L. Glossary
| Term | Definition |
|---|---|
| Abandoned Validator | A validator node has not been part of the active validator set for the past 10 years. Read more |
| Availability | Reflects a validator’s readiness and reliability in contributing to the network's consensus and transaction validation processes. Read more |
| Bonus Score System | A mechanism designed to incentivize good behavior and penalize bad behavior among validators of the DMD network. Each validator is assigned a Bonus Score, which influences the likelihood of being selected for validation duties. Validators with higher scores have a proportionally higher chance of selection. The Bonus Score can be adjusted based on various factors such as standby status, key generation participation, availability. Read more |
| Byzantine Fault Tolerance (BFT) | Refers to the ability of a distributed system to continue functioning correctly even when some participants (nodes) fail or act maliciously. BFT ensures that honest nodes can agree on the state of the ledger despite these issues, named after the "Byzantine Generals Problem". |
| Claiming | The process of claiming DMD v3 coins in 1-1 ratio (first 3 months after mainnet start at reduced rate later) to DMD v4 coins in order to participate in DMD v4 ecosystem, including staking DMD on validator nodes for the purpose of receiving rewards for validation, as well as for voting on proposals in the DAO that will govern the DMD chain. V4 guide ‘How to claim your v4 coins’ is here |
| Claiming Pot | The Claiming pot starts as the total amount of coins that should be held by coin holders and are already allocated to the coin holders in DMDv3. At the initiation of the chain, coins are sent directly to their owners as soon as they run the claiming dApp tool to prove ownership of the old DMDv3 address and link it to their new DMDv4 address. The remaining claiming pot is a 1-to-1 representation of all coins that are waiting to be claimed by the DMDv3 coin holders. |
| Competitive Consensus | A consensus mechanism is any method used to achieve agreement, trust, and security across a decentralized computer network. In the context of blockchains and cryptocurrencies, proof-of-work (PoW) and proof-of-stake (PoS) are two of the most prevalent consensus mechanisms. A competitive consensus have a single node who did win some POW or POS competition to have the right to create a block and earn block rewards. As multiple nodes could win nearly at the same time, high blocktimes are used to avoid this. And in case it happens, microfork and reorgs are mechanics to find out which is the longer chain (blocks found on the shorter chain will become orphans or uncles). |
| DAO | Decentralized Autonomous Organisation that manages the DMD Chain. A DAO does not have a central authority; instead, power is distributed among token holders who collectively cast votes. Link to the DMD dao user guide |
| DeFi (Decentralized Finance) | An umbrella term for financial services built on blockchain technology that operate without intermediaries like banks. DeFi platforms offer lending, borrowing, trading, and other financial services through decentralized applications (dApps). |
| Delegator | Delegators are digital asset holders (can either be an individual or an entity) who cannot, or do not wish to run a validator node themselves. Instead, they delegate their stake to one of the active validator of the network and obtain rewards. The minimum required amount of DMD for delegators is 100DMD. The value can be changed by DAO governance, if community agrees on the decision. |
| Delta Pot | The delta is the coins that would have been generated between the current issuance at DMDv3 snapshot and the maximum total coins of 4.38 million DMD. The delta pot is one of the sources for epoch rewards (the other one is the reinsert pot). |
| Genesis Block | The first block ever created in a blockchain, which marks the starting point of the ledger. |
| dPOS Stakers (Delegated Proof-of-Stake) | In the Delegated Proof-of-Stake (dPOS) system, stakers delegate their staking power to trusted validators who are responsible for producing blocks and maintaining the network. In DPoS, a delegator does not lose control of his coins and locks them in the staking contract. As long as they stay locked, they add their coin amount to the staked coins of the target validator, so they earn a share of that validators rewards. |
| Early Epoch End | An event occurs when the epoch concludes ahead of its scheduled time due to a significant number of network participants failing to engage in the HoneyBadgerBFT (HBBFT) process, thereby pushing the system towards its fault tolerance limit. Read more |
| Epoch | A specific period or cycle in a blockchain network. The epoch is used to define a set timeframe during which a group of validators is responsible for validating transactions. DMD’s epoch lasts 12 hours. |
| Epoch Reward | A number of DMD coins gained as a reward for the transactions' validation in the current Epoch. Here's how the epoch reward is calculated: 1) Epoch reward = (Reinsert pot + Delta pot)/6000; 2) To distribute rewards toward each validator = ((Epoch reward - 10%(the governance pot share)/25)), where 25 is the total number of active validator candidates. Block rewards for active validators and delegates on them are split proportionally according to the number of coins staked for that validator, but besides it, the validator gets the guaranteed reward on the Epoch end: 20% of validator rewards goes upfront to the node operator. The leftover 80% of validator rewards are distributed proportionally to the coin ownership (node operators coins again get their share). |
| Entitlement | It is created when the snapshot for the DMDv3 Network is taken, is transferred into the DMDv4 Network and is valid until it is claimed. |
| Full Node | A Node that stores the entity of the whole Blockchain |
| Governance DApp | A DApp used for managing the Governance. In DMD the governance and staking processes are available from the Diamond UI DApp. User guide can be found here |
| Governance Pot | The Governance pot is managed by the DAO. The governance pot is funded by 10% of epoch rewards (adaptable value can be increased by DAO decisions) and by a part of the late/never claimed coins (50% towards governance pot and 50% towards reinsert pot). Moreover, the governance pot is funded with 50% of the coins that are abandoned by being staked on an inactive validator node (validator nodes are closed if they are not active for 10 years). |
| HBBFT (HoneyBadger BFT) | A cooperative Byzantine fault tolerance consensus algorithm (official eprint) A blockchain consensus mechanism where network participants collaborate to validate transactions and agree on the state of the ledger, focusing on minimizing conflict and encouraging collaboration. Read more |
| Node Operator Share | A configurable reward mechanism where a node owner delegates a share of their node owner rewards to a different node operator address. A node owner gets an upfront 20% of each epoch reward because they own the node. From this, a percentage is shared with the node operator for their role. The node owner reward (20%) is configurable for each pool, allowing a portion of this share (0.01% - 20% (20% means 100% of the node owner reward)) to be forwarded. Read more |
| Orphan Blocks | Blocks that are generated but not included in the main blockchain due to the occurrence of multiple valid blocks at the same time. When the network resolves which chain to follow, the other blocks become "orphans" and are discarded. This happens on competitive consensus engine, not on HBBFT honeybadger cooperative consensus engines. |
| Open Ethereum Client | An Ethereum client, initially known as Parity, which is used to interact with the Ethereum blockchain. It allows users to run a full Ethereum node and interact with the network for tasks like deploying smart contracts and validating transactions. |
| Proof-of-Stake (PoS) | A consensus mechanism where validators are chosen to create new blocks based on the number of tokens they hold and are willing to "stake" as collateral. PoS is more energy-efficient than PoW, as it does not rely on solving complex computational problems. |
| Proof-of-Work (PoW) | A consensus mechanism used by some blockchains (e.g., Bitcoin) where miners solve complex mathematical problems (hash functions) to validate transactions and add them to the blockchain. The process requires significant computational power, leading to energy-intensive operations. PoW is inferior to PoS because of the logic that there is a target blocktime and if too much hashrate exists. The riddle must become harder to avoid too fast block generation (as HBBFT cooperative consensus engine have no target blocktimes and is not competitive, DMD don't waste any energy beyond the normal server energy needs). |
| Pool Owner Reward (Node Owner Reward) | A Pool (Node) owner always receives 20% of all rewards as an incentive for the effort of maintaining a Pool and the Node. |
| POSDAO | The name of the dPOS like logic used by DMD Diamond v4 that helps to elect the active validators. This dPOS like logic where amount of coins staked on a validator represent trust of people into this validator and more likely make him a winner in the random selection process for the next active set. Other factors are "luck" and a validator score, which is calculated based on availability and responsiveness and failure free work of the validator candidate. |
| Reinsert Pot | Coins are recovered to the reinsert pot under two circumstances: when people do not claim their DMDv4 coins and when validators are inactive for 10 years. The reinsert pot is funded with 50% the coins that are abandoned by being staked on an inactive validator node. Validator nodes are closed if they are not active for 10 years, so if someone stakes their coins on a validator node that has not been active for 9 years, their stake will be reclaimed 1 year later — but it should be obvious that someone should not stake coins on an inactive validator. Transaction fees also go into reinsert pot, which means they help to secure the blockchain in future years instead of instant to be added towards the actual validator reward. |
| Staking DApp | A DApp used for staking POSDAO Nodes. In DMD the governance and staking processes are available from the Diamond UI DApp. User guide can be found here |
| Validator Candidate Node | A Full Node that has enough stake to run a Validator Node, and has staked the minimum Stake on the POSDAO Contract. A Full Node can become a Validator Candidate by installing the validator candidate software and staking a minimum of 10,000 DMD. Validator candidates are chosen in every Epoch to be in the next validators set based on 3 parameters: staked coins, score and luck. All validator candidates participate in DAO voting and influence on the decisions making inside the DMD community. |
| Validator Node | A Validator Node that is part of the active validator set |
| Validator Set | A List of Nodes that participate in the HBBFT Consensus |
