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Upcoming consensus staking

By June 11, 2023Announcement, Crankk, News

Dear Crankksters,

We understand that many people are eager to learn about the upcoming consensus staking process. In this article, we will provide an overview of various aspects and offer background information to help you understand the reasoning behind its design.

Consensus nodes play a crucial role in initiating and closing beaconing/witnessing cycles, as well as dispensing rewards once the relevant information is available on the blockchain. This information is encrypted using the public key of the directing consensus node and decrypted using its corresponding private key.

In the past, consensus nodes were limited to completing one cycle at a time. Based on experience and statistics, it was determined that a ratio of 1:20, with one consensus node for every 20 nodes, worked well and allowed consensus nodes to handle the workload comfortably. However, the current ratio is closer to 1:50, and recent partial LoRa server outages have revealed that a backlog of pending cycles can occur. To address this, the behavior of consensus nodes has been adjusted to react quickly to backlogs and handle multiple cycles simultaneously, but only when necessary. The ratio for the upcoming consensus staking will remain 1:20.

It’s worth noting that this behavior handling is open source, so technically someone with a consensus node could modify it. However, there are multiple reasons why it’s not advisable to do so. Importantly, all cycle handling occurs on the blockchain, and the number of daily handled cycles by each consensus node is tracked. If a consensus node exhibits an unusual discrepancy compared to the average, the owner must provide an explanation and may face penalties for the node’s unusual behavior. The ultimate goal is to make the consensus compliance checking as algorithmic as possible, with the intention of eventually moving it to the blockchain.

To maintain the integrity of the network, certain rules and conditions will apply. Consensus node privilege will be removed without staking return (penalized staked tokens will be burned) if:

• Consensus node KDA wallet remains underfunded for 3 days in a month. It will be checked hourly, so 72 of those checks must be below the threshold for this penalty to take effect. The required minimum KDA balance to operate as a consensus node is 0.1 KDA. You’ll get a notification each day reminding you of the fact.

• Consensus node completes less than 50% of the average consensus reward cycles per day or 50% more for 5 days in a month. You’ll get a notification each day reminding you of the fact. If you believe it’s not an issue you can resolve, opening a support ticket will be required.

Now let’s delve into the specifics of consensus staking. A total of 140 spots will be available for staking. This opportunity will be open to all current gateway owners, including existing consensus node owners. We have set a waiting period of maximum 5 days between staking and activating the consensus status. This waiting period is necessary because the network cannot operate without consensus nodes. Therefore, legacy consensus nodes will be gradually turned off as newly staked consensus nodes are activated. Like previous competitive rounds, staking for consensus will occur on the blockchain, ensuring transparent and verifiable recording of the spots and their owners.

The exact timing of the staking process will be announced separately, but should be coming up soon as we are nearing technical readiness to handle it. When we begin the public onboarding in the future, new consensus node spots will be offered in proportion to the total number of nodes. However, it is likely that these spots will be released in batches, as the team of consensus nodes can now handle temporary undercoverage.

The required staking value will be the equivalent of $300 in CRKK. It’s important to note that consecutive offerings may carry a different value. The KDA/USDT price will be determined by the actual public market data, while the KDA/CRKK price will be based on the 72-hour volumetric average price on our decentralized exchange (DeX). The CRKK value of the staking will be updated hourly. Staking for consensus will entail similar conditions as staking for PoNP, including a one-month lockout period, followed by a one-month waiting period, and a linearly decreasing penalty up to one year. After one year, the funds can be returned without penalty. If you decide to remain a consensus node without interruption, you’ll be required to re-stake at the current CRKK value before the end of the one-year period.

It’s important to consider the expected gas fee cost associated with being a consensus node. Consensus node gas fees have recently been greatly optimized. For now, we can only rely on 2 days of current data, which tells us that the average daily KDA consumption is 1.266. Based on the coverage increase of the planned number of consensus nodes, the KDA consumption would be equal to 0.456 KDA per day.

However, it’s essential to keep in mind that there are multiple factors involved, and the gas fee costs and earnings can vary. These indicative estimates should not be taken as absolute, and we reserve the right for human review and decision if a node is found to be working around the rules in an exploitative manner. A maximum of 3 consensus node spots may be allocated for internal testing purposes in addition to the spots offered.

We hope this article has answered most of your questions and concerns regarding consensus staking and we helped you make an informed decision about whether to participate.

Your Crankk Team