Attestation
Attestation Requirement
There will be a controlled amount of attestors on the iBTC network, selected by the team to ensure minimal counterparty risk. Attestors will be required to stake 500,000 $BIT tokens to attest within the network.
Attestation Rewards
Attestors will earn income made up from two separate considerations.
Baseline Rewards: A fixed amount of $BIT coming from iBTC’s token emissions will be rewarded to attestors for the first five years. This reward will be 83,333 $BIT per month split between all attestors, based on their Reputation Score (explained below) as a ratio of their total score compared to other Attestors.
Buybacks: iBTC will complete monthly buybacks of the $BIT token, of which 50% will be redistributed to Attestors, and the other 50% kept in the treasury. Each attestor will earn a % of the bought back tokens based on their Reputation Score.
For example, if 3 Attestors exist in the network, and a total amount of $BIT to be distributed is made up of 83,333k $BIT from the tranche bought back is 16,667 $BIT, then a total of 91,666.5 $BIT will be redistributed to the attestors. Between them, Attestor A has a score of 3, Attestor B a score of 1.5, and Attestor C a score of 0.5, so:
Attestor A receives an additional reward of 300 $BIT bringing his total reward to 250,000 + 3,000 $BIT;
Attestor B receives an additional reward of 150 $BIT bringing his total reward to 250,000 + 1,500 $BIT;
Attestor C receives an additional reward of 50 $BIT bringing his total reward to 250,000 + 500 $BIT.
Attestor Reputation Scores
Attestor scores will begin at a base level of 1 and will be impacted by four criterion:
Liveness
Correctness
Staked amount
Delegated total
Liveness
Liveness refers to the status of an attestor and if they are active.
iBTC will ping Attestor networks daily to check if Attestors are active. If an Attestor is active for less than 99% of the pings monthly, their score will be reduced by 0.1 for each 1% of up time missed.
For example, if an Attestor is active for 95% of the pings, their baseline score of 1 is decreased to 0.6, ceteris paribus.
Correctness
iBTC will rank Attestors based on their Correctness, which in essence tracks whether the Attestors are correct compared to the consensus from other Attestors. The reputation score of the Atestor will go down in line with their slashing penalty, explained below in the bullet points that showcase what happens to an Attestor’s stake when one reaches a conclusion the others did not. If their stake gets slashed by 5%, their Reputation Score gets multiplied by 0.95, and so on.
Staked amount
Staked amount refers to the amount an Attestor stakes.
When an attestor stakes the baseline required stake of 500,000 $BIT they receive a score of 1, but they can, at maximum, double their score to 2 by staking twice as much or more $BIT.
Delegated Total
Delegated total refers to the amount of tokens delegated to attestors.
Attestors will be able to open their attestation to delegation, whereby retail $BIT holders will have the ability to delegate their tokens to earn rewards. This system not only generates rewards for retail users, as well as more rewards for the attestors open for delegation, but it creates a natural system of incentive alignment where higher earnings are directly related to higher levels of trust as represented by the delegation
At the end of each month iBTC will track the total amount of tokens delegated to Attestors. The total amount of delegated tokens will equal a total score of the number of attestors in the network. Based on the portion of tokens delegated to each attestor, they will receive an equal portion of the score.
For example, if 3 Attestors exist in the network the maximum multiplier possible is 3. If there is a total of 1,000 $BIT delegated, whereby Attestor A received a delegation of 700 $BIT, Attestor B received a delegation of 200 $BIT, and Attestor C received a delegation of 100 $BIT then:
Attestor A receives a score bonus of 2.1 (3 × (700/1000));
Attestor B receives a score bonus of 0.6 (3 × (200/1000));
Attestor C receives a score bonus of 0.3 (3 × (100/1000)).
Attestor Slashing
In terms of slashing, attestors will have their stake slashed in the case of predefined negligence or malicious actions: failing to attest when prompted to attest, or reaching a conclusion during attestation that other attestors did not.
The weight of slashing will vary on the offence. We propose a three-strike penalty system, whereby the severity of the slashing grows with each step.
For failing to attest when prompted to attest:
First strike gets the Attestor’s stake slashed by 1%.
Second strike gets the Attestor’s stake slashed by 5%.
Third strike gets the Attestor’s stake slashed by 15%.
For reaching a conclusion during attestation that other attestors did not
First strike gets the Attestor’s stake slashed by 5%.
Second strike gets the Attestor’s stake slashed by 30%.
Third strike gets the Attestor’s stake slashed by 100%, eliminating their stake.
If an attestor gets slashed, the delegators also get slashed a proportionate amount.
Additionally, when an Attestor is slashed, their baseline reward is reduced by an equivalent amount to the total % slashed.
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