# Staking and Council Node

Crypto.com Chain is based on Tendermint Core's consensus engine, it relies on a set of validators (Council Node) to participate in the proof of stake (PoS) consensus protocol, and they are responsible for committing new blocks in the blockchain.

# Staked state / Account

StakedState is a data structure that holds state about staking:

pub struct StakedState {
    pub nonce: Nonce, // transaction / update counter
    pub bonded: Coin, // bonded stake amount
    pub unbonded: Coin, // unbonded stake amount
    pub unbonded_from: Timespec, // when the unboded stake amount can be withdrawn
    pub address: StakedStateAddress, // ETH-style address of staking account
    pub punishment: Option<Punishment>, // punishment data structure -- FIXME: details
    pub council_node: Option<CouncilNode>, // associated council node metadata
}

TODO: should it have a minimum bonded amount?

# Council Node

Council Node is a data structure that holds state about a node responsible for transaction validation:

pub struct CouncilNode {
    pub name: String, // human-readable name
    pub security_contact: Option<String>, // optional email for security contact
    pub staking_address: RedeemAddress, // account with the required staked amount
    pub consensus_pubkey: crypto.PubKey, // Tendermint consensus validator-associated public key: note that Tendermint supports different signature schemes
    pub council_pubkey: PublicKey, // key for council node-related transaction types
    // FIXME: bootstrapping
}

# EFFECTIVE_MIN_STAKE

Effective minimum stake (EFFECTIVE_MIN_STAKE) is defined as follows at any time:

  1. if the number of validators has not reached MAX_VALIDATORS, it is COUNCIL_NODE_MIN_STAKE (the network parameter)
  2. if the number of validators has reached MAX_VALIDATORS, it is equal to the lowest bonded amount of the staked states of the current validators plus 1.0 Coin.

# Joining the network

Anyone who wishes to become a council node can submit a NodeJoinTx; this transaction is considered to be valid as long as:

  1. The associated staking account has bonded amount >= EFFECTIVE_MIN_STAKE and is not punished;
  2. There is no other validator with the same staking_address or the consensus_pubkey

# Leaving the network

Anyone who wishes to leave the network, provided their associated staked state does not have any punishments, can submit UnbondStakeTx with the amount that will reduce the bonded amount to be lower than COUNCIL_NODE_MIN_STAKE.

# Voting power and proposer selection

At the beginning of each round, a council node will be chosen deterministically to be the block proposer.

The chance of being a proposer is directly proportional to their voting power at that time, which, in general, is equal to the bonded amount (rounded to the whole unit) in the associated staking address of the council node.

The top MAX_VALIDATORS with the most bonded amount would put to the active validator set in END_BLOCK. If a validator's bonded amount is below the top MAX_VALIDATORS, It will be considered as non-active and would not be able to take part in the consensus. For example,

  • If the number of active validators < MAX_VALIDATORS:

    bonded amount < COUNCIL_NODE_MIN_STAKE bonded amount => COUNCIL_NODE_MIN_STAKE
    Validator's voting power Set to 0 Set to the bonded amount
  • On the other hand, If the number of active validators = MAX_VALIDATORS:

    bonded amount is below the top MAX_VALIDATORS Otherwise
    Validator's voting power Set to 0 Set to the bonded amount

# Removed validators / council nodes

A Validator is removed when its voting power is set to 0. This can happen in the following scenarios:

  1. The Validator is being punished for infraction(s).
  2. Its operator submitted UnbondStakeTx with sufficient stake to leave the network.
  3. When the bonded amount <= EFFECTIVE_MIN_STAKE

When this happens, the following metadata is cleaned up as follows:

  • its associated reward tracking-related data is cleared:
    • (a) immediately (if the validator is being punished)
    • (b) in the block that triggers next reward distribution (otherwise)
  • its liveness tracking information is cleared in the block when this occurs
  • its slashing related information (mapping Tendermint address / pubkey => staked state address) is scheduled to be cleared in a block after the current block time + MAX_EVIDENCE_AGE (SLASH_MAP_DELETE)

Note this inequality must be checked in network parameters: UNBOND_PERIOD >= JAIL_DURATION >= MAX_EVIDENCE_AGE

If the validator wishes to re-join the validator set, they can (unjail if necessary and) submit a NodeJoinTx (see the Joining the Network section).

If the NodeJoinTx transaction is valid AND this happens before SLASH_MAP_DELETE AND the consensus pubkey (or associated Tendermint address) from NodeJoinTx transaction is the same, the previous slashing information is preserved (i.e. the "delete schedule" is cancelled).

If the NodeJoinTx transaction is valid AND this happens before next reward distribution AND the consensus pubkey from NodeJoinTx transaction is different, the associated staked state is then rewarded for interactions with both consensus pubkeys (as reward tracking is per staked state).

# Validators / Council Nodes

Each BeginBlock contains two fields that will determine penalties:

  • LastCommitInfo: this contains information which validators signed the last block
  • ByzantineValidators: evidence of validators that acted maliciously

Their processing is the following:

FIXME: this looks out of date?

for each evidence in ByzantineValidators:
    if evidence.Timestamp >= BeginBlock.Timestamp - MAX_EVIDENCE_AGE:
        account = (... get corresponding account ...)
        if account.slashing_period.end is set and it's before BeginBlock.Timestamp:
            account.slashing_period.slashed_ratio = max(account.slashing_period.slashed_ratio, BYZANTINE_SLASH_RATIO)
        else:
            if account.slashing_period.end is set and it's after BeginBlock.Timestamp:
                END/COMMIT_BLOCK_STATE_UPDATE(deduct(slashing_period, account))

            account.slashing_period = Some(SlashingPeriod(start = Some(BeginBlock.Timestamp),
                end = Some(BeginBlock.Timestamp + SLASHING_PERIOD_DURATION, slashed_ratio = BYZANTINE_SLASH_RATIO)))
            account.jailed_until = Some(BeginBlock.Timestamp + JAIL_DURATION)


for each signer in LastCommitInfo:
    council_node = (... lookup by signer / tendermint validator key ...)
    update(council_node, BLOCK_SIGNING_WINDOW)

for each council_node:
    missed_blocks = get_missed_signed_blocks(council_node)
    if missed_blocks / BLOCK_SIGNING_WINDOW >= MISSED_BLOCK_THRESHOLD:
        account = (... lookup corresponding account ...)
        if account.slashing_period.end is set and it's before BeginBlock.Timestamp:
            account.slashing_period.slashed_ratio = max(account.slashing_period.slashed_ratio, LIVENESS_SLASH_RATIO)
        else:
            if account.slashing_period.end is set and it's after BeginBlock.Timestamp:
                END/COMMIT_BLOCK_STATE_UPDATE(deduct(slashing_period, account))

            account.slashing_period = Some(SlashingPeriod(start = Some(BeginBlock.Timestamp),
                end = Some(BeginBlock.Timestamp + SLASHING_PERIOD_DURATION, slashed_ratio = LIVENESS_SLASH_RATIO)))
            account.jailed_until = Some(BeginBlock.Timestamp + JAIL_DURATION)

# “Global state” / APP_HASH

Tendermint expects a single compact value, APP_HASH, after each BlockCommit that represents the state of the application. In the early Chain prototype, this was constructed as a root of a Merkle tree from IDs of valid transactions.

In this staking scenario, some form of “chimeric ledger” needs to be employed, as staking-related functionality is represented with accounts. In Ethereum, Merkle Patricia Trees are used: (The alternative in Tendermint: depends on the order of transactions though)

They could possibly be used to represent an UTXO set: https://medium.com/codechain/codechains-merkleized-utxo-set-c76c9376fd4f

The overall “global state” then consists of the following items:

  • UTXO set
  • Account
  • RewardsPool
  • CouncilNode

So each component could possibly be represented as MPT and these MPTs would then be combined together to form a single APP_HASH.

# END/COMMIT_BLOCK_STATE_UPDATE

FIXME: scheduling slashing cleanup

Besides committing all the relevant changes and computing the resulting APP_HASH in BlockCommit; for all changes in Accounts, the implementation needs to signal ValidatorUpdate in EndBlock.

For example, when the number of active validators is less then MAX_VALIDATORS:

  • When the changes are relevant to the bonded amount of the council node’s staking address and the validator is not jailed:

    • If the bonded amount changes and < COUNCIL_NODE_MIN_STAKE, then the validator’s voting power should be set to 0;
    • If the bonded amount changes and >= COUNCIL_NODE_MIN_STAKE, then the validator’s voting power should be set to that amount (rounded to the whole unit).
  • When the changes are relevant to the jailing condition of the council node’s staking address:

    • If the jailed_until changes to Some(...) (i.e. the node is being jailed), then the validator’s power should be set to 0;

    • If the jailed_until changes to None (i.e. the node was un-jailed) and bonded amount >= COUNCIL_NODE_MIN_STAKE, then the validator’s power should be set to the bonded amount (rounded to the whole unit).

      It can be summarized in the following table:

      bonded < COUNCIL_NODE_MIN_STAKE bonded >= COUNCIL_NODE_MIN_STAKE but Jailed bonded >= COUNCIL_NODE_MIN_STAKE and NOT jailed
      Validator's voting power Set to 0 Set to 0 Set to the bonded amount

On the other hand, If the number of the current active validators is equal to MAX_VALIDATORS, the validator's voting power will also be depended on whether its bonded amount is at the top MAX_VALIDATORS, please refer to the previous section

# InitChain

The initial prototype’s configuration will need to contain the following elements:

  • Network parameters
  • ERC20 snapshot state / holder mapping initial_holders: Vec<(address: RedeemAddress, is_contract: bool, amount: Coin)> (or Map<RedeemAddress, (bool, Coin)>)
  • Network long-term incentive address: nlt_address
  • Secondary distribution and launch incentive addresses: dist_address1, dist_address2
  • Initial validators: Vec<CouncilNode>
  • Bootstrap nodes / initially bonded: Vec<RedeemAddress>

The validation of the configuration is the following:

  1. validate parameters format (e.g. CUSTOMER_ACQUIRER_SHARE + MERCHANT_ACQUIRER_SHARE + COUNCIL_NODE_SHARE = 1.0)
  2. check that sum of amounts in initial_holders == MAX_COIN (network constant)
  3. check there are no duplicate addresses (if Vec) in initial_holders
  4. for each council_node in Vec<CouncilNode>: check staking_address is in initial_holders and the amount >= COUNCIL_NODE_MIN_STAKE
  5. for each address in initially bonded Vec<RedeemAddress>: check address is initial_holders and the amount >= COMMUNITY_NODE_MIN_STAKE
  6. size(Validators in InitChainRequest) == size(Vec<CouncilNode>) and for every CouncilNode, its consensus_pubkey appears in Validators and power in Validators corresponds to staking address’ amount

If valid, the genesis state is then initialized as follows:

  1. initialize RewardsPool’s amount with amounts corresponding to: nlt_address + dist_address1 + dist_address2
  2. for every council node, create a CouncilNode structure
  3. for every council node’s staking address and every address in initially bonded: create Account where all of the corresponding amount is set as bonded
  4. for every address in initial_holders except for nlt_address, dist_address1, dist_address2, council nodes’ staking addresses, initially bonded addresses: if is_contract then add the amount to RewardsPool else create Account where the amount is all in unbonded and unbonded_from is set to genesis block’s time (in InitChain)