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41 lines
2.6 KiB
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41 lines
2.6 KiB
Plaintext
---
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title: "Staking"
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sidebarTitle: "Staking Functions"
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description: "Understand the staking mechanism on Sonr"
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icon: "vault"
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---
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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.
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<Tip>
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Demand = Obtain rewards, goods, or services through staking or locking up the token.
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Supply = Tokens staked or locked up.
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</Tip>
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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.
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With this being said, there are some challenges in implementing staking:
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- The token must already have value
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- Allocating power or influence via staking gives major edge to wealthy users
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- They are frequently subject to gaming and coordination problems
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However there is substantial benefit in incorporating a staking mechanism, with the following criteria met we can create a sustainable design:
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1. The upfront capital required to stake should not significantly discourage them to stake
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2. If a stakeholder group is making decisions that materially harm the network, they would be punished via slashing the stake.
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3. Stakeholders can make decisions that positively impact the future network health and token price, therefore holding stake can promote positive Sonr growth
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### Validator Nodes for Cosmos ASB
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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.
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### IPFS Storage Nodes (excluding FileCoin)
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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.
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### Governance Participants
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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.
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