Developers Forum for XinFin XDC Network: Ritesh kakkad

XDC 2.0 Staking, Rewards and Burning Upgrade

Ritesh kakkad — Fri, 06 Dec 2024 11:08:35 +0000

Abstract
This white paper introduces XDC 2.0 Staking, Rewards and Burning Upgrade, an additional advanced decentralized consensus mechanism for the XDC Network. Building upon Satoshi Nakamoto Consensus, XDC 2.0 integrates innovative features like "Protector Nodes," “Observer Nodes” dynamic reward distribution, inflation reduction via token burning, and robust economic incentives to ensure network security, scalability, and decentralization.

1. Introduction
1.1 Background
The XDC Network, a high-performance blockchain tailored for real-world trade finance, P2P Payment and decentralized finance (DeFi) use cases.To enhance its security and scalability, XDC 2.0 introduces a hybrid consensus upgrade inspired by Nakamoto Consensus principles while optimizing for modern enterprise blockchain requirements.
1.2 Vision
The XDC 2.0 upgrade aims to:

Strengthen decentralization through dynamic node roles (Core Validators, Protector Nodes, Observer Nodes).
2x Protector Nodes (e.g: Core Validators * 2 = 216 Protector Nodes) ensure fault tolerance. Enhance network security
Observer Nodes (unlimited)
Address inflation through token-burning mechanisms.

2. Core Principles of XDC 2.0
XDC 2.0 builds on core principles derived from Satoshi Nakamoto Consensus:
2.1 Decentralization
The 108 Core Validator Nodes form the network's backbone, requiring a minimum stake of 10 million XDC each, with no upper limit, enhancing security and making the network increasingly resistant to attacks.
Additional nodes include Protector Nodes (e.g: Core Validators 108 * 2 = 216) and Observer Nodes (unlimited).
2.2 Security through Economic Incentives
High staking thresholds deter malicious actors.
Staking rewards incentivize participation and ensure honest behavior.
Token-burning mechanisms reduce inflation and maintain token value.
2.3 Byzantine Fault Tolerance
The system tolerates up to 1/3 malicious actors while maintaining network integrity, ensuring robust fault tolerance.
2.4 Double-Spend Protection
Immutable records are ensured through cryptographic proofs and consensus rules.
2.5 No Central Authority
Consensus is achieved without relying on a single trusted entity. Instead, it relies on decentralized, peer-to-peer verification.

3. Mathematical Formulas and Reward Mechanisms
3.1 Validator Node Rewards
Each Epoch (900 blocks) generates 6000 XDC to be distributed among the 108 Core Validator Nodes (and 10000 XDC for Protector Nodes.) The reward per Validator Node (Rv) is calculated as:
Rv = 6000/108
3.2 Protector Node Rewards
Protector Nodes act as backups for Core Validators. Rewards for Protector Nodes are distributed proportionally based on the number of Protector Nodes per Validator Node. If Pn is the number of Protector Nodes per Validator:
Rp = Rv/Pn
For example:
If 2 Protector Nodes exist, each receives Rp=Rv/2.

3.3 Inflation Control through Token Burning
To maintain a deflationary token ecosystem, a percentage (B%) of XDC is burned from transaction fees per block. This percentage is decided by the XDCDAO and is applied as:
Tb=Tf × B%
Where:
Tb = Tokens burned per block.
Tf = Total transaction fees collected per block.

If more is burned on base fee than is generated in mining rewards then XDC will be deflationary and if more is generated in mining rewards than is burned then XDC will be inflationary. Since we cannot control user demand for block space, we cannot assert at the moment whether XDC will end up inflationary or deflationary, so this change causes the core developers to lose some control over XDC’s long term quantity.

3.4 Staking Security Formula
The cost to attack the network increases exponentially with the number of staked tokens. The security factor (S) is calculated as:
S = Total Staked XDC × Minimum Required Nodes (108) × C

Where C is the computational cost of attacking a single node.

4. Node Roles and Responsibilities
4.1 Core Validator Nodes
Minimum stake: 10 million XDC (With No upper limit).
Primary responsibility: Block validation and consensus participation.
Rewards: Rv per epoch.
4.2 Protector Nodes
Minimum stake: 10 million XDC (With No upper limit).
Role: Standby for Core Validators, ensuring network resilience.
Reward mechanism: Rp based on the number of Protector Nodes per Validator.
4.3 Observer Nodes
Minimum stake: 10 million XDC (With No upper limit).
Unlimited participation.
Role: Network observation
Reward mechanism: 1/2 * Rp
**No technical limit exists on staking beyond 10 million XDC per node, encouraging healthy participation and enhancing network security. Higher stakes increase resistance to manipulation, aligning with Byzantine Fault Tolerance (BFT) principles, and provide prior opportunities for participants to become Core Validators or Protector Nodes with higher contribution to the core Network.

5. Economic Incentives
5.1 Honest Participation
Honest actors (Validators, Protectors, and Users) are incentivized through rewards and penalties, ensuring alignment with network goals.
5.2 Malicious Behavior Deterrence
Malicious actors face economic penalties, such as loss of stake and Slashing (exclusion) from the network.
5.3 Dynamic Staking Model
The flexible staking model allows Validators to stake additional XDC, increasing the cost of an attack and enhancing network security.

6. Governance and Community Involvement
6.1 Role of XDCDAO
XDCDAO governs key decisions, including:
Adjusting the burn percentage (B%)..
Voting on major protocol upgrades.

7. Technical and Economic Advantages
7.1 Security
Higher staking thresholds make attacks economically unfeasible.
2x Protector Nodes ensure fault tolerance.
7.2 Scalability
Layered node architecture allows for infinite scalability via Observer Nodes.
7.3 Sustainability
Token burning reduces inflation, maintaining long-term token value.

8. Conclusion
The XDC 2.0 Staking, Rewards and Burning Upgrade represents the next step in XDC 2.0 evolution. By blending the principles of Nakamoto Consensus with innovative reward and inflation control mechanisms, XDC 2.0 delivers a secure, scalable, and economically sustainable decentralized network. This upgrade positions the XDC Network as a robust, enterprise-ready blockchain, setting new standards in decentralization and trust.
The END release ensures the network's robustness, security, and scalability while staying true to the core principle of decentralization, empowering the ecosystem to meet the demands of modern blockchain applications.

Please provide feedback and suggestions before we go for actuarial vote at https://www.xdcdao.org/

[Informative] What are Decentralized Physical Infrastructure Networks or DePIN ?

Ritesh kakkad — Sun, 31 Mar 2024 08:51:15 +0000

Decentralized Physical Infrastructure Networks (DePIN) is a network where people connect directly with each other (peer-to-peer) to share and use hardware like computers, Energy grids, Resources and storage through an open and decentralized marketplace, meaning there's no central authority controlling everything.

DePINs use Public blockchain technology like XDC Network to manage physical devices like computers, Storage and Energy sources in a way that's open and decentralized. This means that instead of one central authority controlling everything, the power is spread out across a large network.

The Rising Need for Decentralized Physical Infrastructure Networks (DePINs)
As the demand for artificial intelligence (AI) and other technologies grows, the risks of depending on centralized companies for computing and storage resources become clearer. For example, consider the potential impact on the chip industry if supply from Taiwan were disrupted. Taiwan produces 92% of the world's advanced semiconductors, which are crucial for modern technology. This situation shows how centralized systems can be vulnerable. Decentralized Physical Infrastructure Networks (DePINs) offer a solution by providing a decentralized alternative. They reduce the risk of single points of failure, enhance security and privacy, offer cost-efficient solutions, and promote innovation and competition. Their resilience also ensures that resources are always available, making them essential in reducing the risks of centralized control.

Understanding How Decentralized Physical Infrastructure Networks (DePINs) Operate

DePINs work through three main components: the off-chain network, blockchain technology, and specific protocols.

Off-Chain Network: The off-chain network of a DePIN consists of its users and service providers. Users who need services like GPU computing power, wireless connectivity, or data storage can purchase these resources from a marketplace of service providers.

Blockchain: The blockchain (like XDC Network) acts as a bridge between end users and service providers. It functions as a public ledger, managing payments, escrow contracts, and ensuring all transactions are accurately processed and recorded. Transactions between users and providers are time-stamped and securely logged on the blockchain.

Protocols: The protocols are the set of rules that define how a DePIN operates. These rules cover various aspects, including security measures, the availability of native crypto tokens, criteria for service provider eligibility, and the interaction between users and providers.

By combining these elements, DePINs provide a decentralized and secure infrastructure for physical resources, empowering users with more accessible and reliable services.

DePINs in the XDC Network

The XDC Network is a prime example of how Decentralized Physical Infrastructure Networks (DePINs) work. It uses masternodes, which are servers run by community members. These masternodes provide essential resources like computing power and connectivity, making the XDC Network a decentralized public blockchain. In return for their contribution, masternode holders earn XDC tokens as rewards.

This setup demonstrates the strength of DePINs, where each participant helps to build a secure and robust blockchain network.

XDC Network Ecosystem and Decentralized Physical Infrastructure Networks (DePINs)
The XDC Network hosts platforms like StorX and GoPlugin, which demonstrate the advantages of DePINs:

StorX: This platform enables users to store data on a decentralized network, ensuring privacy with advanced cryptography and powered by the $SRX token. At StorX, node operators provide hardware and storage resources, while end-users can pay with $SRX tokens to store data securely using the StorX data storage framework. For more details, visit https://Storx.tech/

GoPlugin: This platform enables decentralized price oracle and data for smart contracts, catering to various applications such as decentralized finance (DeFi), gaming, and decentralized exchanges (DEXs). It operates using the $PLI token. In GoPlugin, node operators supply hardware and storage resources to process data for smart contracts, and end-users can access the data oracle and pay with $PLI tokens. For more details, visit https://GoPlugin.co/

These examples highlight how decentralized technology can empower community members. We encourage more DePINs to join the XDC Network. We provide support and tools like Coderun.ai for creating decentralized applications (DApps). Entrepreneurs are welcome to submit proposals to DAOFIN for community, bounty or other ecosystem support.

Join us in spreading the word and building a smarter, more decentralized future with DePINs. Let's #BuildOnXDC!

[Informative] Empowering Minds with Artificial Intelligence for a Smarter Future

Ritesh kakkad — Fri, 29 Mar 2024 11:22:53 +0000

Introduction:
Our brains are incredible, with most of us having an IQ between 85 and 115. But what if we could boost our brainpower even further? Enter artificial intelligence (AI) tools like ChatGPT or Coderun.ai. This cutting-edge technology is changing the game for everyone, not just the geniuses among us. In this article, we'll explore how AI is revolutionizing the way we think and learn, and how tools like ChatGPT and Coderun.ai are unlocking new possibilities for our minds.

The AI (Artificial Intelligence) Effect:
ChatGPT, a smart AI tool, scored a whopping 155 on an IQ test, beating 99.9% of people.[Ref.1] This shows how AI tools can make even average minds shine bright.

Boosting Competition with AI:
Imagine if 68% of people with average IQs (85-115) start using AI tools like ChatGPT and coderun.ai. These tools can help them access information, solve problems, and come up with creative ideas more efficiently. This means that everyday people could gain a significant advantage, especially in connecting with others and sharing knowledge. Meanwhile, those with higher IQs might not see as drastic a change, as they're already working at a high level. So, AI has the potential to level the playing field and make competition more exciting for everyone!

The Internet Revolution: A Mixed Blessing
As per WorldBank Report, Over the past 25 years, the internet has boosted the economy but hasn't equally benefited everyone, which was its original goal. Data indicates that the widespread benefits of internet technology and free access to information and communication have not been fully realized by a significant portion of the population. Only about 1% of people have truly capitalized on the internet revolution, while the majority of average users struggle with screen addiction and social isolation. Furthermore, 22% of internet users, or approximately 1.1 billion people, are engaged in online gaming. In addition, 62.3% of the global population, amounting to 5.04 billion individuals, actively use social media, and a staggering 90% of internet videos are primarily focused on entertainment, according to a Statista report.

Transition: As we leave the internet era behind, we're stepping into a new phase with Artificial Intelligence (AI). This technology has the potential to help lots of people in many different ways.

AI: Balancing Productivity and Risks for a Smarter Future
Artificial Intelligence promises to boost productivity and could level the playing field by enhancing average IQs. However, it also poses risks such as fake news, loss of control, and increased social isolation if not properly managed. It's crucial to steer the development of AI in a direction that maximizes its benefits to the entire population while minimizing its drawbacks. We all must ensure that we use and take the initiative to create wise tools and educate people to use technology to boost productivity, efficiency, and creativity.

XDC Network's Initiative:
At XDC Network, we're all about using AI for good. We're working on tools and projects that help everyone easily enjoy the perks of AI in their daily lives, aiming to share these benefits with as many people as possible. One of our initiatives is DAOFIN, which uses AI and blockchain technology to create democratic decision-making processes, providing on-chain proof of each proposal, smart decision, and fund distribution similarly, Mr. Atul Khekade, co-founder of the XDC Network, emphasizes the importance of using AI tools wisely so he created AI tools for developers/programmers called coderun.ai and to provide technical support through a specially trained bot for the XDC Network. If you're a developer, interested in coding, or need technical support, check out our AI-Driven XDC Resources and share the link with others who might benefit from it.

Conclusion:
Artificial Intelligence is here to make us all smarter and more successful. Let's use it to our advantage and make the future bright for everyone. We hope to educate people to use AI wisely, increase productivity, and create a better world. #WeAreXDC

Reference:

I Gave ChatGPT an IQ Test. Here's What I Discovered
Check out AI-Driven Resources for Developers called https://coderun.ai/
XDC Network Resource and XDC Foundation

[Informative] XDC Network's Unbreakable Future: Exploring area of Quantum-Proof Blockchain Research

Ritesh kakkad — Tue, 19 Mar 2024 15:58:51 +0000

A study by Deloitte reveals a critical vulnerability in the cryptocurrency ecosystem, with a significant amount of bitcoins and ether — essential assets within the Ethereum network — held in addresses that publicly display their public keys. This exposure creates a potential security loophole, making these cryptocurrencies susceptible to theft by sufficiently powerful quantum computers. Consequently, hundreds of billions of dollars’ worth of cryptocurrencies could be vulnerable to storage attacks(Source)

As per World Economic Forum,

Quantum computing's rise threatens to shatter blockchain security, risking hundreds of billions in cryptocurrencies to sophisticated cyberattacks. Immediate action is critical to fortify digital defenses against the looming quantum menace.

In today's swiftly evolving digital landscape, where quantum computing looms as a formidable challenge to blockchain security (including bitcoin, Ethereum and other blockchain network), the XDC Network is taking significant strides to fortify itself against these futuristic threats. This blog delves into our proactive approach to ensuring the XDC Network remains a secure and robust platform, even in the quantum era.

This is a high-level overview of the areas where the XDC Network is actively engaging in research, Partnership and collaboration to enhance security and future-proof against quantum computing threats.

Embracing Quantum-Resistant Cryptography
At the heart of our efforts is the development of cryptographic algorithms designed to withstand the immense power of quantum computing. We're exploring cutting-edge post-quantum cryptographic techniques that promise enhanced security for encryption, digital signatures, and hashing processes.

Strengthening Network Security Protocols
The security of the XDC Network is paramount. To this end, we're bolstering our security protocols with quantum-safe key exchange mechanisms and securing communication channels across the network to thwart any potential quantum threats.

Revolutionizing Consensus Mechanisms
The consensus mechanism, the core of our blockchain network, is under scrutiny to understand the potential impacts of quantum computing. Our focus is on developing quantum-resistant solutions to preserve the network's integrity and trustworthiness.

Leveraging Quantum Key Distribution (QKD)
We're exploring partnership to integrating Quantum Key Distribution (QKD) technology, which offers a secure method for cryptographic key distribution, crucial for protecting transactions within the XDC Network.

Continuous Threat Assessment and Risk Management
Identifying and mitigating potential quantum threats is an ongoing endeavor. Our dedicated team is committed to continuously assessing these threats and formulating strategies to ensure the XDC Network's security.

Fostering Collaboration and Standardization
The path to quantum resistance is a collaborative journey. We're engaging with academic circles, industry partners, and standardization bodies to foster the development and adoption of quantum-resistant technologies and standards.

Commitment to Regular Security Audits and Updates
Staying one step ahead of quantum threats involves regular security audits and updates to our cryptographic algorithms and protocols, ensuring the XDC Network remains at the cutting edge of blockchain security.

Join Us on Our Journey to Quantum Resistance
The XDC Network is dedicated to becoming quantum attack-proof. Through our research and development efforts, we aim to not only secure our blockchain against quantum threats but also to lead the way in building a resilient and future-proof blockchain ecosystem.

Stay updated on our progress towards quantum resistance by joining the conversation on our technical forum at xdc.dev. Together, we can shape a secure future for blockchain technology.

Disclaimer: The journey to quantum resistance is an ongoing process, and the XDC Network's DEV Community is deeply invested in enhancing its security against potential quantum computing threats. This blog reflects our commitment and continuous efforts in this direction.

Thank you for joining us on this exciting journey. Let's innovate and secure the blockchain technology of tomorrow, today.

[Informative] Empowering XDC Network with AI: DaoFin's Smart Contract Standard for DAOs Now Live

Ritesh kakkad — Sun, 18 Feb 2024 09:30:18 +0000

DaoFin #XDC #DAO #SmartContracts #Blockchain #AI

Introduction

In our ongoing journey to decentralize ecosystem development on the XDC Network, we are thrilled to announce significant progress in the DaoFin initiative. As we embrace the next phase of innovation, we're excited to share how artificial intelligence (AI) and community engagement are shaping the future of decentralized governance on the XDC Network's DAO platform.

What is DaoFin ?
DaoFin is an open-source smart contract standard for DAOs on the XDC Network. It aims to decentralize decision-making and enhance transparency by empowering the XDC community to participate in proposals for bounties, grants, and integrations. This approach fosters a more democratic and transparent ecosystem within the network. For more detailed information about DaoFin and its objectives, you can visit the following link: https://www.xdc.dev/riteshkakkad/daofin-draft-decentralizing-xdcs-ecosystem-development-1da.

DaoFin Smart Contract Standard Goes Live

We are proud to announce that the DaoFin smart contract standard is now live on Apothem/Testnet at https://daofin.xdc.network/. This milestone marks a significant step forward in our mission to provide a robust and transparent framework for decentralized autonomous organizations (DAOs) within the XDC Network's ecosystem. Note: Mainnet Launch Post security Audit to Ensure Smart Contract Integrity.

Leveraging AI for Enhanced Proposal Quality

Understanding the pivotal role of AI in technology evolution, we have integrated AI tools into the DaoFin framework to enhance the quality of proposals. This innovative approach assists in creating more effective proposals, increasing their likelihood of approval and driving meaningful progress, Increasing On-chain activities within the XDC Network.

Post-Vote Analysis and Jury Member Insights

Following the XDC community vote and Masternode/Validator vote, DaoFin has begun capturing behavior from Jury Members (Industry expert or Subject matter Experts). This initiative aims to leverage past decision-making feedback and current technology trends to provide more accurate and beneficial insights. By doing so, we aim to foster the growth of the XDC Ecosystem and create a more impactful Network Effect and Increasing On-chain activities within the XDC Network.

Join the DAO-Based Technology Revolution

We invite you to be a part of the next wave of technology revolution by engaging with the DaoFin (AI) application in the following ways:

Create Proposals: Play an active role in the expansion of the XDC Network by submitting proposals that aim to boost network effectiveness and stimulate more on-chain activities. To get started, visit the Create Proposals page on the DaoFin platform. For a detailed guide on how to create a proposal, please refer to the Step by Step Guide on Create Proposal Details.Your contributions are essential in driving innovation and progress within the XDC ecosystem.
Community Voting/People’s House: As an XDC token holder, you have the unique opportunity to represent the community's voice and contribute to a more democratic decision-making process. We encourage all XDC community members to actively participate in voting on each proposal. Your feedback and viewpoints are invaluable in shaping the future of the XDC ecosystem. For more information and to cast your vote, please visit the People's House: https://daofin.xdc.network/#/community/peoples-house.
Masternode Voting: Set up a Masternode/Validator node to contribute computing power to the XDC Network and participate in governance. If you're interested in becoming a masternode holder/Network Validator, please visit our page on 'How to Set Up a Masternode on the XDC Network' for detailed instructions: https://www.xinfin.org/setup-masternode."
Jury Member Voting: As an Industry Expert, your role is to offer insights and opinions on specific proposals, ensuring that they align with the strategic goals of creating a Network effect, fostering integration, and enhancing ecosystem involvement. Your expertise is crucial in guiding the decision-making process, contributing to the growth of on-chain activities within the XDC Network, and ensuring that proposed initiatives are poised to deliver tangible benefits and advancements to the ecosystem.

Join us in creating a global open-source standard for DAOs and shaping the future of decentralized governance on the XDC Network.

Conclusion

The DaoFin application represents a significant leap forward in our quest to decentralize ecosystem development on the XDC Network. By harnessing the power of AI and community engagement, we are setting the stage for a more democratic, transparent, and effective governance model. We look forward to your participation and contributions as we continue to build a vibrant and innovative ecosystem together.

Special Thank You Note: A heartfelt thank you to the XDC Foundation, XinFin team, XDC Germany, XDC Japan, XDC Australia,Blocksscan team, Arthuro and all jury members for your collective efforts in making the DaoFin standard a reality for the DAO community. Your dedication and collaboration have been instrumental in this achievement. Looking forward to more successes together. #WeAreXDC

DaoFin Draft: Decentralizing XDC’s Ecosystem Development

Ritesh kakkad — Thu, 16 Feb 2023 17:34:10 +0000

Introduction

Blockchain is synonymous with decentralization. But while the XDC Network is and always has been a decentralized network, with hundreds of validators from all four corners of the globe participating in consensus, ecosystem development was for a while spearheaded by various groups of key stakeholders and community leaders.

This was necessary, for a time. Tokens—that is, voting power—had to be distributed ever more widely before genuinely democratic governance could become a real possibility. Only if XDC changed hands again and again would whales become few and small enough to mitigate the risk of a plutocracy masquerading as a democracy. Moreover, before accepting responsibility for ecosystem development, the community had to grow, not only in size, but also in maturity, loyalty, and knowledge. Finally, it was necessary to think through, with great care, what form a DAO on XDC should take. But now, at long last, all of the above conditions have been met: the pool of potential voters is big and diverse enough; the community is ready; and we, for our part, have devised a highly sophisticated, original, hybrid DAO, tailored to the XDC community, which should be free from the defects that continue to plague other DAOs. Since, for all of these reasons, the time has come to take the next, big step toward the decentralization of ecosystem development on XDC, we would like to submit the following plan to the community for review.

Beginning today, February 15th, there will be a 30 day community and public comment period, during which we hope that you—the community—will share your positive and negative feedback with us on XDC.dev. After the public comment period ends, on March 15th, we will take another 30 days to revise the plan in light of the feedback we’ve received, before sharing a final draft with the community on May 1st for 15 days and implementing the plan and launching the proprietary or available on-chain voting dApp shortly thereafter. The community is welcome, at this stage, to provide feedback on features they’d like to see in the dApp as well.

Please note, finally, that there are a number of important details that we can’t be sure of prior to testing and dry runs of the voting system, which will be necessary to gauge the quantity and quality of participation we can expect to see when the voting dApp is live. All such things, which remain TBD, have been affixed with an asterix (*).

DaoFin

10B XDC was originally allocated to the XDC ecosystem development fund. Every year, 250M of that 10B XDC unlocks to support the network.

Going forward, the unlocked funds will be distributed with the advice and guidance of the community in an increasingly decentralized, democratic way.

During 2023, 90M XDC will be set aside for core protocol development and support. The remaining 160M XDC, however, will be released quarterly, in tranches of 40M, to fund projects deemed worthy of support by the community.

From 2024 on, the community will bear responsibility for distributing the full 250M XDC—again, quarterly, in tranches of 62.5M.

Checks and Balances
Governing bodies, like the Ethereum Foundation, in which small panels of experts and community leaders assess proposals have the distinct advantage of being able to make highly informed decisions on the basis of in-depth knowledge of the relevant fields and careful consideration of their strategic priorities. However, they lack transparency and, since only a small number of people can participate in them, they fall short of the democratic ideals necessary for decentralization.

At the same time, simple majoritarian governance structures in which “1 token = 1 vote” have failed time and time again to empower communities to act in their best interest: their treasuries have been drained and/or their communities left disenfranchised. Such majoritarian governance structures are subject to manipulation on the part of exchanges, large capital funds, including VCs, and bad actors who acquire tokens to increase their voting power only to dump them immediately after achieving their goals. These allegedly pure democracies are usually, in fact, plutocracies.

Attempts have been made to mitigate the risk of manipulation, on the one hand, and to combine expertise with democratic governance, on the other, by allowing voters to delegate their voting power to a small panel of loyal experts. But while better than the alternatives, nothing prevents whales from colluding to vote their own delegates into power. Furthermore, such “representative” governance structures have the tendency to devolve into a small panel of experts, acting without sufficient transparency or accountability, owing to the voter apathy they presuppose and even cultivate in the community more broadly.

Given the deep structural problems plaguing most, if not all, DAOs currently in existence, a new kind of DAO is needed.

Additionally, when creating a DAO to develop the XDC ecosystem further, we are not starting from square one. The XDC community already exists, as a whole with various parts: sub-communities, constituencies, and interest groups. A DAO on XDC must therefore take into account the already existing constituencies–like the 250 or so masternode holders, on the one hand, and the numberless XDC holders, on the other–without under- or over-representing any of them.

Thus, like modern constitutional governments, DaoFin (as we are provisionally calling it) relies on a system of divided government or checks and balances to limit the risk of manipulation, all the while rewarding large stakeholders with their fair share of governance and incorporating a deliberative body, ultimately responsible to the community, to ensure that the process remains sufficiently thoughtful, diligent, and rules-based throughout.

Accordingly, in DaoFin, there will be three governing bodies or branches of government:

The Masternode Senate, where each masternode address will have 1 vote.

The People’s House, where addresses staking XDC in the governance pool will have voting power proportional to their token holdings (“1 token = 1 vote”).

Voters will be able to stake 100,000, 250,000, 500,000, or 1,000,000 XDC in the governance pool.

XDC staked in the governance pool will eventually earn rewards proportional to the stake paid out from the ecosystem development fund. Specifics about the rewards will be determined after testing of the voting dApp has established the levels of participation that we can expect to see.

To incentivize participation and increase voter turnout, participating regularly in elections and keeping the XDC locked in the governance pool will further increase the share of rewards stakers can receive, leading in effect to “a raise” for good behavior. Failure to participate in an election or removing XDC from the pool, on the other hand, will result in losing the raises earned over time, setting the reward-multiplier back to square one.

The Judiciary Committee, where 5* highly dedicated community leaders will have 1 vote each.

For the time being, the Committee will be a diverse group made up of tried-and-true community members, without any conflicts of interest, specially appointed by the Founders. In the future, as the decentralization process unfolds, the Committee will be voted in by the Senate and the House in annual elections, using quadratic voting to determine the winners.

In addition to the 5 core members, there will be 2* alternates on standby prepared to step up in the event that one or more members of the Committee is unable or unwilling to participate.

All members should KYC and be doxed to the Masternode Senate and the Founders, where they will also make financial disclosures to the Founders bearing on any conflicts of interest that might prevent them from serving impartially on the Committee. Committee members should recuse themselves from decisions if and when there are any conflicts of interest, however small.

In the event that a masternode holder becomes a member of the Judiciary Committee he/she will not be able to vote in the Masternode Senate during his/her term. Members of the Judiciary Committee should not vote in the House either. Nor should they discuss proposals with community members not on the Committee except in the public discussion forum (XDC.dev) where all can see and participate equally. Finally, Judiciary Committee members shall not invest in any projects seeking or receiving grant funding from the ecosystem development fund.

Breaking any of these rules will result in expulsion from the Committee.

Election Week
The last week of each fiscal quarter will be “election week,” during which the community will vote on submitted grant proposals. The vote will be held on-chain, using a proprietary or available public voting dApp, which will include space for the Senate, the House, and the Judiciary, while discussion and debate should take place chiefly on XDC.dev.

Quarterly elections were decided upon (a) to foster healthy competition between bounty/grant seekers, (b) to reduce first mover advantage and ensure that the process is deliberative and fair, rather than “first come, first served,” and (c) to allow the community to assess proposals, not only in light of one another, but also in light of the budget and its constraints. Throughout this process, community members should encourage high quality projects to submit proposals. Competition is healthy!

Any funds left over once the quarter ends rollover into the next quarter. So the community need not feel obliged to award funds to proposals lacking in quality—on the contrary, they can in that case keep the funds in reserve for other, better proposals! A rejected proposal is money saved to accept a future proposal. Moreover, every accepted grant proposal increases the amount of XDC in circulation. It’s in the community’s interest to fund high quality proposals or none at all, since projects that don’t add sufficient value to the network dilute the supply in addition to adding little or no value.

Grant/Bounty/Reward Proposals

The XDC community grants DAO—DaoFin—will solicit grant proposals from entrepreneurs, developers, innovators, and community members across at least the following seven subject areas:

Protocol development
Applications and layer 2s
Developer tooling
Code audits
Committees, sub-committees, and DAOs that serve the XDC ecosystem
Community service (marketing and education)
Events and hackathons

There will be, in total, three grant tiers:

Tier 1 grants are small grants, under 250,000 XDC. To submit a small grant proposal,
500 XDC must be burned.

Tier 2 grants are medium grants, between 250,000 and 1,000,000 XDC. To submit a
medium grant proposal, 500 XDC must be burned.

Tier 3 grants are large grants, over 1,000,000 XDC. To submit a large grant proposal,
1000 XDC must be burned.

Small Grants
Small grants should be submitted at least one week prior to the start of election week to allow for community discussion. (Grants not submitted in time will be considered the next quarterly cycle.)

Small grant proposals that receive support from a majority of the House, the Senate, and the Judiciary will be accepted and funded.

Small grant proposals that fail to receive majority support from one branch, whether it be the Senate, the House, or the Judiciary, will still be accepted if they received supermajority (66%*) support from either or both of the remaining branches.

For a “yes” vote to be considered valid, the minimum participation threshold for small grants in each branch is as follows:

Senate … 25%*
House … 45%*
Judiciary … 100%*

Otherwise, the vote will count as a “no,” owing to lack of participation. Proposals that fail owing to lack of voter participation may be resubmitted the next quarter—proposals that fail with adequate voter participation may not be resubmitted.

Medium Grants
Medium grants should be submitted at least two weeks prior to the start of election week to allow for community discussion. (Grants not submitted in time will be considered the next quarterly cycle.)

Medium grant proposals that receive support from a majority of the Judiciary, a majority of either the Senate or the House, and a supermajority (66%*) of the remaining branch, whether it be the Senate or the House, will be accepted and funded.

Medium grant proposals that fail to receive majority support from the Judiciary and either the Senate or House, or a supermajority from either the Senate or House, will be rejected.

For a “yes” vote to be considered valid, the minimum participation threshold for medium grants in each branch is as follows:

Senate … 30%*
House … 50%*
Judiciary … 100%*

Large Grants
Large grants should be submitted at least three weeks prior to the start of election week to allow for community discussion. Prior to submission, it is highly advisable to visit with the Judiciary Committee in “office hours” to receive initial feedback, ask questions, and ensure compliance with the guidelines. (Grants not submitted in time will be considered the next quarterly cycle.)

Large grant proposals that receive support from 80%* of the Judiciary, and a supermajority (66%*) of both the Senate and the House will be accepted and funded.

For a “yes” vote to be considered valid, the minimum participation threshold for large grants in each branch is as follows:

Senate … 35%*
House … 55%*
Judiciary … 100%*

In the case of large grants, one week prior to the start of election week the Judiciary Committee will publish its feedback on large grant proposals. The Committee’s assessment is merely advisory to the larger community, which is free to accept or reject its analysis. In the event that the Committee’s opinion is not unanimous, the Committee will issue two opinions, one for, one against, to guide community discussion.

Large grant proposals should, as a rule, be broken up so that funds will be disbursed only as milestones, clearly identified in the proposal, are reached over time. Such projects will be funded incrementally, as they achieve key benchmarks and report on their progress to the Judiciary Committee at the designated time.

Projects should be careful to set realistic goals for themselves. The Judiciary may, in extreme cases, with a majority vote, deem projects that have not reached their milestones unworthy of additional funding. Moreover, a plurality (33%*) of the Masternode Senate can request a milestone report from the Judiciary after the fact and, if they are not satisfied with the progress being made by the project, they can trigger a vote during the subsequent election week to determine whether funding should be continued by notifying the Judiciary Committee. Funding will be suspended with a supermajority vote of the Senate.

Projects seeking large grants should not be starting from scratch. Ecosystem development funds should not be used to bootstrap significant projects with nothing to show for themselves; they are to be used to fund projects that have already begun their work and demonstrated that they have skin in the game, whether by having an MVP, or by deploying on chain, or by having assembled a working team with clear signs of progress made, or by some other means.

For the sake of full transparency, the Judiciary Committee will publish an annual report, aggregating all successful grant proposals, complete with all available on-chain data tracking fund movements end-to-end and vote tallies for all three branches of the DAO government.

Conclusion

Think of this as a first step toward decentralizing ecosystem development on XDC. There’ll be more to come, as the process unfolds gradually over the coming months and, together with the community, we learn what works and what doesn’t. The proposed plan seeks to empower the various stakeholders already active in the community, without giving too much power to any one single interest group. The system of transparent, divided government that we’ve proposed is intended to make it hard, if not impossible, for powerful interest groups or factions to collude while still leaving room for community members to cooperate with one another. The community should take the next 30 days to discuss the plan and to share their feedback, both positive and negative, on XDC.dev (as comments). Nothing is set in stone, and we fully expect to iterate over the coming weeks and months, in light of the discussions we have with one another, until we’ve reached a satisfactory result.

Remember, as you go about offering your constructive criticism, that we consider ourselves to be a DAO on a hill … the eyes of the world are upon us. The ultimate goal is to build a DAO worthy of the name, a DAO as decentralized as the XDC Network already is, and this is impossible without your input.

WeAreXDC

PS: Special thanks to Atul, XDC Foundation, XDC Community, XinFin, Dustin and Billy for helping to create the 1st draft for DAO.

Blockchain #Governance #DeFi #Web3 #Governance #DAOsociety #DAOrevolution #XDCNetwork

XDC Network utilities and usecase

Ritesh kakkad — Mon, 18 Jul 2022 07:53:48 +0000

Lets Discuss About XinFin's usecase and Utilities based projects.

I am creating Thread around XDC Eco-system projects, Please add your comments if i am missing something:

1) XDC Network is growing with the increase in utilities & projects being built on #XDCNetwork.

Let’s look at the projects one by one in no particular order.

Note: This thread is only for community awareness & not endorsement, please #DYOR on the projects.

XDCUtility #BuiltonXDC

2) StorXNetwork is a decentralized cloud storage network that empowers users to store their data securely on the decentralized Storage Network. StorX also enables users with spare storage capacity to lease space and earn. Find more details about StorX at www.storx.tech

StorX #SRX

3) Travalacom is the most epic cryptocurrency-friendly travel booking service with 2.2 million properties, over 400k activities in 230 countries, and 600 airlines globally.

Travala supports $XDC for your hotel/flight booking.

Visit: https://www.travala.com/payment/xdc-network

TravelWithXDC

4) Xceltrip is a cryptocurrency-friendly travel booking service with 1.5+ million hotels and 400+ airline companies globally.
XcelTrip supports $XDC for your hotel/flight booking.
Visit: https://www.xceltrip.com/

XcelTrip #TravelWithXDC

5) ComTechOfficial is redefining the tokenization infrastructure by digitization of Gold using Blockchain that allows both institutional & retail communities to get access to Gold electronically anywhere across the Globe
1 Gram of Gold = 1 $CGO token
Visit: https://comtechgold.com/

6) GoPlugin , a decentralized oracle platform, provides cost-effective solutions for any smart contract on the #XDCNetwork ecosystem. Also Provide powerful data oracle for #decentralized #weather data
Visit: https://goplugin.co/

PLI #Plugin

7) Lawblockstoken is a user-friendly, decentralized Legal document storage Platform built on XDCNetwork.

Visit: https://lawblocks.io/

LBT

8) LedgerMail is the world's first Decentralized Email Service that combines the power of blockchain, XDPoS consensus, cryptographic algorithms, & zero trust mechanism with a mission of Protecting the Digital Rights of Email users.
Visit: https://ledgermail.io/

LedgerMail

9) Metabloqs is a virtual world powered by XDC Network that fits in with users' diverse needs whether you want to pick a skillset, engage in networking, or enjoy some time playing. #Metabloqs is the first #Metaverse built on #XDCNetwork
Visit: https://metabloqs.com/

10) XSwapProtocol is a decentralized exchange for XRC20 tokens and is built on the XDC Network. It allows all customers to Swap & Earn inside pools.
Visit: https://xspswap.finance/

XSP #XSwap

11) Globiance is a group of regulated/licensed exchanges and financial institutions. It offers centralized and decentralized exchange for #XRC20
Visit: https://globiance.com/

GBEX #Globiance

12) XDSeaNFT is the world's first and largest peer-to-peer decentralized marketplace for buying and selling #NFTs built on the XDC Network (XRC) blockchain.
Visit: https://xdsea.com/

XDSEA #NFTMarketplace

13) xdcnft marketplace is one of the quickest, smartest, and most anticipated marketplaces on the XRC20 blockchain.
Visit: https://www.xdcnft.com/

BLKZ #XDCNFT #NFTCommmunity

14) Impel_official is ISO 20022 compliant messaging: Redefining the standard for cross-border payments and financial messaging system on XDC Network.
Visit: https://www.impel.global/

ISO20022 #Impel

15) PrimeNumbersFi is a DAO that generates scholarships for students and their community through #NFTs and #DEFI.
Visit: https://www.primenumbers.es/

PRNT

16)
@Blockdegree_org provides online blockchain training to engineers and professionals with verified certifications that are stored on XDC network.
Visit: www.blockdegree.org

Blockdegree #education

17) TradeFinex is a network for Trade Finance Originators to Distribute Trade Assets to the Growing Class of Alternative Asset Investors.
Visit: https://tradefinex.org/

TradeFinance

18) Cycle_bit is a tool for retailers to accept digital payments in-store, online, or on the go. From now on, any product can be paid for using $XDC tokens, with the whole transaction taking just a few seconds.
Visit: https://www.cyclebit.io/

Cyclebit

19) DATACHAINDC is an Infrastructure for a data-driven world where AI will process trillions of data in real-time to provide accurate recommendations: building the Internet of Value.
Visit: https://www.datachain.one/

DC #Datachain

20) crypterium provides XDC and other Crypto top-up facilities to pre-paid cards. It also helps business monetize their audience by providing crypto, banking, and VISA card issuance services with its SDK program.
Visit: https://crypterium.com/

Crypterium

21) EcoinOfficial aims to the mass adoption of cryptocurrency with the help of ‘world’s first AI driven proxy identity platform’ along with ‘world’s easiest crypto onboarding’ powered by Social Mining, Cashbacks Mining and Incentivized Mining
Visit: https://ecoinofficial.org/

ECOIN

22) usnotacoin is an stable coin built on XDC Network, aims to make global payments, effortless, secured, super fast without the costs of the traditional forms of payment like cards and banks.
Visit: https://www.usnota.com/

USNOTA

23) BlocksScan is an explorer partner for #XDCNetwork. It is a Block Explorer and Analytics Platform for $XDC and other #Crypto decentralized smart contracts platforms.
Visit: https://blocksscan.io/

BlocksScan

24) Yodaplus Multi-Sig Safe is the most trusted platform for managing digital assets on XinFin Block Chain. Yplusvault is the first #multisig #wallet built on #XDCNetwork

Visit: https://yplusvault.com/#/welcome

25) The mention of all the above projects is just for community awareness & not for endorsement. Comment below the projects that are built on #XDCNetwork but not covered in the above list. Let's create an informative thread for the #XDCcommunity.

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Please Post your feedback/Suggestion as comments.

XDC Network Protocol Upgrade Proposal: Fully Proof-of-Stake (PoS) Network

Ritesh kakkad — Wed, 06 Jul 2022 14:26:27 +0000

Brief Background

Early in 2017, XDC Network Founders decided to create a scalable and open-source blockchain infrastructure (a smart contract-based platform) that solved major problems facing networks that relied upon the Proof of Work (PoW) consensus protocol.

Following extensive research and consultations with technology experts, the XDC Network went live on the 1st of June 2019. Immediately after launch, the XDC network helped cut transaction times from a few minutes to two seconds; reduce Gas fees from between $5-$30 to near-zero fees(less than one-millionth of an XDC for most transactions). And, minimize energy consumption by 99%--i.e. XDC mining consumes a mere 0.0000074TWh as compared to 71.12 (TWh) and 20.61 (TWh) needed to mine Bitcoin and Ethereum, respectively.

As well, the XDC network added a KYC layer for its validators, which enabled the identification of masternodes/validators. With this unique feature, the XDC network successfully handled queries from different regulators that had issues with identity and KYC-related compliance requirements.

As of 1st June 2022, the XDC Network completed three years on the Mainnet using XDPoS (XinFin’s Delegated Proof of Stake) consensus protocol.

Since then, there has been an explosion in the usage of the XDC Blockchain Network. A few major growth factors contributing to the surge were: XinFin’s approach to growing the network’s performance and technical specs after collecting opinions from community members; use cases that are based on real-world enterprise, and the network’s proactive approach to solving problems facing the evolving blockchain technology space. And with the XDC network’s smart contract capability and open-source nature, the Network is inherently programmable, and it has become by far the most popular platform for developers to build Decentralized Applications (dApps)

For more insights, here are some recent statistics on the network.

Validator Node or Masternode increased from 3 to 207 (that’s including Backup/Standby nodes). Each validator has to stake 10 Million XDC (i.e. the MIN_STAKE) to become a validator/masternode. On the XDC network,masternode/validators are capped at 5000 Validator Nodes (i.e. the MAX_REGISTERED_VALIDATORS = 5000).

The total value of XDC Coin staked on the network is roughly 2,070,801,888

The total number of blocks created on the XDC network is 47094840.

More than 9500 XRC20 tokens have been deployed.

Following extensive research and deliberations, the XDC team has found out that the XDC Chain is the most suitable chain for implementing various trade finance and retail use cases. Top on the list of retail use cases that can thrive on the XDC chain are projects on: data oracle, storage, NFT marketplaces, ISO 20022 compliant messaging standards, and decentralized exchange (DEX). Many of the real-world DeFi and TradeFinance initiatives have begun to provide real benefits to the XDC community.

As a part of continuous research and development, the XDC team is proposing the next upgrade and seeks opinions from the Public/Community to improve. Proposal to migrate from Delegated Proof of Stake (DPoS) to a Fully Proof of Stake (PoS) protocol

How does the PoS protocol work?

Under the PoS protocol, a consensus is attained by requiring users to stake a specific amount of their tokens before they can be selected to validate transaction blocks and get rewards for successfully doing so.

To elaborate…

With the PoS protocol, XDC coin owners will validate block transactions based on the amount of XDC the validator/ Masternode stakes. Note: block creators under PoS are called validators. And their role is to check transactions, verify activities, vote on outcomes, and maintain transaction records.

To "buy into" the position of becoming a block creator, validators need only to purchase the sufficient limit of XDC coins or tokens required to become a validator for a PoS blockchain. To the contrary, miners under Proof-of-Work (PoW) protocol have to invest in expensive equipment and incur heavy energy charges to power the mining rigs used to solve complex mathematical equations before they can validate transactions and get rewarded for their work.

What Blockchains are Currently using PoS?

Examples of blockchain networks that currently employ the PoS consensus protocol include XDC Network, Polkadot, Avalanche, and Cardano.

Under the PoS consensus mechanism. The next block validator/block writer on the network is randomly selected, with higher odds being assigned to nodes that have larger stake positions or holders that have staked a higher number of tokens and have held the tokens for a longer period.

Key benefits of Proof-of-Stake include:
Reducing the amount of computational work needed to verify blocks and transactions that keep the blockchain system and tokens secure. Slashing transaction costs are incurred when transactions take place. Simplifies the way blocks are verified via the machines of coin owners, thus boosting efficiency. To elaborate, coin owners offer their tokens as a guarantee of the legitimacy of any new transaction they add to the blockchain. These coin owners are called validators.

Currently, what’s XDC’s consensus mechanism?

To become a validator on the XDC network, validators currently need a 10 million XDC stake(i.e. that’s the MIN_STAKE on the network)

Note, other important Masternode parameters on the XDC network:

XDC network’s VALIDATOR_SET_SIZE is currently 108
The EPOCH size is 900
VALIDATOR_REWARD equals: NOS_masternode / TOTAL_REWARD
NOS_masternode = 108 AND TOTAL_REWARD = 86400000 XDC + very small Transaction fees
REWARDS_TRANSFER: Every next block of epoch
WITHDRAWAL_PERIOD: Set of Epoch (1 Epoch == 900 Blocks) for XDC Network.

The system uses verifiable random functions (VRFs) to randomly select 108 candidates. Blocks are validated by more than one validator, and when ⅔ (two-thirds) of the validators verify that the block is accurate (VALIDATOR_SET_SIZE × 2/3), it is finalized and closed. More elaborately, a validator will verify the transactions and add them to a shard block, which requires at least ⅔ (two-thirds) of the 108 validators to attest to. And, once shards are validated and a block created, two-thirds of the validators must agree that the transaction is valid, then the block is closed.

Note: In the event of no proposal and/or a timeout in a round (r − 1), nodes will send a "timeout" message for this round, and the leader of the round (r-1) will gather tH of them into a timeout certificate (TC), so that this round can be dropped from the blockchain.

As well, for each iteration of 900 blocks (called an epoch), a checkpoint block is created. The block---also known as the block signer--- implements the reward under the protocol,which implements reward works. Block signers count the number of signatures sent to the block signer smart contract during the epoch. Rewards are based on the number of signatures linked to a masternode in an epoch.

In the event that a masternode is demoted or intentionally resigns from the masternode, the candidate’s deposits (10 million XDC) are locked for 30 days and can be accessed thereafter.

You may be wondering, what’s the Safety Violation and Forensic monitoring feature (part of the Forensic Monitoring Update) employed by the XDC network?

Well, here’s the monitoring feature in detail…

In the unlikely event that the ratio of Byzantine nodes exceeds ⅓ (one-third), these nodes can collude and create a security violation — either a safety or liveness violation. However, they cannot achieve this without being held accountable and punished, thanks to the protocol’s design

When the adversary corrupts more than ⅓ (one-third) of the master nodes in the BFT committee of an epoch, the adversary can violate the safety and jeopardize the consensus by creating forks - such as two finalized blockchains. However, certain messages need to be signed and sent by the corrupt nodes to successfully jeopardize the consensus mechanism. But, the XDC system can detect the messages, gathering irrefutable evidence of a node or nodes’ misbehavior. Worth noting, messages between nodes are embedded into the blockchain and can be obtained by querying master nodes for forked blockchains. This property of XDPoS 2.0 enables XDC’s safety forensic feature, which can identify as many Byzantine master nodes as possible while obtaining proof from querying as few witnesses as possible.

As well, the process of identifying culpable Byzantine master nodes involves performing appropriate quorum intersections since two quorums of tH ≈ VALIDATOR_SET_SIZE × 2/3 master nodes intersect in at least VALIDATOR_SET_SIZE/3 master nodes. With this approach, the XDC network can identify as many Byzantine master nodes that may have colluded to violate the safety and jeopardize the consensus mechanism by creating forks.

For witnesses, two honest nodes that have access to one of the two conflicting blockchains, respectively, are sufficient as proof. Since non-master nodes also passively monitor the blockchain, they can also serve as witnesses. This implies that as long as there are at least two honest nodes on the XDC network and the adversary wants to create a safety violation for the two nodes, the XDC team can provide evidence of the violation. Once a master node is held culpable by the forensic protocol, the proof is forwarded to XDC Network’s governance committee, initiating appropriate penalty mechanisms. We suggest you read the entire 15-page paper detailing XDPoS 2.0, which describes things in detail.

XDC’s network employs slashing of smart contracts and burning up to 100% of XDC Staked by a validator.

On slashing, the XinFin network employs both off-chain and on-chain slashing mechanisms.

For on-chain slashing, validators that engage in equivocation---the process of signing-off two blocks with the same step---trigger the process. Particularly, when a validator node keys in the wrong KYC details, the contract includes a reportMalicious method. If more than 2/3 of the
validators agree on a reportMalicious, an on-chain slashing is executed. This process can burn up to 100% of a validator’s stake.

On the other hand, with off-chain slashing, detection of crafty characters involves a reportBenign functionality. Within a validator's contract is reportBenign, which only validators can call, pass a message, and a block number. Slashing is initiated when more than 2/3 of the Validators agree on the misconduct. Misconduct by validators might include: consistently propagating blocks late and validators being offline for more than 24 hours without notice. Off-chain slashing can be executed on a portion of the stake—say 5%.

Why is the PoS Update important?
Having worked with the delegated proof of stake (DPOS) protocol, the XDC team seeks to unlock significant benefits associated with the PoS protocol. These benefits are as follows:

Integrating the Game theory Element:

Game theory is a fundamental mechanism underlying blockchain technology. And, in PoS blockchains, validators and nominators make decisions rationally, trying to maximize their utilities under the stipulated set of rules, and other participants’ decisions and strategies.

For validators in PoS blockchains, key strategies include making decisions on their stake’s size, whether to run a single node or multiple nodes, etc. Nominators on the other hand have to make decisions like how much and which token to stake, which validators to nominate, etc. Payout to validators and nominators depends on each participant’s strategies and the rules guiding how validators are selected and how rewards are distributed.

That’s a classic example of game theory in blockchain.

So, how will the game theory element work with the XDC network?

Upon upgrading to PoS, all Validators/Master nodes on the XDC network will compete with each other to mine the next block and get the reward, therein. As well, to become validators, each masternode has to stake more XDC, and this step increases loyalty towards the network. This Game theory algorithm will help to increase competition, loyalty, and help to improve the network’s health, and boost decentralization. At the same time, slashing (using a function called reportMalicious) can lead to the burning of 100% of a validator’s XDC stake in case of malicious behaviors.

Noting that validators seek to maximize gains by making rational decisions and with the reward and penalty mechanism in place, malicious acts are highly unlikely. Thus, the game theory element introduced by the PoS upgrade will help improve the decentralized network.

Give Masternode holders the freedom to make decisions

With the upgrade to PoS, XDCs’ masternode holders will have the freedom to decide the staking value of XDC. To illustrate, a masternode holder receiving an annual reward of 800000 XDC for the minimum stake size may decide to stake more, exceeding the 10 million XDC mark as the network won't cap the limit at 10million XDC. This feature will help to improve the network's ability to adjust to changes in Demand or Supply of masternodes in various market situations.

And, will the upgrade change the rewards/stake?

Well, the current annual XDC reward of 86400000 XDC for 108 masternodes remains unchanged [Note: Assuming validators numbers limit to only 108, We have option to increase rewards (after community vote) if we decide to increase mastrnode count (upto) 150]. However, with the PoS upgrade, masternode holders will have the freedom to stake more tokens to increase their chances of participating in the block validation process.

Optimize Performance

Upgrading to PoS will help improve the effectiveness of the network’s Byzantine Fault Tolerance (BFT) mechanism since validators will make decisions that greatly improve their stake. Noting that selecting a validator depends on their stake and the randomness is selection, adopting PoS will help improve performance since selected validators can immediately confirm a transaction if they agree about a bloc’s transactions. As well, due to the randomness in selecting validators, any node can participate in block validation and can share the rewards therein. With lack of a variance in which nodes earn rewards, all masternodes in the PoS network feel motivated to participate actively in the validation process, avoiding network glitches cause by delays by validators.

On the other hand, upgrading to PoS and leveraging the BFT will help optimize XDC network’s smart contract functionality, improving its scalability. To elaborate, BFT mechanisms guarantee speed and consistency, since validators have to agree before a block is generated. This will ensure faster and consistent settlement finality, further reducing transaction settlement times and loads on the network. With reduced loads, the XDC network will cut energy consumption further, hence improve its scalability.

Increase the number of Masternodes /Validators

Currently, the stable network has 108 Masternode/Validators. With the upgrade, the network’s team proposes to increase the numbers to 150 Masternodes. However, this upgrade requires a hard fork the XDC network will require all validators to participate in the upgrade.

So, why doesn't the network propose more than 150 masternodes?

Well, XDPoS Network started with 18 masternode/validators and increased the number to 108 after various tests on performance, network stability, and scalability of real-time transactions. Thus, the XDC’s team is proposing to cap masternode numbers at 150 since they will be adequate for the network’s performance, stability, and scalability.

Bottom-Line
The XDC network values feedback and opinions from XDC community members and Masternode Holders. And, it will be great to get your views on the proposal to migrate from a Delegated Proof of Stake (DPoS) blockchain to a fully Proof of Stake (PoS) blockchain. Another proposal is to update the total masternode from 108 to 130-150 masternode.

Following, the community and masternode holder’s feedback, the XDC community will decide on an appropriate update/upgrade plan. We also welcome other feedback and comments on our developer's forum to keep the XDC network more decentralized and to get more use case adoption.

XDC Network tools and documents for reference : https://xinfin.org/xdc-chain-network-tools-and-documents

Github Links: XinFin Github , XDC Foundation Github
Register on XDC.Dev for documented instructions and to discuss with developers on any issues.

Github Link for this update proposal at: https://github.com/XinFinOrg/XDPoSChain/issues/166

Upcoming blockchain hackathon : XDC Network

Ritesh kakkad — Sat, 04 Jun 2022 14:47:07 +0000

XDC dApp Summer Hackathon
If you can imagine it, you can Build it on XDC Network. Build a dApp this summer on XDC Blockchain Network and Win upto $50,000 in prizes.

Deadline for the Project Submission: Jul 25, 2022 @ 5:00pm EDT

XDC Network Technical Resource : https://xinfin.org/xdc-chain-network-tools-and-documents

Submit your project at: https://xdc.devpost.com/

For support post your technical queries at: https://www.xdc.dev/