Hardware Providers (HPs)
Last updated
Last updated
Hardware Providers (HPs) are the backbone of the Impossible Cloud Network (ICN), responsible for providing the essential resources—such as storage and compute capacity—that power the network. By supplying these resources, HPs enable Service Providers (SPs) and users to access ICN's decentralised cloud services.
HPs are rewarded with ICNT tokens for their contributions. These rewards are designed to incentivise HPs to maintain high performance standards, comply with Service Level Agreements (SLAs), and commit to the network over the long term by locking collateral. The structure of these rewards also encourages the growth of the network during its initial stages and ensures efficient, high-quality service as the network matures.
Hardware Providers (HPs) must meet specific collateral requirements to contribute their storage and computing power to the ICN. Collateral acts as a security measure, ensuring that HPs remain committed to their obligations and perform their duties reliably. It also protects the network against disruptions caused by poor performance or non-compliance.
Node Collateral: HPs are required to lock collateral based on their expected monthly reward. This collateral must be fully provided to participate in the network, and 100% of HP rewards are diverted until the Node Collateral requirement is fully satisfied. Once fully collateralised, any additional overcollateralisation can be used by HPs to expand their capacity at no extra cost.
Network Collateral: Network Collateral is proportional to the storage capacity offered by the HP and must be provided to support the network’s stability. If Network Collateral falls below the required threshold, rewards are diverted to fill the gap based on specific percentages, depending on the level of undercollateralisation. Overcollateralisation results in increased reward multipliers.
HPs must lock their collateral for an initial period of 36 months, with the option to extend this period. Longer commitment periods result in higher reward multipliers, providing further incentives for HPs to remain committed to the network.
Overcollateralisation: HPs that provide more collateral than required can expand their capacity, and they are eligible for higher reward multipliers. Overcollateralisation is a signal of reliability and stability, benefiting both the HP and the network.
Undercollateralisation: If HPs fall below the required collateral threshold, they are considered undercollateralised, and a percentage of their rewards is diverted to meet the collateral requirements until compliance is achieved. Depending on the extent of undercollateralisation, different percentages of rewards are redirected.
Hardware Providers (HPs) must meet Node Collateral and Network Collateral requirements to contribute resources to the Impossible Cloud Network (ICN).
Node Collateral: Ensures the reliability of each hardware node. Collateral must be six times the monthly reward and is locked for at least 36 months. If undercollateralised, 100% of HP rewards are diverted until compliance is restored.
Network Collateral: Calculated as 30% of the circulating ICNT supply, based on the node's share of the network's capacity. Collateral can be self-provided or delegated. Rewards are diverted based on collateralisation level:
0% ≤ Collateral < 60%: 75% of rewards diverted.
60% ≤ Collateral < 80%: 60% of rewards diverted.
80% ≤ Collateral < 100%: 30% of rewards diverted.
Collateral ≥ 100%: No diversion.
HPs may extend their commitment period in 6-month increments, improving their reward potential.
Overcollateralisation allows HPs to expand their capacity or improve reward multipliers, while undercollateralisation results in reward diversion until requirements are met.
For more detailed information on collateral and how it impacts HP rewards, visit the Collateral page.
The ICN system allows external delegators to help HPs meet their collateral requirements through a delegation mechanism. This creates a collaborative ecosystem where both HPs and investors benefit from network growth.
The ICN system allows external delegators to help HPs meet their collateral requirements through delegation and the ICN passport mechanism. This creates a collaborative ecosystem where both HPs and investors benefit from network growth.
The Type II ICN Passport enables holders to delegate their locked ICNT (vICNT) to Hardware Providers (HPs). By delegating these tokens, passport holders assist HPs in meeting collateral requirements, and in return, they receive a portion of the rewards based on the performance of the HP they support.
Delegation of collateral can also be performed by regular ICNT holders who do not possess a Type II ICN Passport. These delegators earn rewards through a staking subsidy mechanism, incentivising their participation. Rewards for regular delegators are determined by the amount of ICNT they delegate and the HP's performance.
Delegation carries risks, as delegated collateral may be slashed if the HP fails to meet SLA requirements. For more information, visit the Delegation page.
HPs are rewarded based on their capacity contributions and their level of commitment to the network. The rewards system is designed to encourage high performance, reliable services, and long-term participation.
Reward Types
Utilisation Rewards: HPs earn Utilisation Rewards based on how much of their capacity is used by SPs. These rewards are tied to the Cluster Price, which depends on the capacity booked within a cluster. The more that an HP's capacity is utilised, the higher the rewards they will receive. Utilisation Rewards are self-sustaining and covered by the access contributions provided by SPs.
Base Rewards: Base Rewards are a time-limited protocol subsidy designed to bootstrap new network regions or hardware classes. Base Rewards help HPs earn rewards even during the early stages of network growth when utilisation is low. Over time, these rewards fade out to encourage self-sustainability.
For detailed information on reward multipliers, see the HP Rewards page.
To maintain the integrity of the network, HPs must comply with the Service Level Agreements (SLAs) that ensure reliability, uptime, and overall performance. When an HP fails to meet these obligations, their collateral—both their own and any delegated collateral—may be subject to slashing.
When Slashing Occurs
SLA Violations: If an HP fails to meet service requirements, such as experiencing downtime or performance degradation, the protocol may slash a portion of the HP's locked collateral.
Delegated Collateral: If an HP has collateral provided by external delegators, that collateral may also be slashed if the HP underperforms.
For more information, visit the Slashing page.
To operate as a Hardware Provider (HP) within the Impossible Cloud Network (ICN), HPs must meet specific technical requirements, including hardware specifications and geographic distribution considerations.
For full details on these technical requirements, refer to the Contribute Hardware page, which outlines the necessary hardware and steps to become an HP.
The ICN is organised into multiple network layers—Regions, Zones, and Clusters—that determine how capacity is allocated and managed. HPs are grouped based on geographic and network factors, which impact pricing, availability, and the assignment of capacity requests from SPs.
Regions, Zones, and Clusters: HPs are grouped into clusters, which are further organised into zones and regions. Capacity allocation begins at the cluster level and can extend across zones or regions if necessary.
Cluster-Level Pricing: Cluster-level pricing allows the network to determine a fair and competitive price for capacity within a given cluster, influenced by factors such as reservation price and overall availability.
For more information on the network hierarchy and how HPs are organised geographically, visit the Network Architecture page.
