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58 lines
2.4 KiB
TeX
58 lines
2.4 KiB
TeX
\section{The 100 Validator Network}
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\subsection{Design Rationale}
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Lux launches with a \textbf{capped set of 100 validators}. This is
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neither a permissioned consortium (which lacks sufficient
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decentralization) nor an unbounded proof-of-stake set (which cannot
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be operated under a coherent regulatory license). It is a carefully
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calibrated middle ground: large enough that no small coalition can
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seize control, small enough that every validator can be individually
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verified and licensed.
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The 100-slot constraint is enforced by the protocol at the P-Chain
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layer and cannot be bypassed without an on-chain governance vote
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requiring two-thirds of the existing validator set.
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\subsection{Proof-of-NFT Gating}
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Each of the 100 validator slots corresponds to a unique
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\textbf{Validator NFT} (ERC-721 on the C-Chain, with equivalents on
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other VMs). Ownership of a Validator NFT is a prerequisite for
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running a validator node. The NFTs are transferable, but every
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transfer triggers a re-evaluation of the new holder's KYC/AML status
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via the Identity Chain (Section~\ref{sec:compliance}).
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This mechanism produces a regulated-yet-decentralized validator
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market:
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\begin{itemize}[nosep]
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\item Anyone can \emph{buy} a Validator NFT on the open market.
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\item Only KYC/AML-verified entities can \emph{operate} the
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corresponding validator.
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\item Slashing is enforced by burning a portion of the NFT-bound
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stake, with the NFT itself remaining with the operator but
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losing staking eligibility until restaked.
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\item A bad actor who buys a Validator NFT but fails KYC loses the
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right to operate but retains the right to sell the NFT to a
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compliant operator.
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\end{itemize}
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This design is the origin of the \emph{proof-of-NFT} terminology
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used throughout Lux consensus literature.
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\subsection{Staking and Rewards}
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Validators stake LUX tokens in addition to holding a Validator NFT.
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The minimum stake is set at genesis and adjustable via governance.
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Rewards accrue proportionally to stake and uptime, with penalties
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for downtime and slashing for double-signing or equivocation.
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The reward curve is designed to incentivize long-term validator
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commitment: validators who operate continuously for twelve months
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receive a \emph{commitment bonus} of 5--15\% on accumulated rewards,
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paid at the end of each commitment period.
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%% ============================================================
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