Verso network validators – what are they and why do they matter

If you have a broad idea of how a blockchain works, the concept of validators should not be hard to grasp.

Validators are participants of the blockchain network that ensure that the network’s protocols are being followed before confirming a transaction or settling it as final. Validators to the Verso network are what staking nodes or Masternodes are, across other different blockchains.

To lend their (computing) resources to the network, the network must provide some sort of incentive to its participants. This is where blockchain tokens play a role. Blockchain-enabled tokens bring new dynamics in the process of platform development by incentivizing early participants with a potential financial gain and therefore overcome this “chicken-and-egg” problem.

The Verso Token (VSO) is used for granting access to the platform and is also used for the marketing, placement, and conversion of products. The products are based on legal regulatory relationships between the financial service providers directly with the consumers, so they are settled in USDC to allow for stability over the period of the product contract.

Validators ensure that compliant products are made available and that those products are only displayed to appropriate consumers. They will also set up the related product smart contracts, and power any required transaction signing. Validators may also have a role in generating new VSO in the future.

Now that we understood how to incentivize the desired behavior on a decentralised network, let’s see how validation works on the Verso network:

  • Product validation involves a staking pool where validators deposit a fixed minimum amount of VSO tokens, which could then be used as collateral in the event of malicious behavior.
  • A validator pool forms part of the product and campaign registration smart contract. Once the campaign has been registered and a deposit in VSO tokens is made, a timer is set to a fixed time interval to allow all the validation pool participants to cast their regulatory votes.
  • Once a consensus (80% of the voters) has been reached, the campaign is validated, and made available to be fetched by wallet providers.
  • Every validator vote has the same value. All validators are equal in this process. The validation bonus relating to the campaign in question is shared between participating validators. The validation bonus appropriated to an incorrect validation will be burned along with an equal amount from the validators’ staked VSO collateral.

Voting and participation in the validator pool are done through the Verso Portal.

To become a product validator and earn VSO rewards, a certain amount of work is required to be performed. To become a validator it is also necessary to stake 1 million VSO tokens (at the initial public sale price of $0.05 that is $50,000 worth of tokens as collateral).

Each quorum member must have a set minimum number of staked tokens, and their votes are equal. This will even out the voting power for validation, unlike the governance staking where more tokens equal more voting power.

Once a product has been entered into the smart contract a voting round is started allowing the participants a fixed time to approve or reject the submitted product. Depending on the outcome of the vote, a product is approved and available for distribution. If the product is rejected, the VSO tokens deposited for the “Fetch and Conversion”- bonuses are returned to the Financial Institution. In either case, the validators are rewarded with VSO tokens for performing the voting and regulatory checks. It is important to note that in case of illicit behavior of one of the validators, his validator bonus is burned along with an equal amount from his staked collateral. In case the collateral falls below the 1 million VSO mark, it needs to be topped up again before performing additional validations.

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