What is baking ?
In this module, we will see how baking works for the Mavryk blockchain. More precisely, we will see the different actors involved, from creating new blocks to their validation. We will then see the associated reward system, and how to deploy your own baker. Finally, we will present a list of existing bakers and the criteria to evaluate them.
What is baking?
To achieve its consensus, Mavryk uses Liquid Proof of Stake (LPoS). That is to say that the validators/bakers of the network temporarily lock a part of their tokens (which they cannot use anymore) to obtain the right to create a block. The creator of the next block is called the baker and is chosen randomly among all the candidates, based on the number of tokens locked. In exchange for his work, the baker receives a reward in Mav.
What is delegating?
If a Mav holder does not have 6,000ṁ or does not want to set up a computing infrastructure to bake blocks, they may delegate their coins to a baker. Delegating lets coin holders (i.e. delegators) "lend" their coins to a baker (i.e. a delegate), giving the baker a higher probability of being selected to bake and attest blocks. In turn, bakers share the additional revenue generated from the delegated tokens with the delegators, in proportion to their participation. Note that this process does not transfer ownership of coins. Hence bakers cannot spend or control the Mav delegated to them, ensuring that bakers cannot appropriate the delegator funds.
With LPoS the number of bakers is unlimited (everyone can participate), and delegation is optional.
In Mavryk, we call participants in the block validation process delegates. Each delegate can create, sign and attest blocks.
Baking and attestation rights are attributed at random, several cycles in advance. To deter dishonest behavior (e.g. double baking or double attestation), each delegate must place a fixed quantity of Mav as a security deposit for a limited time (five cycles), which will be confiscated if they attempt to compromise the chain.
Prospective bakers must meet the following requirements:
- Server available round the clock and stable internet connection
- At least 8GB of RAM
- SSD disk (preferably with more than 100GB storage)
- At least 6,000ṁ as a staking balance (own funds + delegated balance)
The more Mav a baker holds in his staking balance, the higher his chances to bake blocks and earn baking rewards.
Liquid Proof-of-Stake and delegation
On Mavryk, baking rights are attributed randomly but proportionally to the staking balance. A Mav holder may:
become a baker if they possess at least 6,000ṁ in their own funds or by delegation
delegate their Mav to a baker, to participate in the consensus
In practice, certain bakers may pass on some of the rewards they receive to the individuals who delegated their Mav to them. This distribution may encourage others to delegate their Mav, thereby increasing the delegated balance of these bakers and so their staking balance, i.e. their chance of baking/attesting.
Liquid Proof-of-Stake (LPoS) provides the option for a Mav holder to retain ownership of their funds while delegating their associated (voting, baking) rights to a baker. This principle differs from the delegated Proof- of-Stake (DPoS) of other blockchains, in which participants vote for a restricted number of block validators.