Wanchain Proof of Stake Validator Economics for Upcoming Alpha Testing
An overview of Wanchain’s Proof of Stake economics, definitions, and next steps
Intro to Wanchain
First, you may be wondering what is Wanchain? Wanchain is a blockchain infrastructure connecting the decentralized financial world. The blockchain, a fork of Ethereum, adds cross-chain and privacy protection, in addition to private chains, to create a platform capable of serving as a financial hub of bridged networks. These bridges can be public-to-public (Ethereum to Bitcoin), public-to-private (Ethereum-to-Enterprise), or private-to-private (Enterprise-to-Enterprise). The platform uses secure multi-party computation and a locking mechanism to lock funds on the native chains and create a proxy token for use on the Wanchain platform. Additionally, Wanchain is rolling out its own Proof of Stake consensus in 2019, and is currently using Proof of Work. Current integrations include the Ethereum and Bitcoin blockchains, and several ERC20 tokens. Wanchain’s next blockchain bridge will be to EOS.
Wancoin (WAN) — The Wancoin is the native currency staked by Validator nodes to secure and run Wanchain’s network. Validator nodes will gain “Staking Power” (see below) in Wanchain’s Proof of Stake consensus by staking more WAN and by committing to a longer period of staking. In return for Validators and Delegators staking in Wanchain’s network, both groups will be rewarded with Wancoins when their node is selected to produce a given set of blocks in an epoch (see “epoch” below). Validators and Delegators are also rewarded with transaction fees during the epoch, as the Wancoin is also used for network transaction fees in decentralized applications and cross-blockchain transactions.
Validators — Validators on the Wanchain network secure the network by playing one of two roles (see RNP and EL below) in the process of proposing, validating, and finalizing blocks. Validators can take two forms in the Galaxy consensus, either taking delegation or being a non-delegating node (below). An epoch lasts 2 days, so there are approximately 15 epochs per month. To run a standard Validator node that can accept delegation, it will require a larger amount of WAN than it will to run a non-delegating validator.
Validator Delegate Ratio — This is the ratio of stake between Validator and Delegators. Once the ratio has been reach, the Validator will need to increase their stake to make more room for additional delegation.
Non-Delegating Validators — Non-delegating Validator nodes are nodes with a lower minimum WAN required and cannot accept delegation. There is no difference in how the two types of nodes participate in consensus, only in their ability to receive delegations. In order to become a Validator node, a larger amount of WAN must be staked by the node operator than the Non-Delegating node.
Epoch — An epoch is one protocol cycle, which occurs roughly every two days. Nodes participating in the epoch, lasting 1400 blocks, will be rewarded for their contributions as Random Number Proposers or Epoch Leaders.
Random Number Proposer (RNP) — The RNP group is responsible for the critical work of jointly generating a random number for each block, to be used as an important seed for selecting which nodes make up the Epoch Leader groups to produce a given block. More technical detail in the Galaxy consensus research paper.
Epoch Leader (EL) — Similar to the RNP nodes, the Epoch Leader nodes are selected using the probability according to the proportion of each node’s Staking Power compared to all other nodes. The EL group is responsible for validating transactions and packaging them into blocks.
Staking Power — Staking Power, unique to Wanchain’s Galaxy consensus and referred to as wanstake in the research paper, is earned by Validators mainly by the amount of WAN staked in the node. However, there is also a time multiplier applied when Validators commit to a longer lock period for their node.
Withdraw Delay — Validators have a 1–2 day withdraw delay, making it possible to withdraw funds after any given epoch is complete. Delegators can withdraw at any time, but there is a delay of approximately 7–8 days to avoid long range attacks.
Commission Rate — The commission rate is the fee charged by Validators for their service to delegators. Most Validators charge somewhere in the 10–20% range in the current market offerings.
Wanchain Proof of Stake Parameters and Economics
The following parameters and economic figures are based on weeks of market research feedback from our community and from some of the top staking services in the world. These figures are meant to illustrate the staking economics going into our upcoming Alpha testing phase. The numbers are subject to change based on community feedback and takeaways from the results of Alpha and Beta testing.
If you are interested in running a Wanchain Validator node or if you have feedback, please reach out to us at one of the following channels:
Wanchain Node Parameters
- Random Number Proposers Selected per Epoch: 25
- Epoch Leaders Selected per Epoch: 24
- Validator Node Minimum: 50,000 WAN
- Validator Delegate Ratio: 1:5
- Non-Delegating Validator Minimum: 10,000 WAN
- Delegator Minimum: 100 WAN
- Delegator Lock: No lock, delegators are completely liquid. The Galaxy consensus just requires a 5–7 day unbonding period.
Summary of Current Economic Model
The figures below are the outputs of an internal economic model that takes into accounts the mathematical complexities and many variables that impact a staking solution.
- Estimated Delegator Yield: ~11%
- Estimated Minimum Validator Reward in WAN(Year 1): 13,100 WAN (*assumes only 50k WAN minimum and 5:1 ratio reached, for 300k WAN total)
- Estimated Minimum Validator Reward in WAN (Year 2): 15,050 WAN (*assumes only 50k WAN minimum and 5:1 ratio reached, for 300k WAN total)
- Estimated Total Supply at Launch: 110,000,000
- Assumed % of Supply Staked at Launch: 20%
- Assumed Validator Lock Time: 6 months (1.5x time multiplier in the Staking Power calculation)
- Assumed Validator Commission Rate: 15%
- Est. Probability of Validator to win one reward per week: 94.4%
Return Rate from Foundation Tokens: Starts at 2.5M WAN then reduced by 12% per year.
- Year 1: 11.90% 2,500,000.00
- Year 2: 10.48% 2,200,000.00
- Year 3: 7.86% 1,936,000.00
- Year 4: 5.89% 1,703,680.00
- Year 5: 4.42% 1,499,238.40
- Year 6: 3.31% 1,319,329.79
- Year 7: 2.49% 1,161,010.22
- Year 8: 1.86% 1,021,688.99
- Year 9: 1.40% 899,086.31
- Year 10: 1.05% 791,195.95
Minimum Hardware Requirements
- AWS m4.xlarge
- CPU: 4
- Disk 256G
Other Features of Wanchain Proof of Stake
Auto-reward Delegators: Staking rewards will be automatically sent to delegators and will not require Validators to manually distribute to their delegators.
We will continue to release details about Alpha and beta testing in the near future. Before mainnet launch, we will release the final parameters and economic expectations that will apply to the mainnet launch.
The Wanchain Team
Wanchain is the infrastructure connecting the decentralized financial world. Wanchain’s live cross-blockchain solution is EVM-based, includes optional private transactions, and provides a decentralized, permissionless, and secure approach for interoperability. Wanchain has employees globally with teams in Beijing (China), Austin (USA), London (UK), Kuala Lumpur (Malaysia), Paris (France), and Madrid (Spain).
You can find more information about Wanchain on our website. Additionally, you can reach us through Telegram, Discord, Medium, Twitter, and Reddit. You can also sign up for our monthly email newsletter here.