Announcement: Mainnet Growth & Decentralization Plan 2023

Since we launched our Mainnet in April 2022, Ternoa has received an exceptional level of support from our dedicated community.

With Nominated Proof-of-Stake (NPoS) consensus powering Ternoa, this support translated into a significant interest from holders to help secure and grow the network, as evidenced by two figures:

• After a couple of months, about 80 validators had been organically created by CAPS community stakeholders, with 43 operating today.
• After a year, more than 1300 holders are using nomination to decide which validators will be part of the active set.

Today, our ecosystem is growing as we put more and more focus on attracting and supporting promising projects to build on Ternoa. To sustain this growth and offer a better network overall to all builders, the time has come for accelerating decentralization.

In this context, we look forward to introducing two measures that will be implemented during the second semester of 2023:

1. We will increase our validator active set on a monthly basis with an indicative goal of 50 active validators by year end. Each increase in the validator set will be announced through our social media channels every month.
2. Validators in the waiting list will receive monthly CAPS rewards, acknowledging their valuable contribution to network stability. Calculations for treasury rewards to waiting list validators are detailed below, with updates announced through our social media channels.

A quick reminder: NPoS and why validators matter

At its core, a blockchain is a distributed and immutable ledger that relies on a network of validators to confirm and validate transactions. In the context of Ternoa, validators play a vital role in securing the network and achieving consensus on which transactions are valid and should be added to the blockchain. Validators are responsible for creating new blocks and ensuring the network remains robust and resistant to attacks.

NPoS is designed to achieve better decentralization and a more efficient network. It gives holders of all sizes a chance to play a crucial role as they are responsible for nominating the validators entering the active set at each new era.

The active set refers to the limited number of validators nominated to participate in the block production and validation process. Its size strongly correlates to the actual, and forecasted use of the infrastructure. It is also constrained by the total number of validators, since we need to keep a healthy amount of validators in the waiting list.

Ensuring a healthy balance between Active Set and Waitlist

Over the course of the first year of Mainnet operations, we could only notice how difficult it can get for new validators to enter the active set, due to the balancing role played by nominators.

This deterred some early operators, concerned about their chances of making it into the active set. Leading some to decide to stop running a validator altogether.

Because having validators in the waiting list matters and is mandatory to grow our network, we have decided to dedicate a portion of the token supply allocated to “Staking Rewards” to the distribution of monthly CAPS rewards to validators who had been running during all of a given month’s eras and did not make it once into the active set, based on the following formula:

• Average cost of running a validator (30$ this month = 2 000 CAPS)
• A specific “waiting validator APR” (20% this month)
• Applied to the minimum staking requirement of 150 000 CAPS
• Offered to a maximum of 40 inactive validators. If the number of inactive validators is greater than 40, the rewards slots will be attributed randomly.

In other words, all validators outside of the active set during the considered period would be receiving 3 875 CAPS broken down as follow:

• hardware cost compensation = 2 000 CAPS
• waiting validator rewards = 1 875 CAPS

These parameters are subject to change depending upon network growth. Updates will be shared in our documentation.

Then, active set increases will be sized on a monthly basis, to ensure we keep about as many validators in the waiting list, as in our active set.

Make sure you follow our social media accounts to keep in touch with active set increases, and incentive programs announcements.

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