Proof of Transfer (PoT)
Proof of Transfer (PoT) is the secondary layer of Axis Chain’s dual consensus model, designed to enhance security, optimize validator performance, and ensure the network remains lean and efficient. While Axis Chain is built as a permissionless system—allowing anyone to participate in network validation—PoT introduces a system where validator performance is continuously monitored and evaluated. This ensures that only the most effective validators are selected to secure the network, particularly in cases where there are too many nodes for the network to handle efficiently.
By incorporating a performance-based weighting system, PoT ensures that validators who consistently perform well are given higher responsibility, rewarded more generously, and penalized more severely if they act maliciously.
How PoT Works
PoT in Axis Chain is designed to evaluate validators based on their historical performance in block validation and transaction correctness. Validators that consistently validate more blocks and process transactions correctly earn higher PoT scores, which in turn gives them more influence in the network and greater financial rewards.
Key Mechanics of PoT:
Validator Performance Tracking:
PoT scores are assigned to each validator based on their performance in validating blocks and correctly processing transactions over time. Validators who demonstrate consistent and accurate performance are rewarded with a higher PoT score.
Validators with higher PoT scores gain greater weight in the consensus process, meaning they are more likely to be selected to validate future blocks.
This mechanism not only incentivizes high performance but also creates a dynamic system where validators must continuously maintain their performance to retain their status.
Weighting System:
PoT introduces a performance-based weighting system for validators. Validators with higher PoT scores receive a greater weight in the network, meaning they have a higher probability of being selected to validate blocks and process transactions.
Higher-weighted validators enjoy greater financial rewards, as they are selected more frequently to participate in block validation and receive a larger share of the transaction fees and rewards.
However, this weighting system also comes with increased responsibility: higher PoT-weighted validators face greater penalties if they fail to meet security and performance standards. The higher their weight, the greater the slashing penalty if they act maliciously or perform poorly.
Network Efficiency through PoT:
To maintain a lean and efficient network, Axis Chain leverages PoT to limit the number of active validators when the network becomes overloaded with too many nodes. WhileAxis Chain remains permissionless in nature, allowing anyone to join as a validator, only the top-performing PoT validators will be eligible to participate when the network is saturated.
This ensures that the network continues to operate smoothly, without unnecessary overhead from underperforming or redundant validators. Only the most trusted and efficient validators will secure the network during high-load periods, maintaining both security and performance.
PoT’s Role in Security and Trust
PoT plays a critical role in ensuring the security and trustworthiness of the network by continuously evaluating and rewarding well-performing validators, while penalizing those who underperform or act maliciously.
Performance-Driven Security:
Validators are incentivized to act honestly and efficiently, as their PoT scores determine their standing in the network. A validator with a higher PoT score is trusted more by the system, and therefore, has a greater role in ensuring network security.
The PoT mechanism prevents sybil attacks and collusion by ensuring that even if a validator has a large stake (via PoL), they still need to demonstrate consistent performance to retain their influence. This creates a more secure system by rewarding real-world contributions (i.e., transaction validation) rather than just financial stake.
Slashing and PoT:
Validators with higher PoT scores face greater slashing penalties for malicious behavior. The more influence a validator has (due to their PoT score), the higher the risk of slashing they face if they attempt to cheat the system or validate incorrect blocks.
This mechanism ensures that validators with higher responsibility are held to stricter standards, creating a self-regulating system where only the most honest and efficient validators rise to the top.
Managing Network Load with PoT
While Axis Chain is designed to be a permissionless network, allowing validators to freely join, PoT serves as a gatekeeper to maintain efficiency when the system is overloaded. By limiting the number of active validators to only the top-performing nodes, Axis Chain ensures that the network remains lean and efficient, even during periods of high activity.
Validator Limitations:
When the network experiences high traffic or a large number of validators, only the top PoT-scoring validators will be selected to validate blocks and process transactions. This prevents the network from becoming bloated with underperforming nodes and keeps the system running efficiently.
Validators who do not rank highly enough based on their PoT scores may still participate in the network, but they will not be prioritized for block validation during times of high load.
Continuous Improvement:
PoT incentivizes validators to continuously improve their performance, as validators who fall behind in terms of PoT scores may be excluded from block validation in high-load scenarios.
This dynamic system encourages validators to stay competitive, ensuring that the network is secured by the most effective and reliable nodes.
Validator Rewards and Penalties
Validators are directly rewarded and penalized based on their PoT scores, which ensures that performance is tied to real-world outcomes, such as securing the network and processing transactions.
Higher PoT Scores Lead to Higher Returns:
Validators with high PoT scores are rewarded more generously, as they are selected more frequently to participate in block validation and enjoy a larger share of transaction fees and rewards.
Validators who maintain consistently high performance can compound their rewards, further incentivizing long-term engagement and active participation in securing the network.
Higher Slashing Penalties for Poor Performance:
Conversely, validators with high PoT scores who engage in malicious activities or fail to validate blocks correctly are subject to higher slashing penalties. The higher their PoT score, the greater the financial risk if they attempt to undermine the network.
This system creates a balanced incentive structure, where high-performing validators are rewarded but must also maintain their performance to avoid significant penalties.
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