Velas, the Swiss AI-enabled blockchain, has today announced the launch of its masternode staking program. Masternodes on the Velas network will be able to stake the VLX token for the opportunity of producing blocks on the main net. The move comes as part of the project’s alpha launch, in advance of a beta launch early next year.
Velas operates an Artificial Intuition Delegated Proof-of-Stake (AIDPoS) consensus, meaning that tokens serve a dual purpose in consensus. Nodes operating the network stake tokens as part of the block production process, whereas, like fellow DPoS blockchain EOS, token holders can also stake tokens to elect nodes. Therefore, staking is a vital part of consensus, keeping the blockchain moving.
Earlier this year, Velas launched proprietary wallets as a precursor to enabling the staking process. Users can download the desktop version of the wallet for Windows, MacOS, or Linux. The wallet is also available within the web browser. To become a masternode on the Velas network, users will need to have over one million VLX tokens, worth around $30,000 at today’s prices.
However, if you don’t happen to have a spare $30k worth of VLX tokens sitting around in your wallet, then there’s still a chance to participate in staking. Velas has teamed up with CoinPayments, a company that was also set up by the Velas founder, Alex Alexandrov. Users only need to set up an account on CoinPayments, from which they can participate in pooled staking of their VLX tokens.
The plan is ultimately for the platforms AI algorithm to take over the reward distribution for block producers. However, Velas is still under development, and the AI algorithm isn’t yet primed to deliver this feature. Therefore, the company has set staking rewards at 8%. This is pretty generous when you consider that returns from staking EOS are currently running at a little under 2%.
EOS Commits to Better Decentralization
Delegated proof-of-stake frequently comes under fire for making blockchains too centralized. For example, EOS has only 21 block producers that control the entire network. Critics state that this puts the platform at risk, as only a small number of nodes would need to collude to bring down the network. Furthermore, node elections can be skewed by whale accounts, such as exchanges, that hold a large number of tokens.
Block.One, the open-source software company behind EOS, frequently fights back against these claims. Most recently, the company has committed to ensuring that voting becomes more decentralized. Previously, it’s declined to wield its own influence over the voting process, as a holder of nearly one-tenth of all EOS tokens. However, it’s now stated that it will participate in voting going forward, as a means of aligning “network capability, geographical distribution, and security.”
It’s not clear from the Velas documentation exactly how the company plans to overcome the centralization challenge. However, it doesn’t appear to be putting any upper limit on the number of nodes that can operate the network, which may help.