Impossible Cloud Network Documentation
  • Welcome to the Impossible Cloud Network
  • Introduction
    • Introduction
    • ICN Protocol Overview
    • Key Features
    • Key Concepts
    • FAQs
    • Legal Disclaimer
  • ICN Glossary
  • ICN Protocol Smart Contracts
  • ICN Participation
    • Stake and Earn
    • Become a Hardware Provider
    • Run a HyperNode
  • Network Architecture
    • Design Overview
    • ScalerNode Network
    • HyperNode Network
    • Satellite Network
    • Services and Apps
    • Smart Contracts
  • ICN Economics
    • Tokenomics
      • The ICNT
        • Circulating Supply
        • Total Supply
        • Token Minting
        • Burn Mechanisms
      • Initial Allocation
      • Token Unlock Schedule
      • Token Utility
    • Builders
      • Access to Network Resources
      • Capacity Allocation
    • Hardware Providers (HPs)
      • HP Rewards
      • Collateral
        • Delegation
        • Slashing
    • ICN Link
  • MiCA Whitepaper
    • Link to MiCA Whitepaper Download (published on May 7, 2025)
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On this page
  • Delegation
  • How Delegation Works
  • Rewards for Delegators
  • Withdrawal and Re-delegation
  • Incentives for Hardware Providers
  1. ICN Economics
  2. Hardware Providers (HPs)
  3. Collateral

Delegation

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Last updated 10 days ago

Delegation

Delegation within the Impossible Cloud Network (ICN) enables token holders to contribute Network Collateral to Hardware Providers (HPs). This mechanism allows external participants to support HPs in meeting their collateral obligations, earning shared rewards and staking incentives in return.

This flowchart illustrates the delegation process in the ICN. Delegators (including ICN Link holders with locked vICNT and regular ICNT holders) provide tokens as Network Collateral through automated smart contracts. Delegators receive a portion of HP rewards and an additional staking subsidy, with tokens becoming available for withdrawal or re-delegation at the end of their chosen delegation period.

How Delegation Works

Delegation involves two primary categories:

  • ICN Link Holders:

    • Delegating Locked Tokens (vICNT): Holders can delegate locked tokens (vICNT) during the lock-up period to provide Network Collateral to HPs.

    • Transition to Regular Delegation: Once tokens mature into ICNT, holders can recommit these as regular ICNT.

  • Regular ICNT Holders:

    • Delegating Liquid Tokens: Regular ICNT holders can delegate tokens directly as Network Collateral to HPs.

    • Flexible Commitment Period: Minimum delegation duration is 1 day, with longer periods available to enhance rewards.

Delegated tokens are secured through automated smart contracts, ensuring that Network Collateral remains locked according to the delegator's chosen commitment period.

Rewards for Delegators

Delegators earn rewards based on the share of HP rewards they help secure, combined with a staking subsidy (APY):

  • Reward Share from HPs: The specific percentage is set by the HPs and can be from 0 to 100%

  • Additional Staking Subsidy (APY): All Network Collateral contributors (delegators and HPs) receive an additional staking reward. The APY depends on:

    • Total Tokens Staked (TTS): Higher total staked amounts across all staking participants reduce the APY.

    • Commitment Duration: Longer commitments significantly increase staking rewards, with maximum rewards available at 4-year commitments.

This reward structure incentivises long-term delegation, reinforcing network stability and supporting HP operations.

Withdrawal and Re-delegation

Delegators can choose to withdraw or re-delegate their tokens at the end of their selected lock-up period:

  • Re-delegation: Extend support to the same or another HP to continue earning rewards.

  • Withdrawal: Tokens become available for withdrawal once the delegation period concludes, subject to any slashing penalties applied during the period.

Delegated tokens remain at risk if the HP fails to meet their Network Collateral obligations or performance standards.

Incentives for Hardware Providers

Delegation provides substantial benefits to HPs, helping them to:

  • Expand Network Capacity: Delegated collateral allows HPs to increase capacity without needing to lock additional ICNT themselves.

  • Optimise Collateral Requirements: HPs can efficiently manage their financial commitments by attracting external collateral providers, allowing for greater flexibility and network growth.

This structure encourages continuous HP participation, supporting overall network expansion and reliability.

Figure 1: Delegation Process Flowchart