KEY TAKEAWAYS
- The Avalanche network’s Etna upgrade has transformed the Beam Network into a Layer 1 network, enhancing its flexibility and decentralization.
- The upcoming Horizon upgrade will transition the Beam Network to a permissionless, proof-of-stake model, allowing broader participation in network validation.
- Validators on the Beam Network will earn rewards through transaction fees and incentive grants, promoting active network security and participation.
- The Horizon upgrade aims to complete by Q1 2025, further decentralizing and securing the Beam Network.
The Avalanche network’s recent Etna upgrade has transformed the Beam Network into a Layer 1 network, allowing it to choose its own consensus mechanism. This significant change is set to enhance the flexibility and decentralization of the Beam Network.
As part of this transformation, the Beam Network is planning a ‘Horizon’ upgrade. Once completed, this upgrade will enable the Beam Network to adopt a permissionless, proof-of-stake consensus mechanism. This shift will allow anyone meeting the network criteria to validate and secure the Beam Network by running or delegating to a Beam Node. Validators will be incentivized with network rewards, including transaction fees, protocol fees, and validator incentive grants.
Transition to Permissionless Proof-of-Stake
The Horizon upgrade will introduce a new consensus mechanism, transitioning the Beam Network to a permissionless, proof-of-stake model. To run a Beam Node, validators must stake at least 1 Node Token and 20,000 BEAM. The Node Token, an ERC-721 token, is essential for operating Beam Nodes. There is no maximum supply or time limit for minting these tokens, which can be minted by interacting with an ownerless smart contract.
Primary rewards for validators will include transaction fees distributed in BEAM. Secondary rewards will also be available, with 80% allocated to Node Token stakers and 20% to BEAM stakers. Delegators can participate by staking their BEAM and/or Node Tokens to validators, with a 21-day waiting period for undelegation.
Decentralization and Security Enhancements
The Etna upgrade removes the requirement for Layer 1 validators to validate the Avalanche Primary Network, thus eliminating the need to stake 2,000 AVAX. This change allows the Beam Network to customize its staking requirements, promoting greater decentralization and security.
The Beam Network’s decentralization efforts are further supported by the Horizon upgrade, which empowers users to contribute to the network’s security. Validators will be responsible for data availability, processing transactions, and adding new blocks. A slashing penalty may be imposed on validators and their delegators if they fail to maintain adequate uptime or engage in malicious activities.
The Horizon upgrade is targeted for completion before the end of January 2025, but not later than the end of Q1 2025. More details about the upgrade and its implications can be found here.
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