How Pi Pools Works
How are Pi Pools Created?
A node operator creates their Node ID
on Pi Staking and registers with it, indicating they have their own hardware set up and are ready to become a PulseChain validator. For detailed instructions on setting up a node, refer to PulseChain's official documentation.
To become a validator on PulseChain, a node requires 32,000,000 PLS. Through Pi Staking, the node operator contributes a minimum of 16,000,000 PLS, while the remaining is sourced from the liquid staking deposit pool. To secure the half obtained from the deposit pool, the node operator pledges at least 25% PLS worth of collateral in the form of PPY tokens. This collateral serves as a commitment to good behavior and allows the protocol to compensate for any losses in case of misconduct.
After registering their Node ID
, staking 16,000,000 PLS, and collateralizing with PPY tokens, the node operator's Pi Pool is established.
To ensure consistent returns for liquid stakers and compound returns for node operators, the protocol implements Pi Pool cycling.
What is Pi Pool Cycling?
Pi Pools validate in 15-day cycles. At the end of each cycle, the Pi DAO transfers the original 32,000,000 PLS and earned rewards back to the smart contract. The liquid staking funds and their corresponding rewards are returned to the deposit pool for accurate growth tracking. If the protocol decides that the Pi Pool should undergo another cycle, the funds are withdrawn again. These funds are paired with the mirrored amount from the node operator's original funds and rewards. As a result, more than 32,000,000 PLS is staked for the upcoming 15-day validation period, leading to compounded rewards for both parties involved.
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