Staking Hub: Flow AMA

Flow is an upcoming decentralized blockchain designed to be the foundation for a new generation of games, apps, and the digital assets that power them. Flow is designed with three key principles in mind: developer-first experience, consumer-friendly onboarding, and mainstream-ready apps and distribution. On April 9th, the Flow team joined us to answer our Flow questions. 

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Flow AMA

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Quick Takes

  • Multi-node infrastructure plans to solve the “scalability trilemma” 
  • Block rewards will be the primary source of income for node operators
  • Games, NFT marketplaces, and entertainment applications are the current focus
  • Community driven development

Flow Primer

Flow is a layer one blockchain being developed by Dapper Labs, the team behind CryptoKitties. Flow applies the concept of pipelining to its design, which is intended to dramatically scale the efficiency of the network. This is done by separating the jobs of node operators into four separate roles: Collection, Consensus, Execution, and Verification. Flow is backed by the likes of Andreesen Horowitz and Union Square Ventures. 

Solving the blockchain “scalability trilemma”

The scalability trilemma is a term coined by Vitalik Buterin that describes tradeoffs when choosing how to optimize blockchain architecture. It’s the idea that you cannot have a homogenous network that exhibits security, scalability, and decentralization. You have to choose at most, two of the three. 

Flow plans to solve this by breaking down the network into different node types. By doing this, it will allow Flow to make different tradeoffs at different parts of the network. Consensus and verification nodes focus on decentralization and security, execution nodes can focus on scalability and security, while collector nodes act as a gateway of Flow with the external world. 

flow ama

Staking FLOW

FLOW is the native token on the Flow blockchain. It will be used to compensate node operators and delegators in the form of block rewards, transaction fees, and inflation. Block rewards will be the primary source of income for node operators, and transaction fees will be used in order to keep the inflation rate low. There are no plans to use inflation for anything other than rewarding node operators. 

“There’s always two sides to an incentive structure, the sticks and the carrots. The carrots are the rewards given to honest node operators. If you do your job you get paid, and if you fail to do your job, you don’t get paid. As simple as that.”

Dieter Shirley, Chief Architect of Flow

There are conditions in which a node operator can be slashed. Each node has different kinds of behavior that can result in slashing. For example, an execution node that produces an incorrect result or a consensus node that double votes will both result in slashing. The Flow team does not expect to slash node operators for downtime. 

“The sticks are the slashing conditions. We learned very quickly that node operators really don’t like to work with protocols where being slow or unresponsive can lead to slashing. However, we absolutely need to slash nodes that engage in active malfeasance.”

Dieter Shirley, Chief Architect of Flow

What’s being built on Flow?

Games, NFT marketplaces, and entertainment applications are currently the main types of applications being developed on Flow.

“We want to make it as easy as creating a facebook page or twitter profile for communities to create their own NFT economies.”

Roham Gharegozlou, CEO of Dapper Labs

Flow is starting with games, NFTs, and entertainment because they believe that will drive mainstream adoption. That being said, Flow is a general purpose blockchain, and developers are able to build anything on Flow. They are already beginning to see voting contracts, DAOs, and DeFi applications being built. 

The Flow Community

The team behind Flow sees community development as highly important to the long-term success of the blockchain. They have onboarded a wide variety of organizations including Purdue University and Ubisoft, which plan to run their own nodes on the network, and they are looking to their community to help educate these organizations.

“We definitely want to engage the larger validator community to help onboard these folks. Our partners have lots of questions around both the tactical operation of staking and the strategy and so far they’ve found it helpful to engage with folks we’ve introduced them to in the space.”

Layne Lafrance, Product Lead of Flow

What to expect from Flow

The main focus for the Flow team is to have consumer-facing Dapps available on day one. 

Outside of this, the team hopes to: 

  • define with the community how governance should work on Flow, and submit a proposal for community review. 
  • begin working on cross-blockchain interoperability with a focus on Ethereum.  
  • develop a stablecoin as well as credit card on-ramps that will be available for end-users of Dapps, including DeFi applications.

Special Thanks 

Special thanks to Dieter, Layne, and Roham for spending an hour with Staking Hub to answer all of our questions! 

Thank you Gavin for co-hosting and thanks to our Staking Hub community for all of your wonderful questions. 

Feel free to join our Staking Hub Telegram group if you haven’t already. 

Planning on Staking FLOW?

Figment Networks will be supporting Flow and FLOW token holders at launch. Contact us for more information.