Tangle Network Concepts

Tangle Network is a decentralized infrastructure platform that enables the creation and deployment of secure, actively validated services called Blueprints. The network is powered by a unique restaking mechanism, which allows operators to stake their assets and earn rewards for providing computing resources and ensuring the security of the network.

The core components of the Tangle Network ecosystem are:

Blueprints: Specifications for decentralized services created by developers.
Restaking: A mechanism that allows operators and delegators to stake assets and earn rewards.
Service Instances: Live deployments of Blueprints requested by users and run by selected operators.

These components work together to create a powerful incentive system that encourages the development of valuable services, ensures the security of the network, and enables users to access a wide range of decentralized applications.

Operators

Operators are noderunners that have tokens at stake and choose to restake them to enable participation in roles, which conduct the jobs produced by a blueprint instance. In esssence, Operators are service providers whose effectiveness and security is guarenteed by their restaked assets.

Delegators

Delegators are similar to nominators in a consensus system like NPoS, but they delegate their restaked tokens to an operator, and participate in the rewards and risks similar to nominating a validator.

Blueprints

Blueprints are specifications that define a service and its requirements. Developers create Blueprints by specifying the necessary components, such as a "gadget" binary, jobs, smart contracts, and metadata. Blueprints are designed to be reusable, allowing multiple service instances to be deployed based on a single Blueprint. Read more about Blueprints

Restaking

Restaking is the process of staking assets to participate in the Tangle Network as an operator or delegator. Operators stake their own assets or assets delegated to them by delegators to secure Blueprints and earn rewards. Restaking helps to compound returns over time, as a portion of the earned rewards are automatically added to the staked amount. Read more about Blueprints

Service Instances

Service instances are live deployments of Blueprints requested by users. When a user requests a service instance, a subset of operators is selected to run the instance based on the requester's criteria, such as the number of operators or specific attributes. Operators earn rewards for running service instances, which can be further restaked to increase their potential earnings.

Incentives

Tangle Network's incentive mechanism is designed to reward both operators and developers. Operators earn inflationary rewards for securing Blueprints, while developers earn a share of the rewards generated by the usage of their Blueprints. This system encourages the creation of valuable services and ensures a productive service economy. Read more about Incentives

Interaction between Concepts

The core concepts of the Tangle Network ecosystem are closely interrelated:

Developers create Blueprints that define services and their requirements.
Operators and delegators restake assets to secure Blueprints and earn rewards.
Users request service instances based on Blueprints, which are run by selected operators.
Operators earn rewards for running service instances, which can be restaked to increase earnings.
Developers earn a share of the rewards generated by the usage of their Blueprints.

By understanding how these concepts work together, participants can effectively contribute to and benefit from the Tangle Network ecosystem.

Tangle Network Concepts

This document introduces the core concepts necessary for understanding restaking and Actively Validated Services (AVS) in the Tangle Network ecosystem. It assumes the reader has a basic understanding of staking in a Proof-of-Stake (PoS) system.

Introduction

At its core, Tangle Network consists of three main components:

Blueprints: Developers create Blueprints, which are specifications for decentralized services. Blueprints define the functionality, requirements, and incentive structure of a service.
Restaking: Operators stake their assets on Blueprints to participate in the network and earn rewards. Delegators can also restake their assets with operators to share in the rewards.
Service Instances: Users can request the deployment of live service instances based on Blueprints. Operators are then selected to run these instances based on their staked assets and other criteria defined by the requester.

Tangle Network's modular architecture and restaking mechanism create a powerful incentive system that encourages the development of valuable services, ensures the security of the network, and enables users to access a wide range of decentralized applications.

Restaking

Restaking is the process of automatically reinvesting staking rewards earned by operators and nominators back into staking. This mechanism helps to compound staking returns over time, as the reinvested rewards increase the staked amount and, consequently, the potential future rewards.

Key points about restaking:

In Tangle, noderunners who have restaked tokens delegated to them or restake their own tokens may become Operators who can complete jobs related to deployed blueprints.
Restaking is optional and can be enabled or disabled by operators and delegators, who delegate their restaked tokens to an operator.
When enabled, a specified percentage of staking rewards are automatically added to the staked amount at the end of each era.
Restaked rewards are subject to the same unbonding period as regular staked funds when a operator or nominator chooses to withdraw them.

Restaking encourages long-term commitment to the network and helps to maintain a stable and predictable staking participation rate.

Blueprints

Blueprints are specifications that define a service, similar to an actively validated service (AVS). However, Blueprints themselves are not live service instances. Developers create Blueprints by specifying a "gadget" binary, the jobs involved, a set of smart contracts for registration and requesting instances, and additional metadata.

Key aspects of Blueprints:

Blueprints are meant to be leveraged infinitely many times, allowing developers to define a service once and have it instantiated multiple times by different users with varying operator requirements.
Operators restake their assets on Blueprints to participate in running service instances, ensuring the security of the services.
Users can deploy live service instances using a Blueprint by specifying criteria such as the number of operators or other operator attributes.
Service instances are not guaranteed to involve all restaking operators; the service requester may only require a threshold of participants or participants satisfying certain registration criteria.

Examples of services that can be built using Blueprints include:

Oracle services for providing external data to smart contracts.
Privacy-preserving computation services for executing sensitive business logic.
Specialized data feeds or APIs for specific use cases.

Actively Validated Services (AVS) Instances

Actively Validated Services (AVS) are a unique feature of the Tangle Network that allows operators to offer additional services beyond block production and finalization. These services are "actively validated," meaning they are executed by the operator nodes and the results are included in the blockchain's state.

Examples of AVS include:

Oracle services for providing external data to smart contracts.
Privacy-preserving computation services for executing sensitive business logic.
Specialized data feeds or APIs for specific use cases.

Key aspects of AVS:

Operators can choose to offer one or more AVS, depending on their technical capabilities and business interests.
AVS providers can charge fees for their services, creating additional revenue streams beyond staking rewards.
The security and correctness of AVS are enforced by the same consensus mechanism that secures the Tangle Network blockchain.
AVS expand the utility and versatility of the Tangle Network, enabling a wider range of applications and use cases.

Operators interested in providing AVS should carefully assess the technical requirements, market demand, and potential risks associated with offering such services.

Incentives

Tangle Network's incentive mechanism is designed to foster a healthy service ecosystem and reward both operators and developers:

Restaked operators earn inflationary rewards for securing Blueprints proportional to their staked capital.
Developers who create popular Blueprints also earn a share of the rewards generated by the usage of their Blueprints, incentivizing the creation of valuable services.
The Tangle Network Token (TNT) holders possess the capability to turn on incentives for Blueprints they deem valuable, ensuring a productive service economy and avoiding spammy Blueprints and instances.

Interaction between Restaking and AVS

Restaking and AVS are complementary mechanisms that can enhance the overall sustainability and growth of the Tangle Network ecosystem:

Operators that provide valuable AVS can attract more staking support from nominators, leading to higher staking rewards and more funds available for restaking.
Restaking helps operators to accumulate more stake over time, increasing their chances of being selected for block production and AVS execution.
The additional revenue from AVS fees can be partially restaked, further compounding the operator's staking returns.

By understanding and leveraging the synergies between restaking and AVS, operators can maximize their participation in the Tangle Network and contribute to its long-term success.

Intro to Restaking Incentives