How is Secret(SCRT) coin generated?

Through "Secret Sharing Consensus" and "staking," SCRT coins are generated, incentivizing validators to secure the Secret Network while earning rewards proportional to staked amounts and duration.

Dec 12, 2024 at 09:16 pm

How is Secret (SCRT) Coin Generated?

Secret (SCRT) is a privacy-first blockchain platform that enables developers to build decentralized applications (dApps) with strong data privacy guarantees. SCRT is the native cryptocurrency of the Secret Network, and it is used to pay for transaction fees, staking, and other network activities.

The Secret Network uses a unique consensus mechanism called Secret Sharing Consensus (SSC), which is a variation of the Proof-of-Stake (PoS) consensus mechanism. In SSC, validators are randomly selected to propose and validate new blocks. However, unlike traditional PoS systems, validators in SSC do not reveal their votes to the public. Instead, they share their votes secretly with a group of randomly selected other validators. This process ensures that the identity of the validators who voted for a particular block remains secret, which helps to protect the privacy of the network.

SCRT coins are generated through a process called staking. Staking is the process of locking up SCRT coins in a smart contract for a certain period of time. In return for staking their coins, validators receive rewards in the form of SCRT coins. The amount of rewards that a validator receives is proportional to the number of coins that they have staked and the length of time that they have staked them.

Here is a more detailed explanation of the steps involved in generating SCRT coins through staking:

1. Become a validator. To become a validator, you must first meet certain requirements, such as having a minimum amount of SCRT coins staked and running a full node on the Secret Network.
2. Create a staking pool. Once you have met the requirements to become a validator, you can create a staking pool. A staking pool is a group of validators who pool their resources together to increase their chances of being selected to propose and validate new blocks.
3. Deposit SCRT coins into your staking pool. Once you have created a staking pool, you can deposit SCRT coins into it. The amount of SCRT coins that you deposit will determine your share of the rewards that the pool earns.
4. Wait for your pool to be selected to propose and validate a block. Once your pool has been selected to propose and validate a block, you will receive a reward in the form of SCRT coins. The amount of the reward will be proportional to the number of SCRT coins that you have staked and the length of time that you have staked them.
5. Withdraw your rewards. Once you have earned rewards, you can withdraw them from your staking pool. You can withdraw your rewards at any time, but you will forfeit any rewards that you have earned if you withdraw your coins before the end of the staking period.

By staking their SCRT coins, validators help to secure the Secret Network and earn rewards in the form of SCRT coins. Staking is an important part of the Secret Network ecosystem, and it is essential for the long-term health of the network.