An Update of Silicoin Staking

Updated: Nov 25, 2021

Silicoin is going to enter the next stage. There is a significant thing you should pay attention to is that Staking will be activated once Silicoin mainnet launches.

In the past few days, Silicoin finished the internal test about the staking part and then started its community’s testing, which was invited by email. We have received a range of feedback and found that there were still some problems with the staking formula that we must adjust.

The main logic of Staking is the same, but there are some small changes in the next staking formula. In other words, Individual Difficulty(D') = Difficulty(D) * Staking Factor(SF), the miners who stake SIT are still easier to win the blocks. So what are the changes of Staking formula that works on the Silicoin Network in the next staking version?

Well, now we set

SF = Staking Factor

D = Difficulty of Entire network

D' = Individual Difficulty

S = The amount of Staking 

N = Miner's space size(TiB), N>0, N = 1 TiB

When S≥N, SF = 0.5+1/ (S/N + 1)

When S<N, SF = 0.05+1/ (S/N + 0.05)

How to understand this updated formula?

First of all, the Individual Difficulty of every miner is equal to the Difficulty of the entire network multiplied by a Staking Factor. Individual Difficulty(D') = Difficulty(D) * Staking Factor(SF)

When S≥N, SF = 0.5+1/(S/N + 1). That is, The individual Difficulty is equal to the Difficulty of the entire network if the miner stake the amount of SIT same with his plots size(TiB) and the miner can significantly increase the probability to win the block if he stake the amount of SIT more than his plots size(TiB). But when S<N,SF = 0.05+1/(S/N + 0.05).So your individual difficulty will increase from 1 to near 20, according to the formula. 

Let's make an example.

If you have 100TiB and choose to mine with 400 SIT, your Staking Factor = 0.5+ 1 / (400/ 100 + 1)=0.7, which means that his individual Difficulty will drop a lot, and he gets more chances to win the new blocks.

If you have 100TiB and stake 100 SIT, your Staking Factor= 0.5+ 1 / (100/ 100 + 1)=1, so your individual difficulty is the same as the entire network's difficulty. 

If you have 100TiB and choose to mine with 50 SIT, your Staking Factor = 0.05+1/(50/100 + 0.05) = 1.87, so the chance to win blocks has drastically reduced.

That is to say, the miners need to buy or keep more SIT for staking so that their mining income will be higher if they want to obtain higher returns. Therefore, the staking function will stimulate the demand for SIT tokens because the Individual Difficulty of mining will significantly affect the revenue in the future. 

What's more, the more plots miners have, the greater the probability that they will be selected to produce blocks in the past. But everything has changed in Silicoin. If a big miner mines Silicoin without staking SIT, his chance to win blocks may be lower than the smaller miners who stake SIT more than the size of its plot. 

Take an example. If someone has 1000TiB and wants to obtain the same mining difficulty as normal, he needs to stake 1000 SIT to achieve this, which is equivalent to every miner with a strong SIT token demand, especially large miners. But for the small miners who have 100TiB, they only need to stake 100 SIT and can reach the normal difficulty.

In conclusion, we can forecast that the value of SIT will keep rising in the long term, and the price will increase steadily. In this economic logic, Silicoin finds the use case of SIT and avoids the monopoly of giants, and helps small miners increase their profits.

The staking system of Silicoin makes SIT tokens integrate into its table fully, long-term and safe ecosystem and form a complete economic circle. This is definitely far more attractive to miners than similar projects. It is enough to make Silicoin outstanding from many mining coins and become one of the best projects with the best community and ecosystem.