Validators & Delegators

In Short

Validators and Delegators play a key role in processing blockchain transactions and securing the network. They are rewarded in SCRT for their contributions to the network and are able to vote in Secret Network Governance. Validators run dedicated hardware to verify transactions and propose blocks to the blockchain, Delegators delegate their SCRT to Validators.

Validators

Secret Network is secured by a group of Validators (current maximum: 50). Validators stake their own SCRT and the SCRT from Delegators in order to earn rewards by successfully running the protocol, verifying transactions, and proposing blocks to the chain. It is possible for anyone who holds SCRT to become a Validator. However, to run a node successfully you will need technical know-how and equipment that meets the specification set by the network. Validators are also required to stay up-to-date with patches to ensure any security issues or vulnerabilities are dealt with immediately.

Validators can stake their own SCRT and the SCRT from Delegators that stake with them. Validators can set a commission for Delegators. This commission will take a percentage of the rewards earned by the Delegators as compensation for the services provided.

If a Validator fails to maintain a consistent and honest node, they, and their Delegators, will have a portion of their SCRT slashed. Furthermore, in case of dishonesty, a Validator may be banned from the network. There are two types of slashing events:

1) Slashing for prolonged downtime.
When a validator is offline for more than 18 hours in a 36-hour window. The SCRT of the Validator and its Delegators is slashed by 0.01%. Furthermore, the Validator is jailed for 10 minutes. Jailing means the Validator and its Delegators won't earn rewards. The Validator has to manually unjail.

2) Slashing for double-signing.
When a Validator signs the same block height twice. The SCRT of the Validator and its Delegators is slashed by 5%. Furthermore, the validator is jailed forever (banned/tombstoned). The Validator and its Delegators won't earn rewards. The Validator and its Delegators will have to redelegate to another Validator in order to continue earning rewards.

For more technical documentation on running a validator click here.

Delegators

Secret Network's delegated proof of stake consensus algorithm allows anyone who holds SCRT to contribute to network security, participate in network governance, and earn SCRT rewards in return. Delegating is done entirely on-chain. Meaning that a delegator doesn't need to run any equipment. Delegators can delegate their SCRT to a validator of their choosing.

A delegator starts earning rewards immediately after staking.
To un-stake, there is a 21-day lock-up period. During the lock-up period, Delegators do not earn rewards.
A Delegator can also redelegate (a portion of) their stake to another Validator. Redelegated SCRT continues to earn rewards but is locked with the new Validator for 21 days.

Rewards

Validators and Delegators are rewarded in SCRT. The SCRT they are rewarded with comes from 2 sources.

1) The gas fees of all the transactions processed by the Validator.
2) Network Inflation.

The rewards are dynamic, they change over time, and are dependent on two factors:

1) Total transactions processed on the network, more transactions equals more gas fees.
2) Bonded rate of SCRT. A higher bonded rate means the network inflation is distributed over more SCRT staked. Furthermore, if the bonded rate reaches the bonded rate target the network inflation will be reduced over time. Read more about these inflation mechanics on the Network Inflation page

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