This is a high level overview of Sentry Nodes, the roles they fulfill in our ecosystem, and their unique incentives.
Due to the sheer variety of specialized node-types in the world of blockchain technology (e.g. validators, various masternode types such as "guardians", etc.), it is important to explicitly state a few things that Sentry Nodes are not.
- A authoritative subset of nodes that other nodes or clients are forced to trust
- A solution that resolves the tech stack down to Proof-of-Stake
- Privacy providers
- Block producers
Beyond simply serving as incentivized full nodes, Sentry Nodes do fulfill a few roles unique to themselves.
Sentry Nodes are Syscoin's solution to the challenge of providing a decentralized means of finality for Proof-of-Work (PoW) without resolving the entire stack down to sheer Proof-of-Stake (PoS). Sentry Nodes provide additive finality through multi-quorum chainlocks that resist 51% attacks and selfish mining. This turns merge-mining into a secure source of hashpower, and makes it possible for Syscoin to provide safe modular data availability while sticking to the Nakamoto ideal of every full node independently validating before trusting.
Finality is particularly important for securing modular ecosystems such as those supporting rollups, especially because proper data availability (DA) requires pruning, and pruning requires certain guarantees afforded only by finality. Lack of finality is the reason the Bitcoin chain itself cannot provide DA, and one of several reasons Syscoin's merge-mined chain is important for scaling and expanding Bitcoin in the most ideal way.
It is true that finality can be achieved relatively easily within the PoS model compared to PoW. However, Syscoin maintains that PoW (specifically Bitcoin's through merged mining) is most desireable for a settlement base-layer due to the hardness of PoW's real-world inputs, and its resilience against black swans such as wars and fiat hyper-inflationary events.
Ultimately we found the best finality would come in the form of an additive layer on top of standard Nakamoto-style consensus. In line with comments by Andreas Antonopoulos, we found that the quorums and chainlocks introduced by Dash in their evolution masternodes model would be useful to this end. However, some important changes and enhancements would be in order. Instead of Dash's single quorum, Syscoin implemented a more robust multi-quorum scheme, involved a greater portion of the network, and used a higher block time. Furthermore, the finality was made explicitly additive. In other words, in the rare event finality is not achieved, the chain continues unabated rather than having a breaking event.
The great stability of Syscoin's network is due in large part to Sentry Nodes being incentivized with block rewards and seniority bonuses. At time of writing the vast majority of Sentry Nodes have been running for over 2.5 years, having reached maximum seniority. Our seniority model, which is unique, is a proven success in this regard.
Syscoin's network of Sentry Node owners can participate in Syscoin's decentralized governance which takes place on a ~monthly basis. As a Sentry Node owner, you determine whether or not proposals get approved for superblock funding. Find out more and see how to participate in Syscoin's decentralized governance.
Owning a Syscoin Sentry Node and providing this service to earn income requires you to hold 100,000 SYS as collateral. While the Sentry Node is active it will be paid regularly for its service. The beginning of payments is determined by when the Sentry Node goes online. The (deterministic) qualification period following a Sentry Node activation typically lasts around a week depending on how many Sentry Nodes are currently on the network. A newly activated Sentry Node is added to queue of those waiting to be paid each block and this position will be kept as long as it is live. Fewer Sentry Nodes on the network translates to more frequent payments. With ~2500 online, a Sentry Node receives income roughly once every three days.
The base income payment to a Sentry Node is a 52.91 SYS block reward as of January 2024. There are two further seniority levels based on when the 100,000 SYS collateral transaction was settled, as can be seen below.
Payouts as of January 2024
There is a 5% reduction in these payouts each year. This reduction will cease in the distant future at a minimum of 5.275 sys per payout for basic-seniority level nodes, and 10.55 sys for full-seniority nodes. This floor, combined with SYS EIP-1559 coinomics, serves to keep Sentry Nodes incentivized indefinitely into the future.
If you have 100,000 SYS and are interested in setting up a new Sentry Node, use this setup guide.
If you already have a Sentry Node and are looking to upgrade Syscoin Core to the current latest version (4.4), use this upgrade guide.
The Syscoin foundation provides an on-chain registry by which Sentry Node owners can provably associate an EVM address to their Sentry Node. This makes it technically possible for Sentry owners to receive exclusive airdrops, participate in external governance processes, and other perks within EVMs such as Rollux or Ethereum. If you own one or more Sentry Nodes, you should probably do this!