Hey pNode owner,
You’ve probably wondered about the difference between hosting a virtual node and buying the little plug and play gadget Node. It’s not just about how tech savvy/ tech comfortable you are, they also differ in funding mechanism.
With vNode (virtual node) after you get your virtual machine online, you will need to buy 1750 PRV to stake and become a validator. You will earn 100% of the block rewards and the transaction fees. This is called regular staking.
With pNode, it is slightly different. You can choose to buy 1750 PRV and stake on your own, or you can opt for funded staking. Below are the detailed explanations.
Regular Staking vs Funded Staking
The role of an Incognito Validator is two-fold. The Validator is simultaneously the Funder and the Worker. The Funder stakes 1750 PRV into a node. The Worker validates private transactions on behalf of the Funder.
Typically, the Funder and the Worker split their earnings. The split ratio is often agreed upon and settled off-chain.
There are two different staking mechanisms at play here: regular staking and funded staking.
|Regular Staking||Funded Staking|
|The Split||Alice (100%)||Alice (65%), Bob (35%)|
With regular staking, the Funder and the Worker are the same person. The Funder simply stakes 1750 PRV and carries out the work herself. In this case, the Funder doesn’t have to split her earnings with anyone else.
See also: How to use 1750 PRV to stake on pNode
With funded staking, the Funder and the Worker are two different parties.
For Node, the default setup is as follows:
The Funder is currently the core team. In the future, the Funder could be any user on the network interested in funding Nodes and sharing profit.
The Worker is the Node device.
The initial revenue share ratio is 65/35. The core team keeps 65%, and the Node owner keeps 35%. This revenue share ratio is subject to change at any time.
With this setup, Node owners do not need to own PRV to begin mining. They just need to plug in their Node. The core team handles the staking. This is believed to be the best setup for non-crypto or less technical users.
At any time, Node owners can cancel funded staking with the core team, start regular staking with their own PRV, and reap 100% of the rewards. This cancel feature is being built at the moment and it will go live around March 2020.