What is a Staked Seed Node (SSN)?

SSNs aim to offer public access points to the Zilliqa network while also providing an opportunity for ZIL holders to earn rewards through staking.

What is a Staked Seed Node (SSN)?

The Zilliqa network is composed of several types of nodes interacting with each other to deliver a secure, high-throughput platform for blockchain applications.

Each of these nodes performs specialised services crucial to the optimal functioning of the network, such as Directory Service (DS) and shard nodes, which are responsible for mining blocks on the network and participating in the consensus model that underpins the blockchain’s security.

The Zilliqa network also features lookup nodes, which receive transactions and dispatch them to the DS and shard nodes for mining.

In addition to these, the Zilliqa network also features seed nodes, which play a supporting yet critical role in the blockchain’s architecture.  The main role of seed nodes is to serve as direct access points to the core Zilliqa network.

Seed nodes are full nodes which are responsible for serving API requests to users. They consolidate transaction requests and forward them to the lookup nodes, after which those transactions will be sent to the DS Committee and mined into blocks.

While these nodes are capable of serving requests to users and storing a full public history of the distributed ledger, there is no built-in incentive for these nodes to provide these services through a public API.

That is where Staked Seed Nodes (SSNs) come in. First introduced to the Zilliqa network in ZIP-3, SSNs aim to offer public access points to the Zilliqa network while also providing an opportunity for ZIL holders to earn rewards through staking.

Let’s take a closer look at what a Staked Seed Node is and how it works below.

What is a Staked Seed Node (SSN) and how does it work?

A Staked Seed Node is a type of seed node, meaning that it serves API requests to users and forwards transactions to lookup nodes on the Zilliqa network.

In addition to this, however, an SSN also stores a public history of all transactions on the Zilliqa network, offering an accessible and decentralised record of truth against which transactions can be verified.

SSNs can also offer a direct access point to the Zilliqa network through a public and open API. This allows developers and users to easily interact with the blockchain without having to run their own seed node.

In return for offering these services, SSNs earn a share of block rewards as long as they are active on the network.

A Staked Seed Node must stake a minimum of 10 million ZIL into the necessary smart contract to be eligible for block rewards, ensuring that the operator is committed to providing services to the network.

Additionally, a Verifier continually checks whether the SSN has the required amount of ZIL staked and is providing satisfactory services. If these requirements are met, then the SSN is rewarded with a percentage of the total block rewards.

SSN operators can withdraw their stake at any point, after which they will be deregistered from the list of SSNs and will no longer be eligible for rewards.

In addition to their utility for builders and applications on the Zilliqa network, SSNs also offer end-users and ZIL holders a way to share in the rewards they earn through delegation.

Earning staking rewards as a ZIL holder

As end-users, ZIL holders are also able to share in the rewards for decentralising the Zilliqa network by delegating their ZIL to be staked through the SSN of their choice.

Any ZIL holder can delegate their tokens to a Staked Seed Node and earn a share of the block rewards earned by the SSN. The more tokens a user delegates, the greater the proportion of the rewards they receive.

To get started with staking, ZIL holders can simply open a staking platform such as Zillion and sign in by connecting their Zilliqa wallet.

Once your wallet is connected, you are able to select which SSN you would like to stake through. Each SSN operator will charge a small commission fee on the rewards earned for this delegation service.

At this point, all that is left to do is to specify the amount of ZIL you would like to stake and start earning a share of the rewards accrued by the SSN you have chosen. You are free to switch SSN or withdraw your stake at any time, although there is a minimum lock-up or “bonding” period of roughly 14 days depending on block production rates to incentivise long-term holders to stake ZIL and play a role in supporting the network.

Staking ZIL is a great way to put your ZIL to use and earn rewards while contributing to the network, allowing you to benefit from the work done by SSNs to provide services on the blockchain.

Hybrid consensus and the road to Zilliqa 2.0

It is important to note that the SSN staking process differs from Proof-of-Stake (PoS), as SSNs currently do not play an active role in the consensus mechanism of the Zilliqa network, serving instead as a supporting but crucial component of the blockchain infrastructure.

However, as the Zilliqa network is continually improved ahead of the migration to Zilliqa 2.0, the implementation of Proof-of-Stake consensus is firmly cemented in the network’s roadmap and SSNs will play an increasingly important role in network security as we migrate to a more efficient and flexible network.

A new proposal was recently published for discussion on the Zilliqa Governance Forum which would see SSNs integrated in a hybrid consensus model alongside the existing Proof-of-Work (PoW) mining nodes. It is proposed that this integration be voluntary at first, after which it would become mandatory as the hybrid consensus mechanism becomes robust and widely implemented.

Proof-of-Stake is one of many landmark changes coming in Zilliqa 2.0 that will greatly improve the usability and flexibility of the network.

We hope these changes will allow Zilliqa 2.0 to deliver a flourishing network that offers reduced CO2 emissions, increased security, an improved long-term outlook for ZIL thanks to zero inflation, and reduced costs for running a node on Zilliqa.

For more information on what to expect from Zilliqa 2.0, read our full interview with Zilliqa CTO Richard Watts.