Takamaka staking reward
INTRODUCTION
The economic model is one of the key factors determining the success of a blockchain project and of any currency. It is about finding the right balance between infrastructure costs and benefits for all parties involved.
As known, Takamaka’s vision is to build a distributed platform to enable transparent information flow, efficient collaboration and high-speed value transfers.
Much of the profit of a blockchain Proof Of Stake (PoS) comes from mining nodes and stakeholders that determine its technological value: speed, efficiency in confirming transactions and smart contracts.
Both business enterprises and individual currency holders (stakeholders) of this system will get the right economic reward that will grow proportionally to the network efficiency, allowing benefit for all.
SLOT AND EPOCH
Takamaka’ s algorithm is to all intents and purposes a PoS, built on a 30-second time division called SLOT, in which a mined block can be filled till a maximum of 10,000 transactions.
After 8 days and 8 hours a complete cycle ends: it is called EPOCH and contains a total of 24000 blocks.
This value is obtained according to this calculation:
a SLOT consists of one block = 1 block in 30 sec.
2 blocks in 1min
120 blocks in 1h
2880 blocks in 24h
24000 blocks in 8 days, 8 hours
GREEN AND RED TOKENS
As known, in Takamaka there are two types of tokens used for the operation of the network, red and green tokens.
The first is stable and guaranteed by AiliA SA and it is worth 1 usd.
This can be purchased in the Takamaka marketplace and allows you to pay for all transactions on the network (transactions, fees, Smart Contract), but it is in no way involved in the mining activity.
Those who want to operate in the Takamaka network have to buy red tokens, because the green token, not directly exchangeable with the red one and generated by the mining activity, is expensive and unprofitable for operations with constant price.
This is actually used to pay the stakeholder premium.
If I wanted to buy the green token, I could do it for an estimated price of about 2 usd. However, since it makes no sense to use it to manage Smart contracts, transaction fees and other activities on the network, it becomes attractive for mining activity: I bet a mining node and receive a premium paid by green token, which will be recognized directly on my wallet at the end of each EPOCH.
ECONOMIC CALCULATION
In many blockchain besed on PoS algorithm, it is impossible or extremely complex to calculate and estimate the effort required to include a certain transaction in a block, even worse if you try to assess the cost of processing intelligent contracts, which require the use of CPU, RAM and power consumption.
It is therefore difficult to work out an economic reward.
But a decisive factor in accurately calculating the costs, whether transaction costs or Smart contract processing costs, have been identified in the following service factors:
- Data archive
- Working Memory
- Processor
These parameters have been assigned a weight, expressed as a multiplier factor. The higher the multiplier, the more expensive the use of this resource and consequently the higher the cost of its use.
Through a formula, this allowed to express the calculation of operating costs and then convert the cost into tokens.
REWARDS
A node can undermine from a minimum of 60 to a maximum of 120 blocks, redistributing the prize with green and red tokens, between nodes and stakeholders who have targeted it. The 80% of green and red tokens is distributed in proportion to the bet made on the node to each stakeholder, the 20% remains at the node, which pays for the activities and costs incurred.
Let us make an example
Supposing we made a bet from our wallet on the not always particularly efficient nodeT, which in the EPOCH under examination managed to undermine 60 Blocks.
Under optimal conditions the nodeT has undermined only and exclusively transactions, fees and Smart Contract, receiving for each single transaction an average reward of 0.10 Cent.
Who works on Takamaka’s network already knows that the cost of operations is 0.10 cents per TX, which will have to pay directly to the miner.
This value is to all intents and purposes an average cost, which takes into account the computing power of the node, RAM and Cpu, electricity consumption and information storage capacity.
If in the examined EPOCH the nodeT resolved 60,000Tx (i.e. it validated an average of 1000 Tx per Block), this means that it was able to obtain an economic consideration of 0.10X60,000= 6,000 Eur, retaining 20% for itself and redistributing the remaining 80% to the stakeholders who supported its activity.
The compensation is paid both with green tokens and red tokens and may also initially be exchanged in euros, directly on AiliA SA’s Marketplace.
Having placed a bet on nodeT exactly 8 days 8 hours later, I will automatically receive a token prize on my wallet that will be directly proportional to my share on that node.
Considering the total of the red and green tokens, minus the 20% paid as compensation to the server manager, the remaining 80% (holder compensation share) is divided proportionally among the holders.
If a total of 10,000 green tokens are bet on the node and my share is 1,000, I will be entitled to 10% of the holder compensation The yield can vary greatly and proportionally to the number of active participants.
Obviously the nodeT has undermined only 60 blocks of the 120 available, but those who bet their green tokens on the nodeV, which instead tried to undermine all 120 blocks available to EPOCH, with the same stakes and bettors invested, earned at least double.
COINBASE REWARD
Assume for contradiction that the nodeT cannot process any transaction and that in an EPOCH the 60 blocks are completely empty.
In this specific circumstance, the node is paid for the COINBASE only, i.e. for having undermined the block, although empty, guaranteeing efficiency and functionality of the blockchain. The corresponding value is 1 green token per block.
In EPOCH the node, having undermined only COINBASE, will receive 60 green tokens and with the same logic will start the distribution of profits: 20% will be retained by the nodeT, the rest distributed among all the better.
Using the previous values (1,000 tokens out of a total of 10,000):
1. reward due to the holders:
60*0.8 = 48 Tokens
2. applying the proportion:
10% of 48 tokens is 4.8 tokens. These 4.8 tokens will be the reward for the stake bet on the node.
TOTAL SUPPLY
Green tokens will be released in a time of 100 years, for a total of 105,120,000, while red tokens were generated in the genesis block for a consideration of 100,000,000,000 and released upon request by AiliA SA.
Both tokens are Utility, but while the red token can be purchased exclusively on the AiliA SA marketplace, the green one will be initially exchangeable our marketplace and later on forthcoming Exchanges.
