Flux Token Series - Validators

We do a bitesize breakdown of Flux Validators and how they make money on Flux.

What is a Flux Validator?

A Flux Validator is either an individual token holder or business that provides resolution data to markets.

What type of data do they provide?

There are two types of validators

  • Data-driven — these validators provide data from automated sources like APIs. They are used to resolve markets on currency or crypto prices, or anything else that has an API such as sports or esports.

  • Arbitrary-data — these validators provide data which is from a manual source. This data can be markets on politics, startups, private equity, or memes.

What does their resolution do?

When validators submit data, they are staking FLUX token as a guarantee that the data they are providing is correct. This data is then used to determine the correct outcome and, ultimately, the payout to traders.

How do Validators participate?

Validators stake FLUX into a validator pool. Once they are staked, they are eligible to be chosen to resolve markets. To improve security, a subset of validators is selected from the pool using the Randomness Beacon on NEAR Protocol. This subset then provides resolution data for markets during the upcoming 24hr period.

How do Validators make money?

Validators make a percentage of open interest for providing the resolution data. The validator Pool is paid a percentage of all open interest in markets that resolved during this 24hr period, whether they were selected to provide data or not.

Example:

Market — Will Trump be elected President in 2020?

  • 100m DAI in open interest

  • 1,000 Validators in this current pool

  • Resolution fee = 1% of open interest

The validator fee would be 1,000,000 DAI paid out to validators based on their total stake in the pool. If it were equal stakes, each validator would be paid 1,000 DAI for participating in resolving this market.