Staking & Delegation

UltraDAG uses a proof-of-stake system with delegated staking. Validators stake UDAG to participate in consensus and earn rewards. Token holders can delegate to validators without running a node.

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Staking Overview

Parameter	Value
Minimum validator stake	2,000 UDAG
Maximum active validators	100
Epoch length	210,000 rounds (~12.15 days)
Minimum delegation	100 UDAG
Unstake/Undelegate cooldown	2,016 rounds (~2.8 hours)
Default commission	10%
Commission range	0-100%

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Validator Staking

Becoming a Validator

To become a validator:

1. Acquire at least 2,000 UDAG
2. Submit a Stake transaction
3. If your effective stake ranks in the top 100 at the next epoch boundary, you become an active validator

curl -X POST http://localhost:10333/stake \
  -H "Content-Type: application/json" \
  -d '{
    "secret_key": "YOUR_SECRET_KEY",
    "amount": 200000000000
  }'

Active Validator Set

The active validator set is determined at each epoch boundary (every 210,000 rounds):

1. All staked addresses are ranked by effective stake (own stake + delegations)
2. The top 100 become active validators for the next epoch
3. Ties are broken by address bytes ascending (deterministic)

All stakers are ranked by effective stake. The top 100 become active validators earning full rewards. Those ranked 101+ become passive stakers earning a reduced 50% observer rate.

Effective Stake

A validator’s effective stake determines their ranking and reward share:

$$ \text{effective_stake} = \text{own_stake} + \sum_{d \in \text{delegators}} d.\text{amount} $$

Attracting delegations is a key strategy for validators to enter and remain in the active set.

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Reward Distribution

Active Validator Rewards

Active validators earn rewards proportional to their effective stake. Each round:

$$ \text{validator_pool} = \text{round_reward} \times (1 - \text{council_share_pct}) $$

$$ \text{reward}_i = \text{validator_pool} \times \frac{\text{effective_stake}i}{\sum{j \in \text{active}} \text{effective_stake}_j} $$

Example: With 4 active validators and a 1 UDAG round reward (10% to council):

Validator	Effective Stake	Share	Reward
Alice	50,000 UDAG	50%	0.450 UDAG
Bob	25,000 UDAG	25%	0.225 UDAG
Carol	15,000 UDAG	15%	0.135 UDAG
Dave	10,000 UDAG	10%	0.090 UDAG
Total	100,000 UDAG	100%	0.900 UDAG

The remaining 0.100 UDAG goes to the Council.

Passive Staking Rewards

Validators who are staked but not in the top 100 still earn rewards at a reduced rate:

$$ \text{passive_reward}_i = \text{active_equivalent}_i \times 0.50 $$

This incentivizes staking even when not in the active set — passive stakers earn 50% of what they would earn as an active validator with the same stake.

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Delegation

How Delegation Works

Token holders who don’t want to run a validator can delegate their UDAG to an existing validator:

1. Delegator sends a Delegate transaction specifying a target validator
2. Delegated UDAG moves from the delegator’s liquid balance to a DelegationAccount
3. The delegated amount increases the validator’s effective stake
4. The delegator earns a share of the validator’s rewards, minus commission

curl -X POST http://localhost:10333/delegate \
  -H "Content-Type: application/json" \
  -d '{
    "secret_key": "DELEGATOR_SECRET_KEY",
    "validator": "VALIDATOR_ADDRESS",
    "amount": 10000000000
  }'

Delegation Parameters

Parameter	Value
Minimum delegation	100 UDAG (10,000,000,000 sats)
Delegations per address	1 (one active delegation at a time)
Delegation to multiple validators	Not supported (use multiple wallets)
Re-delegation	Undelegate + Delegate (cooldown applies)

Commission

Validators set a commission rate that determines their cut of delegation rewards:

$$ \text{delegator_pool} = \text{validator_total_reward} \times \frac{\text{delegated_stake}}{\text{effective_stake}} $$

$$ \text{commission} = \text{delegator_pool} \times \frac{\text{commission_pct}}{100} $$

$$ \text{delegator_reward}_i = (\text{delegator_pool} - \text{commission}) \times \frac{d_i.\text{amount}}{\text{total_delegated}} $$

Example: Validator with 10% commission, 60,000 effective stake (20,000 own + 40,000 delegated), earning 0.54 UDAG/round:

Component	Calculation	Amount
Validator’s own share	0.54 * (20,000/60,000)	0.180 UDAG
Delegator pool	0.54 * (40,000/60,000)	0.360 UDAG
Commission (10%)	0.360 * 0.10	0.036 UDAG
Distributed to delegators	0.360 - 0.036	0.324 UDAG
Validator total	0.180 + 0.036	0.216 UDAG

Setting Commission

curl -X POST http://localhost:10333/set-commission \
  -H "Content-Type: application/json" \
  -d '{
    "secret_key": "VALIDATOR_SECRET_KEY",
    "commission_percent": 15
  }'

Commission changes take effect immediately. Delegators should monitor their validator’s commission rate.

Checking Delegations

View your delegation:

curl http://localhost:10333/delegation/DELEGATOR_ADDRESS

View a validator’s delegators:

curl http://localhost:10333/validator/VALIDATOR_ADDRESS/delegators

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Unstaking and Undelegating

Cooldown Period

Both unstaking and undelegating have a 2,016 round cooldown (~2.8 hours at 5-second rounds):

1. Submit Unstake or Undelegate transaction
2. Funds enter cooldown state (unlock_at_round is set)
3. During cooldown: funds earn no rewards and cannot be transferred
4. After cooldown expires: funds automatically return to liquid balance

# Unstake (unstakes everything, no amount field)
curl -X POST http://localhost:10333/unstake \
  -H "Content-Type: application/json" \
  -d '{
    "secret_key": "VALIDATOR_SECRET_KEY"
  }'

# Undelegate (undelegates everything, no amount or validator field)
curl -X POST http://localhost:10333/undelegate \
  -H "Content-Type: application/json" \
  -d '{
    "secret_key": "DELEGATOR_SECRET_KEY"
  }'

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Slashing

Equivocation Penalty

Validators who produce conflicting vertices in the same round are slashed:

Parameter	Value
Default slash percentage	50%
Governable range	10-100%
Slash destination	Burned (removed from total supply)

Cascade to Delegators

Slashing cascades proportionally to all delegators:

$$ \text{delegator_slash}_i = d_i.\text{amount} \times \frac{\text{slash_pct}}{100} $$

Example: Validator with 50,000 total delegations slashed at 50%:

• Each delegator loses 50% of their delegation
• A delegator with 5,000 UDAG delegated loses 2,500 UDAG
• All slashed amounts are burned (deflationary)

Slash Detection

Equivocation is detected automatically by any node that receives two different vertices from the same validator for the same round. The evidence is:

1. Gossiped to all peers
2. Included in a DAG vertex as equivocation evidence
3. Once finalized, deterministically triggers the slash
4. All honest nodes apply the identical slash — no voting or disputes

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Epoch System

Parameter	Value
Epoch length	210,000 rounds
At 5-second rounds	~12.15 days
Validator set recalculation	Once per epoch

At each epoch boundary:

1. Rank all stakers by effective stake
2. Top 100 become active validators
3. Remaining stakers become passive (50% reward rate)
4. Cooldowns from the previous epoch are processed
5. Commission changes are reflected in new reward calculations

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Summary of Fee Exemptions

Transaction Type	Fee
Transfer	MIN_FEE (10,000 sats)
Stake	Free
Unstake	Free
Delegate	Free
Undelegate	Free
SetCommission	Free
CreateProposal	MIN_FEE (10,000 sats)
Vote	MIN_FEE (10,000 sats)

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Next Steps

• Governance — Council of 21 governance system
• Supply & Emission — emission schedule and halving