Now and in the future: what it’s like to be an Incognito Node

Hello Incognito nodes! Welcome to the beginning. Thank you for powering this network and creating a solid foundation to help it scale. As Incognito grows, node numbers will change, and so will current configurations.

Here’s a quick rundown of where we’re currently at, and a brief overview of where we’re headed:

Short term (now to 1 year from now)

1. Current number of nodes: 860

As of 11 December 2019, this includes both virtual nodes (staked) and physical nodes (online and in transit).

2. PRV earnings per epoch: ~10.92 PRV for the first year

This number does not include PRV earned through transaction fees, which will vary based on network usage.

3. Other token earnings per epoch: variable

This depends on the number of transactions made in say, pBTC or pETH. Each transaction is processed by a shard, and fees will be evenly split between all validators in that shard.

4. Epoch duration: 4 hours

Approximately 350 blocks at 40 seconds each. 1 epoch will always be 350 blocks, but the block time may change in the future.

5. Number of shards: 8

Starting with the Highway implementation scheduled for early 2020, we hope to start scaling this number to 64 over time.

6. Number of validators per shard: 32

Starting with the Highway implementation scheduled for early 2020, we hope to scale this number to 256 over time.

7. Fixed committee set up: 10 substitutable community slots, 22 fixed team slots

This configuration is a safety measure while the network finds its feet: at this stage, a majority of nodes must be committed to staying online 24/7, to ensure the network can function. Given the current number of nodes on the network and the low barriers to entry, it is easy for single players to command considerable control unless restricted in some way — the network will be vulnerable to attacks if the majority is not preserved by the team responsible for keeping it running.

As Incognito scales, it will be hard for single players to ‘own’ a significant part of the network, and nodes will be able to safely drop in and out without affecting the overall running and security of the network. There will then be no need for a fixed setup. These fixed slots will be gradually released to the community beginning in March 2020.

8. Selection process: random uniform distribution

Every epoch, every node has an equal chance of being selected to be part of a committee (to earn). Short term earnings may be variable among nodes, but over time, earnings will even out.

9. Block reward distribution: 90% to validators, 10% to the DAO fund for the first year

The DAO fund is a shared pool of funds that will be used to fund community growth and protocol development, through initiatives such as developer grants or community education funding. Community members will be able to vote on these initiatives and decide where DAO funds should be distributed.

10. Total supply: 100M

This number will never increase. 5M was pre-mined and purchased by the core team to cover the initial starting costs of the project. 95M of the 100M PRV total supply is mined through block rewards. PRV will be fully mined after 40 years.

Long term (more than 1 year from now)

1. Number of nodes: ideally a minimum of 32,768

The greater the number of nodes, the safer the network. The team will continue to seek out opportunities to onboard potential validators. At full scale, there can be 16,384 nodes (256 nodes per shard, 64 shards) earning at the same time. For extra security, if we account for nodes being swapped in and out — that’s at least double the number, for a total of 32,768 nodes.

2. PRV earnings per epoch: depends on the year

3. Other token earnings per epoch: variable

As the network continues to grow, and especially with products such as pDEX and Portal, we hope that a significant proportion of total earnings will consist of multi-currency transaction fees.

4. Epoch duration: depends on block time

Each epoch is 350 blocks — this is fixed. Block time however, is variable, depending on how the network develops.

5. Number of shards: 64

This is the long-term goal.

6. Number of validators per shard: 256

This is the long-term goal.

7. Flexible committee set up: fully decentralized

No fixed validator slots — all are substitutable.

8. Selection process: random uniform distribution

9. Block reward distribution: depends on the year

The total block reward for the first year is 8,751,970 PRV. Block rewards are reduced by 9% for every subsequent year.

10. Total supply: 100M

Virtual node FAQs

1. Why are other nodes earning more/less than mine?

Nodes only earn on epochs where they are selected to be part of the committee. While in the committee, all validators earn the same amount. However, this selection process is completely random — all running nodes have equal chances of selection, and equal chances of being swapped out.

This means that earnings will vary between Nodes when viewed within a short period, but will even out over time through random uniform distribution.

2. Does having a more powerful server mean more earnings?

No. It simply means your node is more stable.

3. When will I be able to unstake?

Unstaking functionality will go live in mid-December 2019.

4. Will my vNode turn a profit?

This depends on a few factors:

– Your server costs — some options are more affordable than others
– The success of the Incognito network — nodes will earn transaction fees in not just PRV but also pBTC, pETH, pBNB and other transacted currencies
– The price of these earned currencies
– The time at which you are assessing your ROI, as PRV earnings will vary over time

5. I don’t have enough PRV to run my own virtual node. How can I stake?

You can join a staking pool — there are a few organized by the community, and one by our friends over at Constant. Your returns will vary depending on the service you choose.

Physical node FAQs

1. Do I need 1750 PRV to stake?

No. Physical Nodes will have automatic access to a shared pool of PRV where they will receive the required funds to stake.

2. Do physical nodes earn the same as virtual nodes?

As per the mechanism described above, the physical Node will initially receive 25% of earnings, as a ‘worker’. 75% will be distributed to the ‘funder’. At any point in time, you are free to simply stake the required 1750 PRV on your own, become both the ‘worker’ and the ‘funder’ — and earn 100% of the rewards.

3. When can I use my own PRV to stake instead of using funded PRV?

From March 2020 onwards.

4. Will my pNode turn a profit?

This depends on a few factors:

– The success of the Incognito network — nodes will earn transaction fees in not just PRV but also pBTC, pETH, pBNB and other transacted currencies
– The price of these earned currencies
– The time at which you are assessing your ROI, as PRV earnings will vary over time

5. Can I build my own pNode?

Yes! We love these projects. Feel free to connect with the team to bounce ideas.

If you have any other questions, please feel free to reach out to us at @incognitonode on telegram. We’ll be keeping this page updated.

Concluding note

A commonly asked question is whether more nodes coming online will affect earnings. There is currently a limited number of committee slots open — fewer than the number of nodes. This means that at the moment, your chances of being randomly selected every 4-hour epoch will decrease as the number of nodes increase.

As the network scales, however — there will be more shards that support more validators, and all slots will be eventually released to the community. The 80 slots currently available will steadily increase to 16,384 slots. The first big push to scale the network will occur with the Highway implementation in early 2020.

Since the mainnet launch 1 month ago, the number of nodes has multiplied more than 20x. While some may be seeing temporarily decreased earnings, this is incredibly exciting for a number of reasons. The network is becoming more secure, more people are learning about the project, and the network is seeing increased usage.

And most importantly — now there are 20x as many people who believe enough in privacy to stake their own funds and offer the world a choice.

Thanks for sticking by us during the teething period.

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