FAQ

In the FaxChain system, anyone who runs a mining program on specialized hardware known as a validator. Validators are responsible for producing new blocks and processing the transactions for the network.

As different validators will receive different data at different times, the network needs a agreement of adding information to blockchain (producing blocks). This agreement of cooperation between validators is invented as consensus mechanism.

Different teams have attempted various solutions on how to reach consensus in a fast and cost-efficient manner. FaxChain network adopts Delegated-Proof-of-Stake (DPoS) consensus mechanism. Every validator on the network has an opportunity to participate in consensus by casting votes, for which validators are elected to produce the blocks during a period of time, thereby confirming any valid transactions contained in those particular blocks.

However, not all validator’s votes are weighted equally, the more votes validator has, the more likely that validator becomes the block producer (Supernode). On the FaxChain network, only the 23 top-ranking validators will become the Supernodes, the rest are standby validators (Standardnode).

Delegating is the process of staking tokens and voting to validators, by which FAX token-holders assign their tokens to a particular validator or validators , delegation of tokens also entitles the staking account to vote for validators. Votes determine which Supernodes are scheduled to produce blocks, and therefore are a critical component of the delegated-proof-of-stake consensus mechanism that secures the FaxChain network.

Delegating your tokens to a validator does NOT give the validator ownership or control over your tokens. At all times, you still control all your staked tokens that you may have chosen to delegate, delegated tokens can be withdrawn at any time and are returned as balances to the staking account after twenty-one days.

In an open source and decentralized network, anyone can run a validator if they choose. A malicious validator or other bad actor could attempt to attack the network or to submit incorrect or fraudulent transactions for their own gain. Because of the DPOS consensus mechanism described above, a single entity acting alone in this fraudulent manner would need to attract some amount of votes before any of their proposed activities would be weighed in the consensus vote.

As more token-holders choose to delegate their FAX tokens to different validators across the network, and the total votes on the network increases, it becomes increasingly difficult for even a coordinated and well-funded attacker to amass enough votes to single-handedly alter the outcome of a consensus vote for their own benefit.

As a result, the more stake that is delegated to many different validators across the network, the more safe and secure the network becomes for the whole system.

Additionally, token-holders who choose to delegate their tokens and help secure the network, are eligible to receive staking rewards once they have delegated their tokens to one or more validators. More details on staking rewards are found below.

On many DPOS networks, there exists a mechanism known as “slashing”. Slashing is any process by which some portion of stake delegated to a validator is destroyed as a punitive measure for malicious actions undertaken by the validator.

This mechanism incentivizes validators not to undertake such actions, as less stake delegated to a validator means that validator then accrues fewer rewards. Being slashed can also be seen as a reputational risk for retaining current or attracting potential future stake.

Slashing also poses a risk to token-holders who could potentially lose some of their tokens if they have delegated to a validator which gets slashed. The presence of slashing could incentivize token-holders to only delegate their tokens to validators they feel are reputable, and not to delegate all their tokens to a single or small number of validators.

On FaxChain system, slashing is not automatic. If an attacker causes the network to halt, they can be slashed upon network restart. For more information, please check out our docs.

Anyone who holds FAX can delegate their tokens at any time.

To delegate FAX tokens, you must use a wallet that supports delegation. FaxWallet is one user-friendly wallet that supports staking or use a stake-supporting wallet via faxvote.org.

FAX tokens in your wallet must first be locked up (staked) and voted to your trusted validator, and you can delegate as many FAX as you like, as a return, you are eligible to earn staking rewards.

Users can manage their delegation account on FaxVote, by which user can find out the current status, withdraw the rewards and terminate the delegation.

To run a validator, there is a minimum-self-delegation requirement, by which validators will not be eligible to receive any rewards. All validators are required 500 FAX staked as minimum-self-delegation, except for those potential supernodes are required 1000 FAX staked.