Network Validators: Earn Dragons by Participating in Dragon Net Consensus

Where do I begin?

We recommend continuing to read below first if unfamiliar with the process. To sign up for an account to validate blocks and earn Dragons now, click HERE

Dragonchain’s Architecture: A Spectrum of Trust

A transaction occurs at a business’ and/or developer’s private Level 1 Dragonchain node. Instantly this node owner can be sure the transaction occurred and is valid (assuming the owner trusts their own data/logic), but what if this validity needs to be proven to an outside party shortly after, or at a later date? Here is where Dragon Net comes in to play. Level 2-5 Dragonchain nodes provide greater and greater certainty that an event has occurred, eventually broadcasting an artifact of the original transaction on a public network such as Bitcoin and Ethereum at Level 5, leveraging the hashpower backing the immutability of the Interchained networks. It can be proven at a later date by the business that a transaction did in fact occur and is unaltered, with certainty equal to the dollar power of hash and stake power entering these networks in the TIME since the transaction occurred. Let us step through each of the 5 levels in greater detail:

Level 1 (NOT a validator node):

This is the enterprise or business’ own ledger, and the location for placement and integration of “real world” value in the form of transactions, smart contracts, databases, and programmed logic. This information is configured by the business or blockchain user and executed by the Level 1 Dragonchain node. These may be run/managed on user’s own hardware or through cloud services.

Level 2:

Level 2 nodes are a trusted check of validity for blocks and individual transactions, performed without exposing the actual private Level 1 data. Requirements for L2 Node consensus are defined at the enterprise level (L1). Verified elements:

  • Block (verification record) construction and signature
  • Individual transaction signatures
  • Individual transaction header elements (all required header fields are present)

A Level 2 block assembles a new verification record containing:

  • A list of valid transactions and a list of invalid transactions, thereby ‘voting’ on the validity of individual transactions
  • The hash of the prior Level 2 block created (thus creating a Level 2 blockchain)
  • The hash of the Level 1 block validated (thus providing a second dimension to the blockchain)
  • Proof of owner identity information
  • Proof of deploy location (data center)
  • Proof of key management authority information

By default, three unique Level 2 nodes must validate any given transaction/block

Level 3:

Level 3 nodes check the diversity of a transaction’s Level 2 verifications. This level of consensus ensures that transactions are validated by a sufficiently varied set of distributed sources. It also provides control and measurement of network effect and provides distributed security, as an attacker would need to attack multiple organizations and data centers in order to tamper with transactions. Level 3 Nodes validate the following criteria:

  • The count of Level 2 verification records received
  • That those records have come from a sufficient count (configurable) of unique business units
  • That those records have come from a sufficient count (configurable) of unique deployment locations
  • That those records have come from a sufficient count (configurable) of unique key management authorities

A Level 3 Node assembles a new verification record containing:

  • Remnants of criteria met (Level 2 verification record count, set of business units, set of data centers, etc.)
  • The hash of the prior Level 3 block (thus creating a Level 3 blockchain)
  • The hash of the Level 2 blocks which passed the criteria (thus providing a second dimension to the blockchain)

Level 4:

A level 4 node provides a notary functionality to the consensus process. Hosted by an external partner, a Level 4 node cryptographically signs any verification record it receives from Level 3. This function allows the Level 4 node to act as an independent witness to Level 3 verifications.

Level 5:

Level 5 nodes serve as the gateway between the Dragonchain platform and public blockchains. When a transaction passes through a Level 5 verification, it is hashed on a public chain like ETH, ETC, BNB, NEO, BTC, etc.

How is the Transaction Fee Split?

Every transaction produced by a Level 1 business/enterprise node costs the owner a certain amount in Dragons to have validated by Dragon Net. This fee varies greatly depending on either the TIME applied by the owner to the L1, or depending on the commercial package purchased. A quick reminder, TIME is the metric on the Dragonchain platform used to convey a Dragon holder’s ‘loyalty’, and the trust granted to the holder to act through good intentions. TIME is calculated by the number of Dragons held, multiplied by the number of days each Dragon is held. The more TIME an L1 owner applies, the smaller their transaction fee. It can range anywhere from $0.50 to $0.0001 (in Dragons) per transaction.

Now remember there are six validator nodes required to validate each transaction; three L2s, one L3, one L4, and one L5. Let us consider a simple case where all six nodes validating some L1 block have a TIME of one (1). In this case, the total sum of the TIME applied by ALL validator nodes is six (6) TIME. After a transaction is validated, all six nodes helping to validate a block will earn exactly 1/6th of the fee paid for the transaction by the L1. Now a slightly more complex example: Imagine the same scenario, except now one of the L2s has a TIME of two (2). Now the sum of all TIME by validating nodes is 7. Every node, except for the one with 2 TIME applied, will earn 1/7th of the fee. The L2 with 2 TIME applied will earn 2/7ths. The same would be the case if instead the 2 TIME had been applied by the L3, the L4, or the L5.

Every node on some given level has the exact same probability of being chosen to validate a block as the others on that level, regardless of its TIME. If there are 100 L3s, 100 L4s, and 100 L5s, every node will have a 1% probability of selection for a block. If there are 100 L2s, every L2 will have a ~3% probability of selection, since 3 L2s validate each block.

Current Availability of Validator Nodes, Further Resources

Eventually more validator node levels are planned to be open sourced, that is, anyone will be able to run higher levels on their own hardware or their own preferred cloud services (unmanaged). Currently, Level 2 nodes may be run unmanaged

  • To examine Dragon Net metrics, visit HERE
  • To learn the process of setting up your own unmanaged L2 validating node, see this blog and process, created and detailed by some of our wonderful community members
  • To create an account and begin validating, visit HERE