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Prad Nukala
2025-10-03 14:45:52 -04:00
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docs/reference/economics/staking.mdx
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---
title: "Staking"
sidebarTitle: "Staking Functions"
description: "Understand the staking mechanism on Sonr"
icon: "vault"
---
The clear path for the underlying application for staking is utilizing a Delegated Proof of Stake (DPoS) validation mechanism. Down the line Sonr will provide IPFS storage nodes, and governance participation in the staking model.
<Tip>
Demand = Obtain rewards, goods, or services through staking or locking up the token.
Supply = Tokens staked or locked up.
</Tip>
On Sonr we will be leveraging a **delegate stake** mechanism in order to **optimize buy-in** for users in the network. It imposes an **excess opportunity cost** if **slashing** is implemented.
With this being said, there are some challenges in implementing staking:
- The token must already have value
- Allocating power or influence via staking gives major edge to wealthy users
- They are frequently subject to gaming and coordination problems
However there is substantial benefit in incorporating a staking mechanism, with the following criteria met we can create a sustainable design:
1. The upfront capital required to stake should not significantly discourage them to stake
2. If a stakeholder group is making decisions that materially harm the network, they would be punished via slashing the stake.
3. Stakeholders can make decisions that positively impact the future network health and token price, therefore holding stake can promote positive Sonr growth
### Validator Nodes for Cosmos ASB
Sonr is a Cosmos powered blockchain which is powered by a TenderMint validation mechanism. The default consensus for TenderMint is DPoS and works with our current ABCI implementation for Transaction Verification. DPoS is a twist on Proof of Stake consensus that relies upon a group of delegates to validate blocks on behalf of all nodes in the network . Witnesses are elected by stakeholders at a rate of one vote per share per witness . Coin age is irrelevant. All coins that are mature will add the same staking weight (usually 1 in the wallet hover display) Results in stable, consistent interest only for active wallets and only with small inputs.
### IPFS Storage Nodes (excluding FileCoin)
When deploying standalone highway nodes, requiring minimum stake would be an additional method to enforce availability requirements. By having a stake we can ensure that the user deploying a node has a base level of buy-in within the ecosystem.
### Governance Participants
We will be incorporating a similar strategy to AlgoRand in our governance rollout. This is covered more extensively in the [Governance](https://www.notion.so/Governance-af1251b1b7aa41fab16c53dd9fe6ef63) section.