It is essential for users to stake their PoS tokens with dependable and highly performant validators, which is why we have rolled out our Staking Rewards Verified Staking Provider (VSP) Program in June 2022. Through this program, we thoroughly scrutinize potential validators, evaluating factors such as security measures, their on-chain reliability, their provider setup, and value-added services for the whole ecosystem.

Our VSP documentation contains further details about the program, Staking Providers that are part of the VSP will have a blue checkmark displayed next to their names here. Once the mainnet launches, we will outline specific metrics to look at when choosing Autonity validators.

The Staking Rewards on ATN consist of:

On-chain Activity Rewards: On-chain Activity rewards consist of on-chain fees that users of the Autonity chain pay to make transactions: the Base fee (a function of the complexity of the transaction involved) and the Priority fee (paid to ensure inclusion in the next block). Finally, slashing penalty rewards (forfeiture of an offending validator’s staking rewards) will also be a source of revenue.

Inflation Rewards: There is a predefined Inflation Schedule that will gradually release tokens across several years. 40% of total token supply (40 million out of 100 million) of Newton is allocated for this purpose. In the early days of Autonity it is expected that inflation rewards will play a major part in Validator earnings, tailing off as On-chain Activity rewards grow.

Please note that the total annual rewards are divided by all active stakers; hence, as the amount of staked tokens goes up, the reward rate goes down. 

We strive to make staking as safe and transparent as possible, however, it's important to consider factors that may influence whether a particular staking option is appropriate for you.

Slashing risk: ATN delegated to a validator can be partially slashed if the validator misbehaves. On top of getting slashed, a validator can also be jailed, during which time you will not be earning any rewards. 

Unbonding risk: When staking ATN tokens, there is a lockup period of ~ 6 hours. This means that investors will not be able to sell their tokens immediately, but instead need to wait ~ 6 hours after initiating unbonding before they can be traded again. This is something to keep in mind when deciding to stake, as crypto markets are highly volatile. Consider keeping funds liquid if you do not intend to hold ATN long-term. 

Protocol security risks: There is an inherent risk that the protocol could contain unknown bugs, this risk applies not only to staking but also the investment in ATN.

Please note that this is not an exhaustive list of all the risks related to staking.

Auton (ATN) is the native coin of an account on an Autonity network. It is the protocol coin in which an account balance is denominated and is used by transaction senders to pay gas fees. Token utilities include:

Transaction Fees: ATN is used as a means of paying for transaction fees. The Base fee is a function of the complexity of the transaction involved and the Priority fee is paid to ensure inclusion in the next block.

Newton (NTN) is the native staking instrument of Autonity. Its primary function is staking the network, and it is the staking token used in Autonity’s Proof-of-Stake consensus mechanism, and therefore the distribution of staking rewards. Token utilities include:

Staking: Users can temporarily lock up NTN to earn staking rewards.

Governance: Once you have staked your NTN, you can take part in governance votes.

Autonity implements the Tendermint Proof of Stake consensus protocol for computing and agreeing on state transitions. Tendermint BFT is a Byzantine Fault Tolerant (BFT) consensus engine developed by Tendermint. It offers instant finality, is horizontally scalable, and is secure against malicious actors. It is also open-source, meaning anyone can inspect and use the code. Additionally, it is simple to set up and use, allowing developers to quickly and easily build distributed applications. The active validator set consists of the 100 highest-ranked validators by staked tokens, from which 1 validator is randomly selected to propose a block with 66% of the remaining active validators being required to attest the block in order for it to become final. The higher the stake, the more likely they are to be selected.

The tokenomics of ATN and NTN will be made public once the mainnet goes live.

Initial token distribution: The Initial token distribution of ATN will be made public once the mainnet goes live.

Autonity aims to transform every market risk, whether for speculation or hedging, into a smart derivative product that can be traded within a logically decentralized ecosystem for price discovery and trade execution.

Risk, being a universal commodity that everyone possesses but only some desire, generates value when it is transferred between consenting parties at market prices. Traditional finance (TradFi) markets, however, offer a limited range of tradable risks, and current DeFi derivatives are mostly restricted to crypto assets.

DeFi derivatives suffer from the limitation of mimicking the TradFi futures exchange model, where derivatives exchanges are merged with their on-chain clearing mechanisms. This leads to dispersed liquidity across numerous pools for the same underlying products, hindering the ecosystem's ability to scale its market liquidity to match potential demand.

Autonity addresses this challenge with its concept of decentralized clearing through a new Layer 1 blockchain network. In this system, various trading protocols and execution methods can clear trades in the same open interest pool. This approach creates a logically decentralized environment for price discovery and trade execution, consolidating the market into a unified entity with offsettable positions in smart derivative products.