The Blast platform was created with the purpose of bringing true reliability and scalability to the Web 3 space via decentralization of the underlying blockchain infrastructure in a clear and straightforward manner.
All participants who are willing to join the platform and support their preferred networks with their knowledge and, of course, their full nodes will be able to take part in a fair and well-thought incentivization mechanism based on the BWR token. On the other hand, in order to ensure the quality of the platform and the best infrastructure services in the industry, Node Providers will also be required to have some skin in the game via staking. This will allow the platform to automatically maintain a high quality of service and self-regulate by rewarding the best-performing nodes while taking immediate actions against underperforming ones so that the end users will never be affected in any way.
Moreover, the Blast staking mechanism offers BWR token holders and supporters the opportunity to delegate their tokens and receive consistent APYs while participating in the advance of the entire Blast ecosystem.
In the following sections, we will describe how the Blast staking mechanism works and what are the potential earnings for every type of participant.
For the purpose of clarity, here are the definitions of the terms as we see them within Blast:
- Staking - the process of locking up BWR tokens by a node provider who is running an Active node within Blast and has created a corresponding Staking Pool
- Delegation - the process of locking BWR tokens by a token holder on a specific Staking Pool that they don’t own with the purpose of obtaining an APY
- Staking Pool - technical term used in blast to define opening a staking and delegation pool attached to an active node, so that both Node Providers, as well as delegators, have the possibility to earn an APY via staking or delegations respectively
- Epoch - a time period used as a reference for the calculation of rewards. Also, the amount of time that needs to pass before new rewards become available
- Epoch duration: 24h
In order to create a Staking Pool, and start the staking process all Node Providers need to have a corresponding active node registered within the Blast platform.
At the same time, a minimum of 3000 BWR are required as a base stake before the Staking Pool can be created.
The staking model within the Blast platform relies on the calculation of a total amount of rewards per epoch from which all individual rewards are distributed to both Node Providers and Delegators.
The total epoch reward pool has to be calculated so that it will sustain the necessary APY for Node Providers to be profitable while, at the same time, making it worthwhile for Delegators to lock their BWR Token into the protocol.
With that in mind, the total reward pool R is calculated as follows:
- At first, an Average Token APY (ATA) is configured based on a range of factors from infrastructure cost to the BWR token value.
- Then the total reward pool per epoch R = ATA * T * previousEpochLength/365 where T is the total number of tokens staked on the protocol.
To encourage the registration of third-party nodes and the creation of new Staking Pools, the protocol also sets a Saturation Cap applicable to all the Staking Pools
Saturation Cap = Circulating Supply/ Number of required pools in the Protocol
The maximum APY on a specific Staking Pool will be achieved at the moment where the sum of staked and delegated tokens for that particular pool is equal to the Saturation Cap. That happens because the protocol distributes the rewards based on the staked and delegated token amounts for each pool but it maxes out at the Saturation Cap. This means that if the amount of tokens locked on the Staking Pool is higher than the Saturation Cap, the protocol will only allocate the number of rewards corresponding to the Saturation Cap amount resulting in a smaller APY relative to the locked value.
A coarse estimation of the individual Staking Pool rewards can be described as follows
- For each epoch a Staking Pool is expected to produce a number of rewards described by the following formula:
r = (R * Tpool)/T where (r = pool rewards per epoch, R = total rewards reserved for the current epoch, T = total tokens staked on the protocol, Tpool = total tokens staked and delegated on the respective pool)
- A penalty based on the node score is applied using the formula below:
r= r x penalty where the penalty is a score between 0 and 1 calculated based on the node performance and jail time
- Once the total rewards per pool are calculated the rewards are split between delegators and the Staking Pool Owner as follows:
r = (1 - s/t) * (t*ATA*c) + (s*ATA) + IR where (c = commission, t = Tpool, s = amount staked by owner, IR = infra rewards - infrastructure score calculated based on the hardware requirements to run a node on each network)
r = d * ATA * (1-c) where (d = amount delegated)
Staking amount required to create a Staking Pool: 3000 BWR
Unstake/Undelegate period: 10 days
Rewards claim frequency: each epoch (24hrs)
Note: A Staking Pool owner will be able to stake an amount higher than required, but the unstaking is available only until the minimum limit of 3000BWR. In order to unstake all the tokens, the owner will have to close the Staking Pool which will also cause the related node to be deactivated.