Guide to Cronos POS Chain

An introduction to Cronos POS Chain

Cronos POS Chain is the layer-zero network that guarantees the security of the Cronos ecosystem. It is the native issuer of the $CRO utility token, secured by a vast network of more than 100 nodes representing ~350 M US$ in staked value, in the top 3 of all Cosmos chains. The Cronos POS chain has securely validated around 33M transactions, with an average transaction fee of $0.00001.

Cronos POS is a public, open-source and permissionless blockchain - a fully decentralized network with high speed and low fees, designed to be a public good that helps drive mass adoption of blockchain technology through use cases like Payments and NFTs.

As a blockchain protocol built on the Cosmos SDK, Cronos POS chain is ideally placed to work with the broader Cosmos ecosystem and explore new potential use cases for its highly performant proof-of-stake consensus, utilizing Cosmos SDK modules like IBC, inter-chain accounts and inter-chain security.

Cronos POS has 100 active validators with a multi-year track record of reliably supporting proof-of-stake networks. It is used and supported by numerous partners including Alchemy, Coinbase, Crypto.com, and Ledger.

Cronos POS Chain’s first goal is to support Crypto.org Pay, the company’s mobile payment solution. Initially the protocol will only support CRO transfers.

What is CRO?

CRO is the native asset of Cronos POS; CRO will be staked by validators to help secure the network, paid as rewards for participating in consensus on the chain, and used for CRO transactions.

CRO is available on Cronos Chain as an ERC-20 token, as well as natively on Cronos POS chain as a CRC-20 token. Native CRO is required for Cronos POS Staking.

Cronos POS Chain is a proof-of-stake (PoS) blockchain network and users can stake via delegated-proof-of-stake (DPoS) consensus protocol, by delegating their CRO to a trusted validator. Native CRO is required for Cronos POS Chain Staking. Validators run nodes to validate transactions on the Cronos POS Chain network and in return earn block rewards in CRO, which are then distributed to the delegators after taking a validator commission. Cronos POS Chain Staking requires staking native CRO on Cronos POS Chain Mainnet instead of ERC-20 CRO on Ethereum network. Users are able to migrate between ERC-20 CRO and native CRO through bridges such as the Cronos Bridge Web App and the Crypto.com DeFi Desktop Wallet. For more details, users can check out the bridge documentation.

The Crypto.com team will encourage users to migrate to the new, native CRO token on Cronos POS Chain following mainnet launch. The CRO migration tool, along with Cronos POS Chain staking, will be available via the Crypto.com DeFi wallet.

How to participate on Cronos POS Chain

Cronos POS Chain uses a proof of stake consensus method as it is Tendermint-based. Participants in Cronos POS Chain can run a node and participate in the network as validators, or can delegate their CRO to an active validator, earning a portion of rewards in exchange for helping to secure the network.

There are two types of nodes in Cronos POS Chain – validator nodes and full nodes. Validator nodes are responsible for validating transactions and committing new blocks to the blockchain, while full nodes retrieve data from the blockchain and provide it to the validator node client. Participating as a validator requires operators to run a cluster which has both types of nodes plus their supporting infrastructure.

The active set of validators is made up of the top 100 validator nodes by total stake, including self-bonded stake and delegation (together known as “voting power”). There is no minimum self-bond to join the network as a validator.

Validators charge delegators a percentage commission of rewards earned in exchange for performing the work of validation; the distribution of rewards to delegators is executed on-chain, as with most Tendermint based protocols. Rewards are not automatically re-staked. There is no minimum delegation or warm up period; though there is a 28 day unbonding period during which delegators do not earn rewards. Delegators can change their choice of validator without having to unbond.

There are four key considerations to optimize one’s participation in Cronos POS Chain:

• Amount of self-bonded CRO:

  A higher amount of self-bonded CRO on a node shows other network participants that a validator is more liable for its own actions, an attractive attribute for delegators.

• Amount of delegated CRO:

  Inclusion in the active set is based on the total CRO staked to a validator, so nodes want to attract delegators in order to increase its overall voting power. Higher voting power not only increases the probability a validator will be awarded block slots, but it also signals the community trusts the validator.

• Commission rate :

  Validators charge delegators a commission on rewards in exchange for conducting the work of validation. Increasing or decreasing this commission can optimize for the gross amount of delegations and validator revenue.

• Track record:

  A validator’s track record is an important factor in a delegator’s decision to stake tokens to a particular node. This track record includes a validator’s uptime history, whether or not it has been subject to any slashing incidents, the age of the validator, and the validator’s governance participation history.

Rewards on Cronos POS Chain

There are two types of rewards on Cronos POS Chain:

• Block rewards are earned for conducting the work of validating transactions and committing new blocks to the blockchain.

• Transaction fee bonuses are paid if a validator includes more than 66% of precommits from other validators in the blocks they produce. The bonus is intended to incentivize better networking between validators as well as to reduce empty block proposals.

All rewards earned by a validator are subject to the protocol’s community tax fee. The tax fees are sent to a community pool, which can then be spent on community spend proposals approved using Cronos POS Chain’s on-chain governance apparatus.

Both validators and delegators have to manually collect rewards by submitting a withdrawal transaction on-chain.

The Cronos POS Chain explorer Source

Risks of participation on Cronos POS Chain

Cronos POS Chain includes slashing as a deterrent to prevent poor validator performance or malignant behavior. A validator’s self-bonded stake along with the funds staked by delegators are subject to slashing; the amount of CRO at risk of slashing is based on the total voting power of the validator.

All validators may survey the network for “misbehavior” by other validator nodes and submit evidence of slashable offenses to the protocol.

There are two main slashing conditions in effect on Cronos POS Chain:

• Double signing: when a validator signs two different blocks within the same consensus round, or when a validator signs a message that does not agree with the state of the chain. The penalty for double signing is the loss of a percentage of the total funds bonded on the validator, currently set at 0.05%. The validator will also be permanently removed from participating in the network, referred to within Cronos POS Chain as being “tombstoned.”

• Downtime: when a validator is non-responsive or cannot be reached for a predetermined period of time, currently set at 1000 out of 2000 consecutive blocks. The penalty for downtime is currently 0.0001% of the total funds bonded on the validator. The validator will also be removed from participating in the network for a period of time, currently set at one hour. The validator must then execute an un-jail transaction to rejoin the active set and resume participation in the network.

Governance on Cronos POS Chain

CRO holders can participate in Cronos POS Chain’s on-chain governance, with staked CRO serving as the voting mechanism. Using the Cronos POS Chain commands within the CLI, participants can submit a proposal along with an initial deposit, deposit tokens to fund an active proposal, and vote for an active proposal. Delegators inherit the vote of the validator they are delegated to unless they submit their own vote, which overrides their validator’s vote.

Governance within Cronos POS Chain takes place in three phases:

• Phase 0 — Submit period: Users can submit a governance proposal with an initial CRO deposit, which helps to reduce spam in submissions. Once the deposit is made, the proposal becomes active and enters Phase 1.

• Phase 1 – Deposit period: CRO holders can deposit CRO to show support for an active proposal. If the proposal reaches the deposit minimum it moves on to Phase 3. If not, it becomes inactive and all of the deposits are refunded.

• Phase 2 – Voting period: Once a governance proposal makes it to the voting period, staked CRO can be used to vote either yes, no, no with veto, or abstain.

Once the voting period has ended there are four outcomes which would lead to rejecting the proposal:

• No one votes, or everyone votes abstain

• Votes did not reach the quorum, meaning that less than 40% of staked CRO participated in the vote

• More than the veto threshold of voters vote “no with veto”

• More than the threshold of voters vote “no”

Otherwise, the proposal will be accepted and it will be implemented as part of the network’s software.

Why run Cronos POS Chain nodes with Coinbase Cloud?

Bison Trails provides the expertise needed for early adopters to participate in this growing network. Having supported Cronos Labs through the Crossfire testnet development and implementation, we are excited to support the mainnet launch of Cronos POS Chain with Participate Clusters, Query & Transact Clusters, and seed nodes.

• Participate: A Participate Cluster with Coinbase Cloud for Cronos POS Chain includes a validator node along with its accompanying full nodes and supporting infrastructure. During cluster creation, you can choose your preferred cloud provider and region; every cluster is supported by a resilient multi-cloud recovery system to ensure maximum uptime.

• Delegate: Those who do not have enough CRO to run their own node can stake to community validators, using the staking feature of the Crypto.com DeFi Wallet.

• Query & Transact: Coinbase Cloud will also offer Query & Transact read/write infrastructure on the Cronos POS Chain to enable companies and developers to build Web 3.0 applications.

Coinbase Cloud operated the Seed Node Program for Cronos POS Chain’s initial stages, operating the “chatty” nodes that provide nodes coming online with a list of peers to connect to in order to help ensure stability in the network’s first year of mainnet operation.

This program was proposed by Coinbase Cloud to ensure a smooth experience for the existing community of node operators as well as for new stakeholders onboarding post-mainnet launch, while supporting the chain’s decentralization and security.

Coinbase Cloud has deep technical knowledge of the Cronos POS Chain, having been active participants on the Crossfire testnet and supporting mainnet launch. We provide secure, reliable validator node infrastructure to Cronos POS Chain to help optimize validation and governance participation.

Bison Trails also supports a number of protocols besides Cronos POS Chain that are built on the Tendermint consensus engine.

Benefits

• Optimize participation: Our Protocol Operations team monitors the changing state of Cronos POSChain’s validators and protocol updates, regularly offering information to help inform validators of the decisions to optimize their participation.

• Performance: Sign transaction blocks with low latency and high throughput with robust infrastructure.

• Ease of use: Participate as a validator in Cronos POS Chain without requiring deep engineering, protocol, dev-ops, or security knowledge.