There are several ways to use the Cudos Network to earn CUDOS
Become a Cudos Validator and earn CUDOS from transactions. This is the best way to earn yields on your CUDOS, but requires active participation in securing the network.
Stake your CUDOS with a Validator to earn a portion of their transaction rewards. This is the easiest way for any CUDOS holder to not only further secure the network, but also earn yields with their tokens.
Join our incentive testnet programme Project Artemis to complete tasks and earn CUDOS rewards. Or alternately just start developing on the Cudos Network with your own custom smart contracts that leverage scalable compute.
Validators play a unique role in the Cudos Network’s day-to-day workings. They accept transactions, validate blocks, and interact with other stakeholders in various Governance votes that ensure the network’s security, integrity and viability.
As part of that, Validators run and execute smart contracts, which are one of the key aspects of the network, and coordinate the triggering and execution of computing workloads. Thus, the network’s health depends on Validators availability and performance and the early identification of any dangerous and harmful behaviours.
Validators earn several types of standard rewards, apart from one-off additional ones:
- They earn Staking Rewards to incentivise their crypto-economic contributions to the network over time.
- They earn a commission on the stake delegated through them, as part of the delegated proof of stake mechanism, from any users who do not run infrastructure for the network but want to support it.
- They earn gas fees.
After the mainnet is launched and the network gains traction, staking rewards will become a secondary source of revenue, and network fees will become the main one.
Once we deploy the Cudos Network mainnet, Validators (and stakers) staked in Ethereum will be migrated from Ethereum Staking to full PoS staking in the network. The balances will be converted to the native CUDOS token, and Validators will begin processing blocks for the network. At this point, Validators will need to be running Cudos nodes with appropriate hardware to maintain the network and validate transactions.
Cudos is also finalising the architecture of the compute capabilities of the network. We will soon communicate how the compute offering will integrate into the network, and any additional hardware requirements for running compute jobs.
The Cudos Network penalises adverse behaviours, and the node operators or Validators linked to these automatically to incentivise the highest level of security, availability, and economic integrity. The types of penalties a Validator can incur on the network have several levels of severity. Some may lead to immediate, irreversible exclusion. Others may lead to time-outs from additional Staking rewards. Cudos as a team is working to ensure that these metrics are real-time and accurately predictive to guarantee that we only offer the highest quality of computing power on our network.
For instructions on staking, refer to the Funding your nodes section.
The Cudos network will support delegated staking through the Validators. The Validators earn a proportion of the rewards of the users who delegated the staked through them. Each Validator can freely choose the fee. However, it will always need to be above a predefined minimum value set for security reasons. This minimum will be 2% at the start.
Any user with CUDOS tokens, including Validators, can delegate their stake through a Validator. One wallet can delegate the stake to more than one Validator.
All staking participants earn rewards individually based on their staked amount. Each staking participant receives the percentage of the rewards proportional to the percentage of the total stake they own. For example, if a total of 500 tokens are staked by users, and if one of the users staked 50 tokens, then this user gets 50/500 = 10% of the total rewards being distributed (excluding commissions).
Rather than staking all tokens in a Validator hosted by the project, Cudos will stake some tokens delegating them to other Validators in the network. This will enhance the revenue streams for these Validators further. We will share more details on this shortly, but expect the project to delegate an amount similar to the minimum stake for a Validator.
What is delegated staking
Recently, most networks that require the nodes to stake also allow delegated staking. The concept is completely analogous: the nodes of the network stake a certain amount of tokens in order to qualify to be a node, and get rewarded accordingly. For users willing to stake tokens but not necessarily wanting to host a full node, there is the possibility to stake in one of the aforementioned nodes, in order to support it and the network. This is what is commonly understood by delegated staking, and also gives rewards for the contribution.
How to stake via a validator
In order to delegate your stake via a validator you will need the funds you want to delegate (plus a few extra to pay for the transaction fees), and to decide to which validator node you want to delegate the stake to.
Staking pool and provider fees
While all staking rewards are the same, the final amount for users delegating their stake will likely be lower, as the staking providers keep a percentage of the staking rewards that result from tokens delegated to them. This percentage will be choosable by each staking provider, and thus might vary from one to another.
Which staking providers can you choose
There are currently multiple staking providers that are coming onboard, and there will be a diversity of offerings by launch time. A list will be published soon. If you are interested in becoming a staking provider for CUDOS, apply here.