Validator Model

Staking $QUOTO as a Validator The Quoto network utiliizes a delegated proof-of-stake system to strike a balance between ease of participation and network security. Any entity or persons wishing to become a validator must initially have a pre-requisite minimum stake of [XX] $QUOTO. This is necessary as it discourages bad actors with minimal investment and ensures validators have the right incentive alignment to process transactions with validity. Validators who own a significant amount of $QUOTO may delegate to qualified validators in the Quoto ecosystem, who meet the hardware and security audit requirements. In exchange for a percentage of the block reward, delegated validators do not have to run the specific hardware necessary to own the chain.

Slashing Penalty

The Quoto network implements a slashing mechanism for validators that are proven to be malicious (based on fraud proof attestations) or negligent in upkeep (e.g., downtime, incorrect block proposals, failed challenges or assertions on block state). A portion of the slashed stake will be distributed to honest validators and the rest will be burned to benefit the ecosystem as a whole as a deflationary mechanic. Bonded stakes can only be slashed through assertions of behavior, proven through contracts hosted on root chain.

Permissioned, then Open

The first [XX] validators in the Quoto network are handpicked based on criteria of proven technical expertise to ensure network resilience, security, and functionality. Overtime, validator applications will be opened up to any party who meets the minimum stake and hardware requirements.

Earn $QUOTO as a Validator

Validators earn block rewards through staking their $QUOTO, either as a delegated or hosted validator. Block rewards in $QUOTO are distributed proportionally to all validators based on reputation (i.e. uptime and performance) and stake size. The larger the size of a validator’s stake, the larger the probability of higher $QUOTO rewards, discounted only by a poor reputation score. Reputation is calculated using the function of the following metrics, combined into a singular score: Uptime: Validators with high uptime (percentage of time their node is online and participating) have a high reputation to incentivize reliable network operation.

Block Proposal Rate: Reputation score tracks the rate at which validators propose new blocks. Validators who consistently propose blocks at the expected rate to ensure smooth transaction processing will have higher reputation.

Block Latency: Measure the average time it takes for a validator to propose and finalize a block. Validators with lower block latency help streamline network efficiency, and are rewarded with higher reputation.

Liveness Score: This metric goes beyond uptime and considers whether a validator is actively participating in consensus even when online. The Quoto network establishes a system that checks if validators vote on proposed blocks and penalize those who remain passive. Validator Churn: Monitor the rate at which validators join and leave the network. As high churn can indicate instability and hinder decentralization, validators with long commitment history are rewarded.