Thursday, May 13, 2021

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Ecosystem Alignment Incentive (EAI) and Staking Income

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  4. Ecosystem Alignment Incentive (EAI) and Staking Income

Ecosystem Alignment Incentive (EAI) provides staking income by letting you earn additional ndau whenever you are holding ndau in an account in your ndau wallet. You can earn even more EAI when you lock one of your ndau accounts for a specific period of time. You can’t withdraw your ndau while an account is locked, and longer lock periods will let you earn more EAI.

EAI is provided to encourage ndau holders to maintain their accounts over time and to encourage them to participate in the support of the entire ndau ecosystem. EAI comprises newly-created ndau (not released from the Endowment) that may be credited to a holder’s account in exchange for the holder’s ecosystem activities.

The ndau consensus network is built on a set of reliable, high-performance, censorship-resistant validator nodes. ndau holders help identify such nodes by observing their histories and selecting those to which they delegate their ndau accounts. Accounts retain their balances but do not accrue EAI until they have been delegated to a node, and that node is exclusively responsible for crediting that accrued EAI to its delegated accounts. Should a node fail to make those credits in a timely fashion, the holder will lose that accrued EAI and it may not be reclaimed. This potential penalty encourages the holder to study the set of available nodes, select high-quality ones, and monitor their ongoing performance. Additional limits and requirements may be placed on EAI credit transactions by the BPC. Should its delegated node fail to provide satisfactory performance, an ndau account may be redelegated to a different node at any time.

EAI is accrued based on the weighted average age (WAA) of the balance in an account. Each time an account is the target of a transfer transaction, its weighted average age is updated: outgoing transfers do not affect the WAA of the source account, nor do any EAI credit transactions. EAI is accrued according to an EAI Rate Schedule published by the BPC, and the rate at which EAI is accrued by an account is based on its WAA.

EAI is credited and appears in an account whenever a creditEAI transaction is submitted by the network node to which that account is delegated. The frequency of creditEAI transactions is determined by the network node operator, and the current creditEAI frequency set by the default ndev-managed network nodes is approximately once per day.  EAI service fees are automatically deducted to support the ecosystem.

EAI accrual rates and amounts are calculated and compounded continuously, and as such are not affected by the rate at which EAI is credited to any account. In a nutshell, compounding is continuous and earned EAI will appear in an account approximately once a day.

An account’s EAI may optionally be credited to a different account. That target account may be accruing EAI at a different rate than the source account or have other properties that make it a preferred destination for EAI. An account’s EAI may not be sent to an account that is itself already sending its EAI to a different account.

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