HP Rewards
Last updated
Last updated
Hardware Providers (HPs) play a critical role in the Impossible Cloud Network (ICN), and the rewards structure is designed to incentivize their contribution effectively. The ICN reward system encourages strong growth in network capacity, fosters high utilisation, and ensures HPs maintain high service standards and compliance with Service Level Agreements (SLAs).
The ICN reward system for HPs is split into two main categories:
Utilisation Rewards: Based on actual usage by Service Providers (SPs), rewarding HPs for the capacity they actively contribute to the network.
Base Rewards: A temporary subsidy designed to bootstrap new network capacity, gradually decreasing as utilisation rises to sustainable levels.
This section provides an overview of how capacity booking works for HPs and how rewards flow through the network.
When Service Providers (SPs) submit a capacity request, the ICN protocol automatically allocates this request to an appropriate HP. Allocation is based on several factors including:
Reservation Price: HPs can set a reservation price for their resources, with lower prices being more likely to attract bookings.
Commitment Period: HPs with a longer commitment period have a higher chance of being selected.
Once capacity is allocated, HPs are rewarded based on their level of utilisation and their participation in base rewards during the growth phase.
Pricing for resources is determined on a cluster level, reflecting the aggregated Reservation Price of all HPs in that cluster while also being capped by a Max_Cluster_Price to ensure cost competitiveness.
Reward multipliers are determined by a points system that evaluates HP commitment and collateralisation against the network average.
Points System: HPs accumulate points based on the level of collateralisation and the duration of their commitment.
Multiplier Application: The accumulated points are then compared to the network average, and the rewards for each HP are adjusted accordingly.
For a more detailed explanation, see the Reward Tiering page.
Utilisation Rewards are provided to HPs based on the actual use of their hardware resources by SPs. This aligns rewards with network activity, encouraging HPs to provide capacity at competitive rates.
Reward Formula:
Self-Sustaining Model: Utilisation rewards are fully covered by SP Access Requirements. These contribution create a soft-peg mechanism, where rewards are initially low but increase over time as the network matures and utilisation rises.
Competitive Incentive: HPs within a cluster can adjust their prices to compete for SP capacity requests. The cluster price is defined as:
Base Rewards are a temporary subsidy designed to bootstrap new network capacity in early stages of growth. They are distributed to Hardware Providers (HPs) regardless of the utilisation of their resources, helping support the network during its initial phase.
Definition: The Base Reward is an incentive provided to HPs to ensure capacity is available, even when utilisation is low.
Reward Scaling:
Capacity Contribution: HPs receive rewards based on the capacity they offer to the network.
Gradual Decrease: Base rewards gradually reduce over time as utilisation improves, moving towards self-sustainability.
Purpose: The base rewards aim to attract HPs during the network’s growth phase, providing incentives for expanding capacity until the network reaches a sustainable level of utilisation.
To maintain network integrity, slashing is enforced in cases where HPs fail to meet their commitments, including downtime, SLA violations, or poor performance.
When Slashing Occurs
Collateral at Risk: HPs put up Node Collateral and Network Collateral as a guarantee of their service.
Slashing Events: Triggered by service failures or breaches of SLA, slashing can apply to both the HP’s own collateral and any delegated collateral.
For more detailed information on the slashing mechanism and its consequences, visit the Slashing section.
At the end of the commitment period, HPs have the option to either withdraw or recommit their collateral, enabling them to maintain eligibility for rewards.
Withdrawal or Recommitment: HPs are encouraged to recommit to extend their commitment period, thereby earning higher rewards through the Reward Tiers.
For a detailed explanation of reward calculations and how to maximise HP rewards, visit the Reward Tiers Page.
