The new Taiwan dollar’s success in 2019 can’t hide the fact that tokens have a single purpose. How to find new application scenarios besides repo destruction and transaction fee deduction? Binance’s answer is to expand the public chain ecosystem and expand Taiwan dollar into a wider public chain token like ETH.
Not long ago, CoinEx announced that it would also launch the public chain. CET will not only be the flat Taiwan dollar in the future, but also the basic token of the public chain ecosystem. Unlike Binance, CoinEx Chain nodes are not directly operated by partners, but are elected by ordinary users. Obviously, this is another paradigm shift in the expansion of application scenarios.
CoinEx Chain is a public Chain specially created for DEX by CoinEx’s professional blockchain r&d team at the bottom. Different from other DEX, CoinEx Chain is divided into the parallel three-chain architecture of DEX public Chain, Smart public Chain and Privacy public Chain. The three chains, which focus on transactions, smart contracts and privacy, are connected through an “IBC protocol”.
So how do you participate in the CoinEx Chain ecosystem? The following is a detailed interpretation of CoinEx DEX public chain node recruitment.
How to participate in the node election of CET?
CoinEx’s node campaign rules are pretty straightforward: any CET holder who pledges 5 million tokens on the chain meets the entry requirements, and by being among the top 42 in node voting, automatically becomes a validated node and gets block sharing benefits. It is important to note that this process of electing block nodes is ongoing, and each block is ranked.
The responsibilities of the verification node include preventing double-check, always online, node upgrade, configuring upgrade, DDos attacks, private key storage architecture, and participating in community governance. Of course, verifying nodes also requires certain hardware requirements, as follows.
After the launch of CoinEx’s main network (expected in early November), CET coins can be pledged on the chain from CoinEx. After the pledge, you can initiate the cancellation operation at any time, but it takes 21 days for CET to return to the account.
Retail investors who hold less than 5 million CET coins will also be given the right to vote for the verification node and receive dividends.
What are the benefits of being a CET validation node?
After studying the CoinEx node revenue model, it is found that the revenue of the verification node comes from two parts: block reward and transaction commission.
Transaction fees include normal Gas fees and function fees. A Gas handling fee will be charged for any transaction initiated on the chain. And function charge is to point to the charge when the special operation appears on the chain. For example, a node is equivalent to a DEX broker and charges for matching trades, issuing coins, setting up trade pairs, establishing bancor automated market making, setting up address aliases, and so on.
In terms of block rewards, the CoinEx Foundation will release a total of 315 million CET for five consecutive years, with about 105 million CET in the first year. Similar to bitcoin’s design, block rewards will gradually decrease over time, but with a different frequency. CET’s block rewards decrease by 2 et per year.
The underlying data for CoinEx is shown in the figure below. Assuming that annual fee revenue for A CoinEx verification node is approximately 38 million CET, a CET return on a CoinEx verification node is 10%, based on 50% full network Staking.
How to calculate the actual income of the node in the current year?
Here we summed up a quick set of numbers into the calculation formula for your reference. Assuming that the total pledge number of a node is A, divided into P % self-mortgaged CET and Q % retail entrusting CET, the total pledge number of the whole network is B, the annual actual distribution income of the whole network is C, and the commission ratio of the node is K, then the actual income of the verified node in the current year is
For example, the total pledge amount of a verification node in that year is 10 million CET, among which 8 million CET is self-owned assets and 2 million CET is the amount pledged by ordinary coin holders. The commission proportion is 10%. According to the calculation that the total pledge amount of the whole network is 1 billion CET and the total income actually distributed is 150 million CET, then the actual income of this verification node is 1.23 million CET. In this scenario, CET has an annualized yield of about 15.3%.
So, we can see that the actual income of a CoinEx verification node, in terms of asset ownership, is broken down into two parts: self-mortgaged Staking income and commission income from ordinary money holders pledging CET.
In other words, if a verification node continues to secure the CET public chain, contributes to the CoinEx ecosystem, and gets more attention and goodwill from average users, then staking is better annual staking than the foundation. Retail investors can also pledge CET to more professional and responsible nodes and share the dividends of this node and CET public chain.
The Matthew effect has always been a topic of criticism in the node campaign. So in CoinEx’s rules, will the common coin holders promote the centralization of verification nodes? CoinEx’s rules don’t encourage this, but as with all PoS models, a moderate degree of centralization, or the trade-off between decentralization and centralization, is inevitable. The reason is that, mathematically at least, the annual income pledged to nodes by retail investors is that aq% of the same amount of money is the same for each verification node, with the only difference being K, the node commission ratio. In other words, in terms of economic benefits alone, the benefits of retail investors voting for different nodes do not depend on the scale, but the proportion of commission fees, and reputation and other more implicit reasons.
There are many public chains similar to the “super node” campaign, and CoinEx’s pros and cons analysis
There are many public chains on the market that resemble the “super node” campaign system, of which EOS and IOST are the most famous. So, how does CoinEx’s node campaign compare to theirs?
From the point of view of node campaign, IOST needs 2.1 million votes (one vote for one coin). According to the currency price of 0.0044 dollars at the time of writing, IOST needs at least 0.93 million dollars of fund support, which is very low. According to the data from EOS REX, if a consortium with no user base wants to acquire the block rights through leasing, it will cost about $2.55 million (about 18 million YUAN) a year. However, the lowest threshold of CoinEx Chain node is 5 million CET, which is estimated at usd 0.02, about USD 100,000, which is relatively moderate.
In terms of hardware cost, according to the hardware configuration mentioned above, it is usd 1000 per year. AWS estimates the operating cost of corresponding configuration of T3. xlarge at USD 1458 per year, which is USD 2916 for one master and one spare, which can be said to be very low. (The specific data may change slightly in reality.) Take the recommended node server when EOS officially announces the node election as an example. It adopts amazon AWS EC2 host X1.32x Large, with 128-core processor, 2TB memory, 2x1920GB SSD storage space, 25Gb of network bandwidth. The daily operating cost of one active/standby server is $13.338 x 24 x 2 = $640. As a result, the server CoinEx uses is cheap and accessible, avoiding the wasteful configuration of EOS servers and eliminating intangible costs.
In terms of the number of nodes, CoinEx Chain has 42 verification nodes, EOS has 21 block producing nodes in each round, and IOST has 63 nodes. Therefore, CoinEx Chain is in the middle of the trade-off between decentralization and efficiency. In addition, the CET node campaign’s estimated hardware cost of $1,000 a year is also relatively low.
In general, the node campaign design of CoinEx Chain is very reasonable. This event is destined to be a milestone for CoinEx. After going through “trading is mining” and “repo destruction”, The DEX public chain CoinEx aims at this time is a paradigm shift, which makes CET jump out of the limitation of Taiwan dollar. We will wait and see the future of CET.