announced our Seeker NFT project — and the reception has been overwhelmingly positive. A community of both old and new faces has sprung up around our little robot friends and it’s been fun engaging with everyone through the Seeker lore.

Now that some of the dust has settled, we are left with people asking questions about both the Seekers and the Sylo Nodes. Some of the questions are from people who understand the NFT game but don’t know why they would care about Sylo Nodes. Other questions are from our node operators, who may not understand how NFTs fit into the mix. And, still more questions come from people learning about both projects for the first time and looking to get involved.

So, let’s talk through both Sylo Nodes and Seeker NFTs and see how they can play well together in the decentralised world.

First, there was the node

The Sylo Node is one of the primary projects developed by Sylo and is the backbone of our decentralised communication network. Launched to the public in December 2020, the Sylo Node enabled anyone to contribute infrastructure to our global peer-to-peer network — the Sylo Network.

This network is fully decentralised and supports the Sylo Smart Wallet. The approximately 250 Sylo Nodes support over 400,000 Sylo Smart Wallet users, with only 10 of these nodes being run by Sylo or one of our partners.

These numbers mean that we have at least 240 user operated nodes in the ecosystem, at a time when the services performed by these nodes are not even incentivised!

Then, there was incentivisation

Altruistic networks are great, but in order to scale the network we would need to find ways to reward our nodes for their service. The Sylo Network team got back to work and, in 2021, we released our incentivisation design and the supporting Ethereum smart contracts.

This incentivisation layer provides probabilistic micropayments in exchange for services and allows the Sylo Nodes to “earn their keep” by hopefully generating more income than the operating costs. The details of the tokenomics layer is outside the scope of this article — but I will briefly summarise it.

Sylo Network Tokenomics

Sylo Node operators stake SYLO tokens to capture a percentage of the incentivised services on the Sylo Network. The more you stake, the more work is directed to your node. Operators can increase their share of work further through delegated stake (detailed run through here).

The Sylo Network rotates users to new nodes every epoch based on node stake. Nodes can make adjustments to their stake for each new epoch.

Nodes that join an epoch must make some on-chain transactions to indicate their membership on the network. We have optimised these fees in a variety of ways but earning income by operating a Sylo Node is still not free. (More on this in a bit.)

It’s no secret that the NFT market has exploded. Like many other projects in our industry, Sylo was one degree of separation away from a lot of exciting developments in the NFT space. The open metaverse was looking for communication technology — and the Sylo Network was essentially ready to go out of the box.

But you see, there was one tokenomics issue left unresolved with the Sylo Network. The network had no built-in infrastructure cap. Having an infrastructure cap is an important safeguard to ensure that nodes have a fighting chance to (at least) cover their operating costs in the event of a huge surge in demand. We were already seeing the popularity of running a node far exceed our expectations, and we hadn’t even rolled out the incentivisation yet. If we launched the incentivised network without a cap, we could likely be in a position where there were too many nodes — and the available work may not cover the blockchain fees.

Now, there are Seekers

A lot of prior node projects used hard-coded infrastructure caps to restrict access. This works fine, of course, but the team here at Sylo thought we could have our infrastructure cap while also providing a fun way to engage with the open metaverse and drive adoption of open communication.

And so the idea of a utility NFT that unlocked incentivised Sylo Node services was born. The Seekers came to life.

It was important to us that we brought as many of our loyal Sylo Node operators along to the open metaverse with us. So, we devised a whitelisting system whereby we allow them to claim a free (transaction fee only) Seeker to get their incentivised Sylo Node up and running quickly and easily. We know that running a node 24/7 is no trivial task, so rewarding the members of the community who managed this task deserve something in return.

Hopefully, this gives everyone the background necessary to understand the emergence of the Seekers and how they fit into our development roadmap. I’m including at the end here a few questions (some from the community and some pre-empted) and their answers.

Q & A

Do I need to own a Seeker to run a Sylo Node?

You can still run a node without owning a Seeker. However, you will need to own a Seeker to join epochs and earn incentives from the network. The Sylo Node can still provide a variety of free services that you can use to provide decentralised communication to whomever you choose without needing to have a Seeker.

If I have to own a Seeker, will this make it more expensive to run a node?

Generally speaking, requiring Seeker ownership should not make it more expensive to run a node. Node operators must already choose how much to stake in their node, so the price of a Seeker should be absorbed by this calculus. Remember, it doesn’t matter which Seeker you own, so if you just want to run a node you can acquire the most common of common Seeker.

If you have any questions or queries, please feel free to reach out to our team at support@sylo.io or via our social channels here: Twitter