❓Frequently Asked Questions
What is Coaction?
Coaction Network is a decentralized validator tokenization protocol that incentivizes delegators to stake their assets to Coaction nodes via the issuance of the Coaction Infrastructure Token (CIT). Coaction enables validators to differentiate themselves by creating a union of validators from different blockchains and operators. Furthermore, Coaction incentivizes collaboration among validators by offering their delegates stakeholdership of a diversified staking ecosystem with CIT.
Why Coaction?
When delegators (i) stake their assets to validators that partner with Coaction Network and (ii) generate commission revenue for the Treasury - they are issued CIT proportional to their share of network revenue. CIT can then either be burned for boosted staking rewards or held and staked on Coaction’s app-chain validator nodes to receive additional CIT in the form of inflation and a CIT buyback mechanism from net commission revenue. Delegators on the Coaction Network become stakeholders and share in the network’s growth & success, a novel concept within the Web 3 staking world.
How does the Coaction Network protocol help improve the decentralization of validators?
Coaction Network aims to improve the decentralization of validators in a cryptocurrency project's ecosystem. As it currently stands, the validator ecosystem is highly centralized, with the top validators holding the most stake, earning the most rewards, and having the most power. Existing solutions have proven ineffective because they lack incentives for delegators to choose smaller validators.
Coaction Network solves this issue by adding a secondary token overlay to any validator within their system. This creates an added benefit for delegators who stake tokens with validators in Coaction Network’s infrastructure. These tokens, known as Coaction Infrastructure Token ("CIT"), can be burned for rebates on fee commissions charged by validators. This boosts a delegator's reward yield or can be held by delegators, hoping that the Protocol’s ecosystem grows. By incentivizing delegators to support smaller validators, Coaction Network will pull delegated tokens from the top validators downward on the leaderboard, increasing the delegated stake of validators at the bottom. Over time, this will shrink the centralization gap within validator sets and lead to improved decentralization.
Why would a validator join Coaction Network’s protocol?
Validators who are struggling to attract delegated stake may join Coaction Network to enjoy the benefits of increased stakes and profits from the Protocol's incentive mechanisms. Coaction Network offers an added benefit to delegators who stake tokens to validators within their network in the form of a secondary token overlay (CIT). This mechanism attracts more delegated stake to validators on the bottom of the leaderboards, ultimately shrinking the centralization gap within validator sets and improving decentralization.
Validators that join Coaction Network could receive more delegated stake as a result of Coaction Network’s incentive mechanisms. While they may have to give up a portion of commissions to attract more delegated stake, the increase in profits can make it economically rational to do so. Joining Coaction Network also allows validators to be part of a growing validator ecosystem that is committed to maintaining decentralization as a fundamental pillar of crypto. A breakdown of the benefits of joining Coaction Network’s protocol are as follows:
Incentivized Delegation: Delegators will be incentivized to stake tokens with validators that partner with Coaction Network because they will receive CIT rewards on top of native rewards.
Incentivized Validation: Our model provides an extra revenue stream to Coaction Network’s validator partners as 10% of the calculated CIT rewards from their delegated stake will be awarded to the validator.
Competitive Advantage: CIT’s unique boosted staking reward rebate mechanism allows validators to offer their delegators higher APR’s than competitors by undercutting protocol-minimum validator commission rates.
Business Growth: Partnerships can increase the number of customers and delegated stake, as validators will be able to offer delegators a unique value proposition, driving business growth.
Increased Profitability: By boosting the number of delegators to validators leveraging the Coaction Network, the profitability of the network as a whole is enhanced, which in turn boosts the value of CIT rewards for both validators and delegators.
How do participants use Coaction Network?
As a delegator: From a staking of tokens standpoint, it will work very similarly either to staking through a project’s explorer or staking through platforms like Keplr. To use Coaction Network for delegating tokens, follow these simple steps:
Navigate to Coaction's app and connect your wallet.
Select the project you want to stake your tokens to and delegate them.
Note: Coaction Network does not stake tokens on behalf of delegators. Tokens are staked directly to the project's protocol.
Rewards claiming, withdrawals, and other operations will work the same as if you were staking directly. You will hold your own native tokens in your wallet, and they will be subject to the project’s specific rules,
While staking and earning rewards in the native asset of the project, CIT will also accrue to your account. At specified intervals, Coaction Network will pay out a calculated amount of CIT to delegators, which can be claimed. Delegators can then burn CIT to reduce the effective commission fee charged by validators for future periods. The amount of CIT burned will determine the size of the fee discount received. These extra native rewards are Boosted Staking Rewards.
As a small validator: Small validators who leverage Coaction Network will determine a percentage of commissions they are willing to forgo to be able to leverage Coaction Network’s incentive mechanism to gain delegated stake.
What can the points earned during the Testnet development phase be used for?
While the Testnet is being developed, points are earned by delegators for participating in the testing and development of the Coaction Network. These points will be used to determine the airdrop amount that supporters (delegators) will receive once the protocol goes live.
How does Coaction use the Cosmos SDK?
Coaction will use standard Cosmos SDK modules to implement basic blockchain functionality and create a decentralized network of tokenized validators. See Tech Stack for more details.
What are Coaction’s official links?
Where can I find the Litepaper for Coaction Network?
Check out the Litepaper here!
What does it mean to be a Cosmos native chain?
When a blockchain is Cosmos-native, it means that it was built using the Cosmos SDK, the blockchain framework for modularity, interoperability, and sovereignty. The Cosmos SDK allows developers to build custom Application Specific Blockchains by leveraging pre-existing modules. Cosmos SDK is the cutting-edge technology for blockchains' interoperability and modularity.
What is IBC?
The Inter Blockchain Communication Protocol (IBC) is an open-source protocol that allows for data transport and authentication between blockchains. IBC allows blockchains to interact with each other by relaying IBC messages, enabling cross-chain communication. This is an essential piece to achieve the Web3 vision, allowing users to frictionlessly interact with different ecosystems. IBC allows you not only to import tokens from one chain to another but also to leverage the specific advantages of each chain by enabling cross-chain logic.
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