COT Token & Validators
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# COT (Cyclone Owner Token) & Validator license
Validator license is a license to operate as a validator node in our blockchain network. This license will enable you to participate in the consensus process and validate transactions on the network. In return for your participation, validators will earn rewards in the form of native CYCL coin, which you can hold or sell on cryptocurrency exchanges.
The number of Licenses at the Mainnet Launch is: 40.
Each License is divided into 10,000 of a part ownership #COT (Cyclone Owner Token)
COT confirms your ownership of a part of the validator license and consequently, a share of the profits from all transactions in the network. COT can be compared to company shares, as it yields dividends and can be traded on exchanges. As the network grows and demand for validators increases, the СOT value rises. This means that COT is a valuable and highly speculative asset of the Cyclone network. The supply of COT does not increase over time, and owning it means a steady profit from all network transaction fees. As the network transaction volume grows, this asset consistently appreciates in value, and you can manage it as you see fit.
Each #COT additionally contains 150 CYCL (the network's native coins).
+ 50 CYCL will be locked for up to 90 days from the mainnet launch date.
After 90 days from the mainnet launch, the locked CYCL coins will be unlocked monthly.
The final unlock of CYCL coins for COT token holders will occur in the 18th month of the network's mainnet operation.
The unlock schedule for CYCL coins for COT holders:
From the 3rd to the 13th month of the mainnet, 5% of all locked CYCL coins will be unlocked monthly.
From the 13th to the 18th month of the mainnet, 10% of all locked CYCL coins will be unlocked monthly.
+ 100 CYCL additional will be allocated with each COT token for the holder. These coins serve as a reserve to support the network's economic model and will be locked, unavailable for withdrawal or sale.
! Accordingly, if more than one COT token is acquired, the number of locked and reserved CYCL coins increases proportionally to the number of COT tokens purchased.
Nods (licenses) management:
Holders of 10,000 COT have the option to delegate the management of their License to the Foundation Team or to take control of the Validation Node themselves. A collective of holders with a total of 10,000 COT can self-organize into a DAO and have the same rights and options as an individual holder.
Role of Nodes in the Network
Nodes in the Cyclone network play crucial roles in maintaining the integrity and functionality of the blockchain. Any wallet within the network has the opportunity to become a validator, participating in the Consensus protocol. To become a validator, a wallet must execute a special transaction that grants it a "validator license" and burns a specific amount of native CYCL coins from its balance.
This validator license can be transferred or sold to other wallets within the network, enabling them to participate in consensus and sign consensus messages. In return for their participation, validators receive a portion of the overall emission of native coins. It's noteworthy that the emission can be either positive or negative (i.e., burning of coins). Validators who fail to engage in consensus forfeit their share of positive emissions.
Emission Calculation and Validator Economics
The amount of emission and the price of validator licenses are dynamic and depend on the economic conditions of the network. These values are recalculated every ninth block, which serves as a special block solely dedicated to emission calculations, license redistribution, and allocation of new emissions to validators. More information about cyclone emission model you can find here: Dynamic Emission Model
Information about ninth block format > Technical Specification of Formatsin the Cyclone Blockchain.​
Negative Balance and Validator Accountability
In the case of negative emissions (i.e., burning of coins), validators may incur a negative balance. A sustained negative balance for 27 blocks results in the automatic annulment of the validator license for the respective wallet. This mechanism ensures that validators remain accountable and actively participate in the consensus process to maintain the stability of the network. Overall, Cyclone's technological architecture blends the security of BFT with the efficiency and familiarity of Bitcoin's network, creating a robust foundation for decentralized consensus and secure transactions.
How Do I Become an Validator in Future?
After the Mainnet launch, any wallet (computer) can become a validator in the network by burning a sufficient amount of native #CYCL coin to obtain a validator license. The amount of native cryptocurrency required to burn for obtaining a validator license is dynamically calculated and depends on the emission and the number of validators at the moment.
If you'd like to become early and first validators of the Cyclone network, please reach out to the team.
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