Nodes and Tokenomics
Run your own node and become part of the Symbol token ecosystem
The Symbol public chain is a self-sustaining economic ecosystem involving node operators, harvesters, investors, users, and the XYM token. In this way, it’s similar to many decentralized blockchains, but there are important differences that make it easier for anyone to earn rewards. Here are the basics of the system.
- Initial Supply: 7,842,928,625 XYM
- Maximum Supply: 8,999,999,999 XYM
- Inflation Rate: Pegged to bitcoin inflation
- Harvesters earn rewards just by holding a token balance.
- Harvesters earn greater rewards by running nodes.
XYM Supply and Inflation
XYM has a fixed maximum supply of 8,999,999,999 tokens. On release, initial supply was 7,842,928,625 tokens, allocated to users based on XEM holding at Snapshot. Another 1,157, 071,374 XYM was created for inflationary rewards over time. The inflation rate is closely mapped to that of bitcoin, extending out over the next 100 years. Similar to mining rewards, Symbol’s rewards will be released to each block creator but based on a POS+ (Proof of Stake+) system.
Proof of Stake+
POS+ lets nodes create blocks based on their XYM stakes, which are holdings. Symbol uses the term harvesting instead of mining. The more tokens held by a node operator, the higher the chances of creating the next block and earning harvesting rewards. POS is a well-known system in the blockchain industry, but Symbol adds some improvements. POS+ calculates a score for each node operator based on the size of their stake AND other factors, such as recent network activity and the stakes that other users may delegate to them (see Delegated Harvesting below.) In this way, POS+ attempts to incentivize usage, competition for low fees, and other desirable behavior. You can read details on how POS+ is calculated in the Symbol whitepaper.
Node operators all over the world keep the Symbol protocol robust and decentralized. For keeping the system running, node owners earn rewards from four sources.
- First, they earn transaction fees based on their own XYM stakes.
- Second, they earn inflationary rewards, which are added to the transaction fees. Together these are called block rewards.
- Third, they draw bonuses from a limited reserve left over from earlier rewards programs. This limited reserve will phase out over six years.
- Fourth, they keep a percentage of block rewards earned by delegated harvesters. Delegated harvesters are users who don’t run any nodes, but still earn rewards by sharing the earning power of their stake with a node operator. The more delegated harvesters use your node, the more you earn.
Node operators can set up their nodes locally or on cloud services. For details on how to set up a node, refer to the developer documentation.
Since Symbol’s blocks are confirmed several times per minute, rewards are frequent. Block rewards consist of inflation rewards and transaction fees. The chances of earning a block reward are based mainly on the operator’s XYM stake, as well as other factors like network activity. Both node operators and anyone else with a XYM wallet can earn block rewards.
The higher an account’s XYM balance, the higher the chance of it earning a block reward. Even those who don’t run a node can earn block rewards by delegating their stake to a node.
XYM owners who don’t operate nodes can also earn block rewards by delegating their stake to a node. Holders who delegate their stake retain full ownership of their coins and never expose their private keys. No funds have ever been lost from delegated harvesting. When delegated harvesters earn a block reward, the node operator who processed it earns 25% and the delegated harvester earns 75%. In this way, a node operator can greatly increase their earned rewards, and all holders can participate in rewards whether or not they run a node.
Node operators can set their own minimum fees for which they wish to process transactions. The lower the fees accepted, the more transactions they will be able to process. Generous node operators may even choose to process transactions for free if they wish. This creates competition among node operators.
Node Bonus Program
In order to incentivize stability in the number of nodes and circulating supply after launch, bonus rewards will be paid to node operators who maintain nodes with minimum balances of 1 million, 2 million, or 3 million XYM, with higher bonus rates for each tier. These rewards will draw from a fixed pool of reserves and gradually ramp down over six years.
Total Node Income
To summarize, node operators will earn income from block rewards (inflation + transaction fees) based on their own stakes and a 25% share of delegated stake block rewards. Estimates place these combined node rewards at approximately 5% or 6% for the first year, though this is not guaranteed. Operators can also earn bonuses for maintaining minimum stakes of over 1 million XYM.
Symbol’s inflation is mapped to bitcoin’s inflation with one difference. Bitcoin halves its rewards every four years. Symbol also drops its reward rate by half every four years, but instead of a single big drop, these reductions are spaced out to occur every quarter. This gives the same overall inflation as bitcoin, but with a more gradual decline.
The Symbol Core Team will hold approximately 22% of XYM supply for funding future development, marketing, and partner projects. Historically, Core Team funds have not been used for harvesting and there are no plans to begin, meaning more block rewards available for other harvesters.
The Node Explorer shows the number, names, locations and other information of active nodes. You can also find links to faucets and other community resources. Note that the Explorer will point to the Symbol testnet until public chain release.