If you pay attention to the world trend of the blockchain, you will definitely find that POS is one of the hottest topics this year. Ethereum began to turn to PoS, Cosmos, Tezos and other heavyweight PoS consensus mechanism public chain projects have been or will start this year, under this guise, many teams have begun full-time node business.
In early February of this year, a start-up company focused on PoS organizations, Staked.us, completed a $4.5 million seed round of financing, and Pantera Capital, Coinbase Ventures and other well-known investment institutions in the blockchain industry were involved in the investment. Obviously, some capital giants have begun to lay out in the PoS blockchain economy.
What is a PoS blockchain? PoS is a novel consensus mechanism. In this blockchain network, the most basic job of a node is to be responsible for packing and exporting transaction information and maintaining network operation. Its function is like a miner in the blockchain of the PoW consensus mechanism. Bitcoin and miners in Ethereum, but PoS miners don't need to stack computing power, and ordinary servers are enough.
In PoW, there is profit from mining. In the PoS network, the revenue of the node “mining” is obtained by adding the token to the blockchain system. In June of last year, EOS's super-node election made the word "node" much more concerned. At that time, the annual growth rate of the EOS network was 5%, that is, 50 million EOS will be distributed to the nodes every year. According to the highest price of EOS, the nodes can be divided into more than 7 billion RMB each year.
EOS is not a typical representative of PoS. EOS is actually a blockchain of the DPoS consensus mechanism. After the tokens held by the user are mortgaged, they cannot directly obtain the proceeds, and the income is the node team. Because EOS prohibits dividends, the node's dividend strategy can only be sneaked. On the PoS blockchain represented by Cosmos, Polkadot, and IOST, the user can directly obtain the corresponding dividend after mortgageting his token to the node.
Attracted by high-yield, many institutions and celebrities in the circle have announced their candidacy, and a large number of players in the currency circle have begun to pay attention to the business of PoS nodes. To explore more about PoS nodes, we interviewed the Node Pacific node team focused on governance on the PoS chain and the Wetez wallet team specializing in the PoS blockchain.
Node cost
"The node is the blood of the public chain." Catherine (the CEO of NodePacific) said to block block rhythm BlockBeats.
Node Pacific is an international team specializing in public chain nodes and community governance. Like many teams, EOS is the first public chain project of Node Pacific to become a node, and then continue to be in BTS, IOST, Lambda, IrisNET, CMT, Meetone, etc. have become the nodes in nearly 20 chains, and they are one of the teams specializing in the business of nodes.
Generally speaking, as a node in the PoS chain, the user must first mortgage a certain amount of tokens (specifically staking), and the user can become a node by reaching the mortgage threshold required by the system. After the implementation of the node function, the system will send a reward to the node. In general, the number of rewards is proportional to the number of tokens mortgaged by the user.
Increase the degree of decentralization, package data out of the block, maintain the stability of the network, these are the basic functions of the node, only one server can be done to complete this work. In addition to these superficial things, Catherine believes that in order for the public chain project to develop better, the node actually has to do a lot of work that others can't see. "The other costs depend on what value you can bring to this chain?" Catherine said.
What Catherine calls "other costs" is their community governance experience. Starting with EOS, Node Pacific began to focus on community governance. From the handling of EOS community token loss cases, the organization of community governance conferences, and now become the main sponsoring team of more and more PoS community governance, their large cost is used in community governance.
"I have seen too many public chain recruitment nodes in order to attract large and institutional lock-ups and temporarily maintain the price of the currency with considerable participation income. This is not long-term. There are some "nodes" that are just gimmicks, and the server remains. In their own hands, the famous "nodes" are famous speculative institutions and exchanges," Catherine said. "These publicity effects are really good, but how much real value and significance?"
More than one person agrees with this point of view. We talked to Jeff of the Wetez wallet team about this problem. He believes that if a chain, most of the nodes only complete the basic block work, only the rewards obtained by the mortgage token, then the chain Development is very problematic. "The ecological incentives for this chain may be wrong," Jeff said.
In Jeff's view, a healthy ecology is that nodes can develop applications, and the entire chain will benefit, and the holders will benefit. This is a virtuous circle. This is in fact inconsistent with Node Pacific. Catherine also said that the team is developing a DApp for community governance, hoping to reduce the artificial workload through smart contracts and make community governance more convenient and efficient.
Node revenue
The revenue of the nodes is basically based on the system's tokens, so the rate of token increase is a key indicator. Different PoS chains have different issuance rates, such as IOST is 2% per year and Cosmos is 7%-20%.
In theory, the higher the rate of increase, the more rewards the nodes receive. However, using too high a rate of increase to attract the entry of node players is actually very risky, provided that the underlying construction is to keep up, that is, the technical and community activity of the project can support the price. If the bottom layer doesn't work, then the result of using a high burst rate to attract users will only be a price crash.
What about the benefits of these PoS chains?
"At the moment, EOS has the highest revenue, after all, the price is the highest," Catherine said. Node Pacific is now ranked 36th in the EOS node, with a daily reward of approximately 318 EOS. But if you don't look at the price, just look at the rate of return?
"2%-25% yield is relatively normal," Jeff said. Wetez wallet has been focusing on several mainstream PoS projects. From the data, Tezos is about 7% annualized, Cosmos is about 7% more, and Irisnet is about 18%.
The foreign Diar research team summarized the current PoS project, estimated and plotted the profitability chart (see the figure below), the highest is the Horizen blockchain, the revenue is up to 30%, the lowest is the Neo blockchain, and the return is 3 %, after the future Ethereum transformation PoS consensus mechanism, its yield is about 4.45%.
Then there is another question. Do ordinary users have to entrust the coins in their hands to the nodes?
In the pure PoS chain, the average user can entrust the coin to the node, so that the node can get more rewards, and the extra reward will be distributed to the client.
"We encourage users to exercise their powers of entrustment," Catherine said. This is actually an ecologically win-win approach. Ideally, the holder of the currency will entrust the coin to the node he is optimistic about, and the node will get more rewards to better serve the ecology.
Nowadays, many users have entrusted their own money to the nodes. In the discussion with Jeff, he found that there is a clear trend at this stage, and those nodes that seem to have security features can get more commissions. For example, Cryptium on Tezos, such as Certus and Bitfish that won the Cosmos contest. Because of the security features, users can trust the money to them without worrying about problems.
The Diar team also compiled the total mortgage and commission rate for tokens in the current PoS chain.
Future form of the node
Since the user chooses "Security Features" as a trend for PoS delegation, the wallet seems to have a natural nodeization advantage.
As we all know, security is a must-have feature of wallet products, and wallets have a large number of user groups. They seem to be the most suitable for them to do nodes. In turn, some teams that have become nodes will not attract more. User, go to the wallet? In the development of the PoS chain, will the wallet and nodes be combined into one?
First of all, the tendency of the node team to make wallets is not too true for Jeff. He believes that the wallet needs to have a dedicated technical team. The PoS economy has not really developed yet. The coins that the nodes get commissioned are actually limited to several chains. At present, the nodes with excellent and large commissions mainly emphasize security. More likely, because of the security features, it provides services for the organization's operational nodes.
The wallet team started to do nodes because of a large number of users. This is already a trend, and it has already happened, such as Cobo wallet. If the exchange is also regarded as a wallet, the fire coin also has a fire coin pool node, and Coinbase and Gate.io have also provided PoS token entrustment services. Because they have traffic, they can naturally do node-trusted business, which is a natural advantage.
"Users delegate tokens, which is a sticky operation because users need to commission tokens and check earnings on a regular basis," Jeff said. This kind of operation that enhances the user's stickiness is most needed for formal exchanges and wallets. It is very likely that during the development of PoS, the provision of PoS entrustment services will become standard for exchanges or wallets.
Undoubtedly, with the completion of PoS node operation and mortgage service, more and more teams will participate in the operation of the node, and more and more users will mortgage their own tokens. Because they understand a consensus in their hearts: as long as the price of the currency does not fall, whether it is a mortgage token, or running a node, this is a stable sale.
