ORC is used as the basis for all transaction, and as an equity for blockchain consensus. Through ORC, the values contained within Orbit Chain is preserved and operated with.
- A cost for resource usage through transactions
- A cost for transfer of funds through transactions
- A method of Staking (Participation of block producing and validation)
- Exercise of voting power within the governance
- A cost for utilizing the IBC
Orbit Chain converts assets from other chains into the standardized token within Orbit Chain. All Dapps and transactions on Orbit Chain can utilize transaction services with this standardized token.
Within Orbit Chain, there are two major types of fees.
Transaction Fee = Computing Usage Fee + Asset Transfer Fee
- 1.Computing Usage Fee is a fee incurred from the previous Ethereum chain, for the computing resource that is required for occuring transactions.
- 2.Asset Transfer Fee is a value that is proportionally calculated to the amount of funds being transferred, that exists for the preservation of the network.
Asset Transfer Fee = MIN ( Transfer amount * Asset transfer fee rate, Asset fee cap )
ex)Transaction transfer amount : BTC = 1 BTC / ETH = 10ETH, Asset transfer fee rate : 0.0001
Then, Asset Transfer Fee ( BTC ) = 1 * 0.0001 = 0.0001BTC / ( ETH ) = 10 * 0.0001 = 0.001 ETH
Transaction fees are the backbones of Orbit Chain token economy, as they support the chain and provide security to the value imbued to the chain. Orbit Chain, naturally, wishes to raise the value of its chain.
Validator Economic Incentive
A validator participating in blockchain validation will be rewarded with the following.
Total Incentive to Stake = Staking Rewards + Transaction Fees + IBC Fee - Cost to run a Validator
All validators that stake their assets on the chain are subject to a monetary award defined by the inflation rate. And they can also receive the transaction fee from the generated block. In addition to all this, should they be responsible in operating the IBC, they will receive additional rewards as compensation.
Limit of Block Validator Number
Anyone can become a validator, provided they meet the minimum requirements. However, to become a block-producing validator, there may be difficulties if there are many validators, as too many block-producing validators may throttle the network with increased number of computations. But increased number of block validators raise the stability of a network, so therefore an upgrade is in the plans to raise the number of block producers in the future through an upgrade in the network. Initial validators will be 21 people, but this number is designed to be increased through governance consensus in the future.
Validators are rewarded every time a block is generated. This ratio of rewards received is proportional to the amount of funds staked in the entire network. When the staked amount is low, the ratio of reward goes up, whereas if the staked amount is high, the reward is lessened.
Slashing & Penalty
This is a mechanism encouraging the validators to continually participate in producing blocks, through slashing and penalties. If a validator was to go offline, they would be penalized for it.
If a block is finalized and the node becomes offline, the validator would lose an x% of the funds staked. The value x is equal to the current interest rate.
So for example, if the current yearly interest rate is at 5%, the validator could lose up to 0.0137% of the funds staked. This value is determined on daily basis.
If over 33% of the validators become offline and the block producing is stopped, then the offline validators could lose up to 60% of their funds in a 18-day period. This mechanism is a safeguard to protect the nodes that are online, so that the network could return to its normal state in a short amount of time.
If the amount staked is to fall below the minimum required stake, the validator would automatically become excepted from the list of validators.
If double signing occurs, where two different blocks of the same height are verified, the participants lose 60% of their staked funds, thereby maintaining the security of the network.
Last modified 3yr ago