【FNCT 101④】What is FNCT Staking?: Structure

FNCT Staking is an important function which enhances the security of transactions and supports its own value. In this article, you will learn the basic system and how it works.

What is “Staking”?

First of all, I will explain about “Staking”. Among the information related to crypto assets, I am sure that you often see this term “Staking”, and it means the system in which crypto assets owners can earn rewards.

Let me share a more specific example. The blockchain technology which supports crypto assets reports its own transaction regularly, but if this process is operated by specific individuals, that person can freely operate whatever he/she wants and the credibility of the transaction records depends on him/her. This leads to lower credibility and even manipulated frauds.

Therefore, to avoid such problems, in blockchain technology, all the transaction data are recorded by multiple trusted people but not an individual.

In the result, the people who hold more tokens on the blockchain are more considered as trusted people because they are considered as supportive for the token value. And those more token holders operate the record keeping randomly, that leads to the system which is independent from a specific individual’s trust.

This operation is considered as a paid task, so that operators who hold more tokens and work for this task will get incentive rewards.

This record keeping and reward system is called “Staking”.

In other words, Staking means token holders operate record keeping based on their tokens for their proof of trust, and get reward from it.

Then, how does FNCT Staking work?

What is FNCT Staking?

FNCT staking has the same basic concept as staking. The FNCT blockchain also has record keeping operations, and in return for those tasks, FNCT is paid to operators.

Record keeping operation of FNCT Staking

FNCT Staking pays rewards in return for record keeping of FiNANCE app transactions onto Polygon blockchain. This increases the credibility of FiNANCE app transactions.

(note: This record keeping is called “FiNANCiE Lightning”)

Record keeper of FNCT Staking: Validator

The person who operates recording keeping is called a validator. It means a person who “validates” the transactions of the FiNANCiE app. Record keeping is performed once a day, and one person is selected from among multiple validators to actually perform the recording work. Only the validators who actually performed the recording work will receive the reward.

How to be elected for the Validator?

Validators lock their FNCT to indicate how many FNCT they have. Locked FNCT are collected in one place, and validators who do the recording work are selected according to the ratio of locks. Validators who lock more FNCT will have more opportunities to earn rewards.

Is it difficult to become a validator?

I explained that staking is conducted by validators, but not everyone can become a validator. Validators must prepare the environment for recording work and pay the gas fee each time they perform recording work. These preparations are not such an easy task.

(*Currently, there are no plans to openly recruit validators, and it is assumed that it will be operated as a consortium.)

However, there is a way to indirectly cooperate with the recording work without such a lot of preparation.

It is a cooperative method of depositing FNCT with validators for them to increase the amount of locks of validators and increase the probability of being selected as a record worker (This is called “delegating”).

Indirect record keeper of FNCT Staking: Delegator

A person who participates in staking by delegating FNCT in order to increase the probability that the validator will become a record worker is called a delegator.

Delegators get a portion of rewards based on the amount of FNCT they deposited when validators get rewards.

* In some cases, a fee may be deducted from the validator as delegators are not necessary to prepare an environment for recording work or to pay for gas each time the work is performed.

How FNCT staking works

FNCT staking is a system that pays FNCT rewards to validators who perform the “work” of recording FiNANCiE app transactions onto the Polygon blockchain.

We also have a system to distribute rewards to delegators who cooperate with validators in depositing FNCT to increase their chances of winning rewards.

FNCT Staking supports FNCT Ecosystem

FNCT locked by both validators and delegators will be used for “governance” to improve the FNCT ecosystem.

In addition, locked FNCT will be unavailable for trading for 180 days. Under these circumstances, validators contribute the value of FNCT with receiving FNCT rewards through daily recording work (validation).

Now, you may know that FNCT staking is an important function that supports the FNCT ecosystem.