Expanding OneLedger protocol, validation update

Posted by OneLedger on Oct 22, 2021 8:10:07 AM

OLT Validation update

 

We are happy to announce that we have reduced the Validation staking amount from 3M OLT to 0.5M OLT. Our goal is to promote greater community engagement; to this end we are looking for tech-savvy crypto enthusiasts and investors looking to earn additional incentives(20% to 25%). This is your opportunity to become a high yield validator now we have reduced the entry point by 84%. 

 

Validators approve transactions that have been submitted by a user or blockchain client. In addition, those interested in helping run the OneLedger network but cannot run a full node can participate as a Delegator, which grants participants 15-20% APY and increases network security.

For the new Validator, we would love to go through details on validation, including step-by-step directions on how to run a full node and how to stake as a validator.

What are Validators?

On OneLedger, we have two roles within staking: Validators and Delegators. Validators are node operators who each store a copy of the blockchain and must perform certain functions to keep the system secure. OneLedger validator nodes are responsible for authoring new blocks and voting in the finalization protocol.

A limited number of Validator nodes are elected each staking era by an election algorithm. This algorithm will automatically select the Validators with the highest total stake to fill the available slots.

You can check the total number of Validators on the block explorer.

Why are validators important to OneLedger?

Validators are an essential part of the Proof of Stake consensus mechanism. They are essentially the moderators of the staking system and have the significant job of authoring new blocks on the chain.

To have the most decentralized system possible, a protocol needs a decent number of different Validator nodes elected. This makes for the most incredible variety of staking options for the community and protects the system by preventing the chain from being controlled by one very wealthy individual. For example, if there are few Validators, one person with a reasonable amount of OLT could take all the Validator nodes, therefore taking complete control of the chain. On the other hand, when more people are Validating, it significantly increases the barrier to being elected.

Can anyone run a validator node?

Validator nodes can be run by anyone with hardware that meets the minimum requirements ( 250G storage 8G RAM).

However, it is important to remember that if a Validator fails to uphold their responsibilities, a portion of their stake will be slashed (fined). Therefore, if you are unsure about taking on the technical responsibility of Validating just yet, you can get to grips with the staking process as a delegator first.

The responsibilities of a Validator are:

  • Have a full node running (Please check Mainnet-Fullnode-Set-Up-Instructions-v0.18.11)
  • Create an account in the secure wallet using olclient command (Please check Account & Transfer)
  • Send at least 0.5 Million OLT to this account
    • You can use Chrome OneWallet extension to do this if the account you are sending from is in OneWallet
    • Or you can use olclient command to do this if the account you are sending from is in another node's secure wallet(Please check Account & Transfer)
  • This account will be referred as "staking account" in the rest of this tutorial

You can learn more about how to set up a Validator node below, please remind that the stake amount has decreased to 0.5m from 3m.

  1. Mainnet Validator & Staking Tutorial v0.18.11
  2. Mainnet Validator & Block Rewards Tutorial v0.18.11
  3. Tutorial - How to get OLT to stake
  4. Tutorial - Running A Fullnode (watch video)
  5. Tutorial - Validator staking (watch video)
  6. Tutorial - Run validation with docker

What is a validator’s commission rate?

 

To calculate the estimated Validator Staking rewards, please download the OneWallet.

 

 

We are introducing a unique Tier-based rewarding mechanism to encourage community participation and ensure the sustainability of the OneLedger network in the long-run.

 

The Tiers are identified as follows:

 

Number of Validators

Tier

1-16

1

17-32

2

33-64

3

Check the current validator set

Before staking, we need to check the current validator set in Mainnet network, and find the proper staking amount we need.

  • If there are fewer than 64 active validators in the network then we need to stake at least 0.5 Million OLT to become a validator.
  • If there are already 64 active validators in the network then we need to stake more than at least one of them to become a validator. 

The distribution of the estimated rewards is as follows:

 

*all staking and reward numbers are given in OLT. We have estimated a fixed number of validators and tokens staked for each year. In reality, these numbers could be higher or lower.

 

Validators

Tiers

Staking Amount (per Validator)

Minimum Annual Return

Total Distribution

Validator Revenue

Max annual allocation per year

16

Tier 1

500,000

20%

1,600,000

100,000

70m (Year 1)

32

Tier 2

500,000

20%

3,200,000

100,000

70m (Year 2)

64

Tier 3

500,000

20%

6,400,000

100,000

40m (Year 3)

64

Tier 3

500,000

20%

6,400,000

100,000

40m (Year 4)

64

Tier 3

500,000

20%

6,400,000

100,000

30m (Year 5)

64

Tier 3

500,000

15%

4,800,000

75,000

30m per year until all rewards distributed (Year x)

Table 1: Distribution of Rewards

 

A couple of things to keep in mind regarding the table above:

 

  1. The above numbers are based on the assumption that each Validator will host an equivalent of 0.5 million OLT. Actual rewards may differ based on the number of tokens staked.
  2. You may want to keep the Tiers in mind as we move forward explaining a scenario

Now, let's explain the details through a scenario.

 

Scenario

 

Tom is a Validator. He stakes 0.5m tokens into the OneLedger network during Year 1. The amount of rewards generated for Tom would be as follows:

 

OLT Staked by Tom

Total Number of Validators

Tier

Total Distribution for that Tier

Tom's Return

Annual Return

500,000

16

Tier 1

1,600,000

100,000

20%

500,000

8

Tier 1

1,600,000

200,000

40%

500,000

32

Tier 2

3,200,000

100,000

20%

500,000

17

Tier 2

3,199,400

188,200

37.64%

500,000

64

Tier 3

6,400,000

100,000

20%

500,000

40

Tier 3

6,400,000

160,000

32%

Table 2: Rewards distributed to Tom

 

As you may notice, the minimum ROI Tom earns during a specific time period is 20% (based on the first 5 years as per Table 1), with a potential to earn higher depending on the number of Validators in the network and the Total Distribution for that Tier.



Can you run more than one Validator node?

You can run as many Validator nodes as you have the capacity to. You can set up validator nodes to run on the cloud so that you don’t need to maintain the physical hardware. 

 

Where can I get support?

If you need any help with setting up the Fullnode or any technical assistance, our Development team would be more than happy to assist you through the official OneLedger Development Channel.

 

Tags: TECH, GENERAL, ALL