NOTE: this document is created and maintained by the Findora DAO to help the Findora community understand the primitives of proof of stake on the Findora Native Chain. Join Findora DAO to help build the Findora ecosystem.
Section1: Validator’s Guide to Staking on Findora
Section2: Delegator’s Guide to Staking on Findora
Section3: Frequently Asked Question
Validator’s Guide to Staking on Findora
Validator Setup and Configuration
Validators on Findora Mainnet Beta can contribute to consensus, participate in future governance, and act as stewards of the organic evolution of the Findora public network. Validators can algorithmically earn block rewards for proposing and signing blocks on Findora as part of the consensus process. Findora is a completely permissionless blockchain network. Anyone can operate a validator without permission or authorization from anyone.
To become a validator on the Findora network, you need:
1/ hardware requirements: Minimum: 8GB RAM, 8 Core CPU, 100GB Hard Disk; Recommended: 16GB RAM, 16 Core CPU, 300GB Hard Disk.
2/ minimum self-stake: validators must stake a minimum of 10,000 FRA to register as a validator. Before you can stake FRA to your validator, you must first transfer FRA to the Findora Address (i.e. wallet address) of your validator.
3/ to configure the following fields of your validator, this info will be displayed on the validator dashboard: initial staked FRA units; commission rate; memo (including: name; description; website; logo).
4/ time commitment. Guarantee high uptime (to ensure the stability and performance quality of the Findora network) and be honest (i.e. no double-signing of transactions). Low uptime and “cheating” validators will be fined by the network.
For a detailed guide on how to set up and configure your validator, please follow the Validator Guide in the Findora Wiki.
Findora uses the Tendermint consensus protocol to select which validator to write the next block (~16s per block) on the Findora blockchain ledger. The top 110 validators with the most FRA staked during each block will be automatically selected as the set of validators are in the “formal validators’ list” and are eligible to be part of the consensus process for the particular block.
The formal validator list is updated every 4 blocks, including:
- remove & add validators
- adjust their voting powers
The Findora network pays out two types of rewards to validators (and their delegators) — FRA block rewards and (under certain circumstances) a block proposer bonus. FRA rewards are minted from every new block as a coinbase transaction.
1/ FRA Block Rewards: block rewards are paid to the top 110 validators that stake (or are delegated with) the most FRAs. At the micro-level, for each block, the minted block rewards are only paid to the specific block proposer. The annualized rate at which block rewards are paid out is correlated to the percentile of Circulating Supply Staked (see next section).
2/ Block Proposer Bonus — this bonus is only paid out if the validator selected to propose the next block meets certain pre-commit voting criteria. The proposer bonus reward is paid only to the single validator that is proposing the next block and not split with its delegators.
The APY Rate Curve
FRA token rewards (and APY rates) are dynamic and based on an APY curve that adjusts up or down based on the amount of unlocked FRA staked system-wide.
1/ A lower % of unlocked tokens staked network-wide will lead to lower PoS network security. As a result, the APY rate will adjust higher whenever the staking ratio falls lower.
2/ The APY rate curve may be modified in the future subject to community voting, if needed, to better align with market requirements.
The Rate Curve is defined below:
Y = 1 / x * [Rate Modifier Constant]
Y = Annualized Block Rewards Rate (i.e. network-wide FRA rewards / network-wide FRA staked)
x = % Circulating Supply Staked (i.e. network-wide FRA staked / circulating FRA (non-foundational))
Rate Modifier Constant = 0.0536
- adjusts (up/down) the rewards rate at every point of the curve and thus, the # of FRA rewards minted for block rewards
For example, if the percentage of circulating supply staked is 2%, then the Findora network will distribute an annualized 268% rewards rate to incentivize more FRA holders to stake.
- A number of validators eligible for block rewards (i.e. in the formal validator list): the top 110 validators that stake (or are delegated with) the most FRAs are eligible for rewards.
- Minimum self-stake: a minimum stake of 1000 FRA is required to register a validator.
- Staking rewards: block rewards are dynamically adjusted based on the percentage of circulating supply staked. For example, at a staking rate of 10%, the block reward is 53.6% annualized; at a staking rate of 67%, the block reward is 8% annualized.
- Slashing & Penalties: double signatures — 5% FRA penalty; dropouts — 0.3 FRA penalty per block missed. Delegated tokens are subject to slashing, during the bonding and unbonding period.
- Voting power cap: voting power of a single validator is capped at 20%.
- Unbonding period: unbonding requires a 21-day wait, during which time delegations are still eligible for block rewards and subject to slashing risks.
- Reward distribution: block rewards are minted from every new block as a coinbase transaction and paid out with each block.
- Commission: the commission rate (%) the validator charges from the block reward. Block rewards are split between the validator and its delegators proportionally to their staked amount after the commission is charged.
Delegator’ Guide to Staking on Findora
Setup Findora Wallet
2/ Transfer FRA from an existing Findora wallet to your Findora Address (if you don’t own any FRA, you can buy from Kucoin or Gate.io).
3/ Go to the “STAKE” tab to stake your FRA tokens.
- Select a validator to delegate your FRA tokens to, you can check detailed info of a validator by clicking on the “View” button which directs you to Findorascan.io
- Enter the amount of the FRA tokens you wish to stake. When you click on the “Max” button, remember to reserve a minimum amount of FRA tokens to cover transaction fees
- By clicking on the “STAKE” button, you agree to immediately bond your FRA tokens with the validator to earn FRA rewards.
- Please carefully check the validator you choose, your delegated tokens are subject to slashing & penalties.
- By clicking on the “UNSTAKE” button, you unbond your FRA tokens with the validator.
- The unbonding period lasts 21 days. FRA that is in the process of being unbonded can not be traded on an exchange or sent to other users.
- Your FRA tokens are still eligible for the block rewards and slashing risk during the unbonding period.
How to pick a validator?
Go through Findora’s staking model and rewards mechanism before you kickstart your conquest — here’s a list of useful links:
- Staking is Live on Findora Anvil Testnet
- Findora Network Tokenomics
- Announcing Findora Frontier Program
- Node Setup Documentation
- Page | Wallet | Explorer
Q: How are staking rewards generated?
A: To encourage FRA owners to participate in staking, the network has allocated 420m FRA (out of the 21 billion FRA maximum supply created) to pay out as block rewards. These 420m FRA will be used to reward all stakers with FRA rewards (i.e. additional FRAs) for participating in staking/consensus voting.
Q: What are validators and what role do they play in the Findora ecosystem? How are staking rewards generated and claimed?
A: Validators are the nodes that allow FRA owners to stake their FRA (and thus help secure the network’s consensus voting process). The top 110 validators with the most FRA staked will participate in Findora’s blockchain consensus process。
Q: What is the token economic model for Findora? What channels are available to obtain FRA tokens at this stage?
A: In summary, there are 2 FRA rewards and 2 FRA penalties:
- Rewards include FRA rewards paid to all top 110 validators for each block and a Block Proposer Bonus (paid to the single validator that proposes a successful block)
- Penalties include a 5% double-signing fee and an offline penalty (when your server is offline as a top 110 validator)
More details about Findora network tokenomics are here ⇒https://findora.org/2021/07/findora-network-tokenomics/
You can purchase FRA on Gate.io or Kucoin.
Q: There are two key rules in Findora staking and token economy, one is dynamic block reward, and the other is the upper limit of voting rights, please introduce the design concept and principle of this set of rules.
– Dynamic block rewards will adjust annual FRA rewards higher when the percentage of unlocked tokens staked is very low. When the percent staked is low, it is easier to perform a BFT-based attack, so increasing the reward rates during these conditions will motivate users to stake and bring the percent staked to a more secure level.
– Voting Power Cap: A single validator is capped at 20% maximum voting power to help ensure Findora remains Byzantine-fault-tolerant (i.e. preventing ⅓ or more consensus voters from cheating), any single validator will be capped at a maximum of 20% voting power when determining consensus — regardless of the amount of FRA staked.
About Findora DAO
FinDAOra is promoting privacy in Web3 through the use of zero-knowledge proofs. By raising awareness of the need for privacy and building Findora communities, we’re creating a future of digital dignity where users control their data. Our strategy is to strengthen the Findora ecosystem and help develop it by distributing educational materials and leveraging the creativity of our members.