Staking

The Phron blockchain employs a novel approach to validator selection, leveraging both user staking and AI-ranked performance to ensure a robust, fair, and meritocratic system. This method prioritizes high-performing nodes while incorporating community trust and randomness to democratize the selection process.

Meritocratic Selection

Validators are chosen based on a combination of AI-generated performance metrics and user staking, promoting a system where merit and community trust determine validator selection. The AI scores and ranks nodes by their operational efficacy, creating a competitive environment that motivates validators to uphold high standards. This merit-based selection system ensures that the most reliable and efficient validators are prioritized.

Community Participation

Incorporation of user staking into the validator ranking allows the community to have a direct influence on the selection process. Validators that receive higher stakes from the community are perceived as more trusted, thereby integrating a democratic element into the system. This approach aligns the network’s operation with the preferences and trust of its users.

Fairness and Randomness

To further ensure fairness, the system includes a random lottery element that considers both the AI rankings and the percentage of stakes. This mechanism introduces a degree of randomness, mitigating biases and providing opportunities for newer or smaller validators to participate in network validation.

Selection Algorithm

The final decision on validator selection is based on the following factors:

1. The AI ranking of a node k, denoted as $R^{k}_{\text{AI}}$, ranks nodes in ascending order based on their performance, with the best nodes receiving a higher rank.

2. The stake-based ranking of a node k, denoted as $R^{k}_{\text{Stake}}$, applies the same ranking principle, prioritizing nodes with higher stakes.

3. A random lottery that accounts for both AI and stake-based rankings, calculating the probability $R_{\text{k}}$ for a node k to be selected as a validator.

The algorithm is formalized by the following equations:

where A is the sum of AI ranks for all nodes, B is the sum of stake-based ranks, and $P_{\text{k}}$ represents the selection probability of node k

Reward System

PHRON constitutes the link between the PhronAi Ecosystem and the holder. The PHRON reward system for node validators will work with the APR method; it is described with the following equation:

where:

• 0 ≤ x < ∞

• y is the APR (in decimal form)

• x is the time (in years)

This APR calculation factors into the broader staking and reward mechanism, ensuring validators are incentivized proportionally to their commitment and performance over time.