Proof-of-Stake Validator

Cosmos (ATOM)

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by coingecko
Rewards*

*estimated
Commission

at KysenPool
Uptime

at KysenPool
Bonded

 
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The Outpost

KysenPool presents the Cosmos Outpost, a macro-economic insights and analytics platform for the Cosmos Network. Visit CosmosOutpost.io today and checkout the latest trends within the network chain to help make well-informed decisions.

Networks

We are on these Proof-of-Stake blockchain networks

Status: Live
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Status: Live
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Status: Live
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Status: Live
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Status: Testnet
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Status: Research
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Status: Research
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Status: Research
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Frequently Asked Questions

What is a Blockchain?

Wikipedia describes “A blockchain, originally block chain, is a growing list of records, called blocks, that are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data (generally represented as a Merkle tree).”

Well, what is that again? You can think of it as a series of messages linked to one another in an unbreakable historical chain, and it continues to grow over time in fairly consistent time periods between each block, just like the Old Faithful!

You can think of blocks in a blockchain as set of messages that may or may not contain transactions in them. They contain a breadcrumb of information from past blocks plus its own block's unique identification. They may contain ledger-based information that record messages such as “Alice sent Bob a token”, “Jane bought a cryptokitty with X tokens”, etc. When new blocks are produced, rewards are minted in small fractions, given to Miners or Validators that help complete those transactions.

There are several algorithms out there that have ways to generate new blocks in a blockchain.

Bitcoin for example uses something called a "Proof of Work" (PoW) block generation mechanic, requiring mathematical calculations by very specialized computers, called Miners. They literally use mathematics to draw out a set of numbers and "mine" those field of numbers until one matches the criteria to become the next block. The newly found block is then broadcasted out to a community of Miners to be confirmed and to reach a consensus about the legitimacy of newly minted blocks. All miners running legitimate software will then work together to support one another in these block confirmations.

Another popular method to generate new blocks is something called "Proof-of-Stake" (of PoS). There are several flavors of PoS. In general it's another type of consensus algorithmic where the next block is chosen by a candidate that has a stake placed into the same network that they run PoS for and extend the blockchain through a simpler algorithm that does not require heavy computation. The new block proposers are rotated amongst a community of proposers, called Validators, to propose new blocks, and also validate blocks proposed by their peer validators.

The role of Validators are to run a blockchain computer servers that will participate in a block proposals and also validate new blocks generated by others, and to reach the agreement, or consensus, of the legitimacy of the next block within a certain time interval per block. Validators broadcast votes which contain cryptographic signatures signed by their private key. Validators commit new blocks in the blockchain and receive revenue in exchange for their work. These revenue are often in a form of the blockchain tokens, or coins. Validators usually participate in governance by voting on proposals for changes around future of the PoS network's behavior.

Staking is available with Proof-of-Stake blockchains that have an incentive structure for delegating the tokens to blockchain nodes, specifically for which are hosted by Validators. This model is called Delegated Proof-of-Stake. Delegating tokens to Validators encourages node operators to run legitimate code that supports the PoS blockchain creating an entire community of Validator node operators.

The delegated tokens are paid "interest" when they're staked with a Validator node. Long-term blockchain believers are incentivized to hold their tokens even longer and to help them with this, they can “stake” their coins in support of the Proof-of-Stake (PoS) network and receive rewards in return.

PoS Blockchains, like any other blockchains, have an incentive system built in as part of its token economy. Speculators trade cryptocurrency tokens in hopes of making a quick profit. Stakers are long term token holders that would stake actual financial interests into a blockchain initiative as a belief in a blockchain, in order to run the blockchain properly by enabling Validators to run servers that will support the PoS network. In return, the blockchain algorithm will provide stakers with rewards when new blocks are proposed and transactions signed; both which also strengthens a blockchain.

The rewards are produced by proposing new blocks and proving the other Validator’s newly proposed blocks. These are done through algorithmic proof by a collective set of Stakers though a number of Validators which operate servers that run blockchain’s code. When Stakers place their tokens with trusted “Validators”, who run staking operations, they enable blockchains to be extended through the proposal process. And these actions actually producing new tokens through a pre-determined supply of tokens coded into the blockchain code.

There are other ways of earning rewards. For example, in Cosmos, Validators have a way to charge a commission to those that delegate tokens into their nodes. They can earn rewards by taking a small cut of the rewards earned by token holders when new blocks are proposed by the Validator nodes. Not all Proof-of-Stake systems work the same way.

Not really. Even if a Validator gets to propose a new block with higher frequency, the rewards are then distributed to a larger group of Delegators. Hence, it evens out if you delegate to a Validator with a lot of tokens, or one with the least. The math for your rewards generally come out to be the same.

The difference might be that the Validators with a larger pool of delegated tokens will be able to earn larger rewards to then be re-invested back into the Validator service. This allows them to scale up better, by hiring more people, to run a lot more servers, to build up develop a much better set of Engineering practices.

Staking is a way to earn extra rewards or return, similar to that of receiving interest payments, on your holding of tokens/cryptocurrencies. It’s your choice. The longer you hold a cryptocurrency token without staking, the more you lose out. While others are earning rewards over time, you stand to lose out on rewards (like interest payments) that others receive while you don’t. Reward for staking can be attractive as the number of coins increases while the price of the coin may grow at the same time.

You are always in control of your tokens and never do transfer your token ownership to anyone else. Token staking is merely “delegating” the responsibility of blockchain proposals / expansions to a Validator. The ownership of the token remains with the wallet owner’s possession. The risk is that if a token holder stakes with a Validator that doesn’t operate according to the token’s algorithmic service levels (e.g. goes out of service, it’s key is compromised by bad actors, etc.) then there’s a risk of losing a small fraction of your tokens over time via “slashing” rules as imposed by a blockchain governance policies. There’s also another risk of a Validator being compromised or being dysfunctional. This causes your tokens to be slashed in a fraction of a percentage as the Validator is kicked out of being an active participant. But there are still ways to re-delegate out to another active Validator easily.

What is Cosmos?

Cosmos is an Internet of Blockchain initiative which enables a decentralized network of independent parallel blockchains to interoperate and work together. Contrasting with traditional blockchain platforms where blockchains function in silos with limited scalability, Cosmos promises a new approach where heterogeneous parallel blockchains can integrate and communicate with each other to deliver higher transactional throughput while allowing each individual blockchain to maintain its own sovereignty, and overall making it easier for developers to write applications.

The less one stakes, the weaker Cosmos becomes. The Cosmos team has stated a goal of reaching 66% of ATOM tokens staked with Validators. That leaves a smaller supply for speculative traders, value transfer and token utilization for blockchain operations. In order for the network to operate correctly and securely, an incentive is placed to reward both Stakers and Validators. Validators are basically the operators of blockchain Proof-of-Stake servers that keep the blockchain secure. Validators are responsible for running proper and efficient networked computing, which helps running business transaction, extending new blocks in the blockchain, and participating in governance through voting consensus, in return for a commission when the rewards are distributed to their staked tokens and tokens that are delegated to them.

Cosmos Validators are Delegated Proof-of-Stake Validators. These are blockchain node operators who are responsible to run legitimate blockchain code. They are a group of independent operators of servers, some on the Cloud, some in private data centers, and others run both. Validators are connected to one another in a peer-to-peer fashion. They are incentivized to run up-to-date legitimate blockchain code. There are penalties built into Cosmos to avoid bad actors with a “slashing” mechanism. Cosmos has a token delegation model, where Cosmos ATOM holders are encouraged to delegate their tokens to these Validators and earn rewards.

In Cosmos, block proposers that mint new blocks are Validators. Validators take turns to mint new blocks in a round-robin fashion, depending on how many ATOM tokens they are responsible for, or delegated to them. Validators are rewarded as well when they validate new and proper transactions.

The math comes up to one block every 6-7 seconds. The frequency of when a Validator mints a new block depends on how many tokens they have delegated to them. The more tokens that are delegated to a Validator, the more often a Validator proposes new blocks. How the Cosmos Validator community picks which Validator from the Top 100 active Cosmos Validators depends on how many tokens are delegated to them.

Depends on what you’re trying to do. If you’re unbonding for the sake of transferring this to an exchange or using it as a utility or swapping it for a different token using cross-atomic swap experiments, then it takes 21 days to fully un-bond ATOMs from a validator.
If you plan to un-bond your stake for the sake of re-delegating into a different Validator, then choose the “Re-delegate” option. You can re-delegate to a different Validator immediately, as long as those tokens in your wallet weren’t re-delegated from prior Validator within the last 21 days.

Rewards are earned as soon as your tokens are staked. Rewards are paid out on every new block being confirmed, which is approximately every 6s. The distribution of block rewards and transaction fees are managed automatically through the protocol/network.
To withdraw your rewards, one can submit a withdrawal transaction. Rewards can also be re-delegated to earn compound interest for higher annualized return. However, there is a 21-day unbonding process for staked ATOMs to provide protection for the network from malicious attacks, in which ATOMs do not earn rewards and cannot be transferred.

Delegators with KysenPool can refer to mintscan.io website to get details on your token balance by searching on your wallet ID. We are developing our own reporting dashboard. While awaiting for that, there are ways to review the rewards sent to your wallet and how often so. We will be sending you recommendations on when to withdraw the rewards to be re-staked into KysenPool.

The current version of Cosmos at the time of this writing does not have the ability for Validators to automatically re-delegate rewards to KysenPool (or to any other Validator as a matter of fact). It requires a manual intervention to issue a command to a Validator in order to withdraw staking rewards and then to re-delegate the rewards to KysenPool.

What's KysenPool's vision on Proof-of-Stake?

We are here as a Staking-as-a-Service (StaaS) provider because the Proof-of-Stake (PoS) ecosystem will need node operators like us to help the current PoS blockchains to gain operational stability to enable the functional viability. Before blockchains can really be relied for real world applications, we need to enable blockchains be “as reliable as the Internet”, just as how Internet availability is now “as reliable as the dial-tone of a telephone”!.

We are incentivized to run a solid validator service as we are backed by early investors in the crypto space. We have a stake in this to make it successful as well and our goals are aligned with you! In order to realize the value of the Proof-of-Stake consensus algorithm-based projects, they need to be proven to work and be supported by node operators like us. We are here for the long haul.

Besides being early investors in the crypto space, the core members have more than a decade of combined experience in each of these areas: Cloud Infrastructure Scalability, Software Engineering, GPU/ASIC Mining, Real Estate, Legal, Commerce and Payments. We each have a vast network of professional and personal partnerships that enable us to make decisions sensibly and quickly. For example, we were able to build from zero-presence to hosting servers on Tier 3 redundancy Data Center within two weeks. Most of us are well versed in navigating the public cloud providers such as Amazon Web Services (AWS), Google Cloud Platform (GCP), Digital Ocean, Rackspace and Vultr. We will continue this culture of proficiency to build out KysenPool of Validators as a well-architected highly available Staking-as-a-Service provider.

With Cosmos

We host our servers in a Tier 3 Data Center, which means both network and power are on redundant systems. We built in additional redundancy with programmatic failover mechanisms. We not only have a set of Sentry Nodes on the Cloud, as recommended by the Cosmos team, we also have disaster recovery (DR) in mind and creating instrumentation and alerting toolkits.

With Harmony

We have built out nodes in geographically dispersed areas with mirroring. This helps our nodes participate as much as possible in the 2/3 block proposal gains making our nodes one of the highest performers at any 24 hour period. This also helps with disaster recovery if any nodes were degraded in any region, we can quickly recover without losing out much on block rewards.

Our fee is currently offered for a limited time at 1.9% commission rates for Cosmos until 2020. We have struck some deals that enabled us to host our Validator nodes at really low costs. We have a long runway and will not be needing to increase our commission rates for some time. We hope that this attracts potential ATOM token holders to try our Validator services. Once the token holders get a good feeling about our service uptimes, communications and continuous services upgrades, our hope is that these token holders will continue to delegate their tokens to our Validator for the long haul.

We are well funded to be able to sustain our staking operations for several years. The fees are used to fund the infrastructure and the resources to develop a secure and up-to-date Validator nodes. We are a lean team and have found effective operational capabilities to keep our costs really low. We have a goal of holding on to our returns from commissions for infrastructure operations for until Q2 2020, as reserves for future capital expenditures, resourcing and development. By Q2 2021, we hope to be able to keep it our commission rates at a relatively low rate based on the amount of stakers that we’ll attract.

Yes! We will be setting up a private reward model to return our reserves to long term delegators as an additional reward for strengthening Cosmos and believing in us. Also, if we fall short of expectations, we can use these reserves to compensate our delegators for any loss Cosmos block rewards caused by the algorithmic slashing.