The concept of staking has been the scaling solution in the blockchain. Deploy Kusama Nodes to scale the Kusama network through its scaling solution.
The scaling solution in the Kusama Network is the recent upgrade regarding the Nomination pool. The upgrade allows any user who holds fewer crypto funds than the required funds to become a nominator and start earning from the crypto funds that will be staked in the nomination pool.
Before we dive into more details, let’s understand a bit about Kusama Network –
What is Kusama Network?
Kusama network acts as an ecosystem for the Polkadot network, where developers can test upgrades, applications, and different blockchain experiments.
2 types of blockchains are used under the Kusama Network –
1. Relay Chains –
Relay Chains/ Main network where every transaction is finalized. The Relay chain uses a variation of the Proof of Stake (PoS) consensus mechanism, known as Nominated Proof of Stake (NPoS).
With this variant, Nominated Proof of Stake (NPoS), any user can lock cryptocurrency in the special contract to follow the roles required for its operation –
1. Validators –
The validators validate the data on the parachain blocks. Moreover, they also become part of the consensus mechanism and vote per changes to the network.
2. Nominators –
The nominator’s work is to select trustworthy validators to secure RelayChain. Nominators assign their staked KSM tokens to validators and distribute their votes to them.
2. Parachains –
Parachains are also called user-generated networks. Parachains allow users to run on separate layer-1 blockchains simultaneously to the Kusama network. Being able to run separate layer-1 tied to the Relay Chains focuses on security, increasing scalability and synergy of the Kusama network.
Any users can scale on the Kusama network as the Nomination Pool is live on Kusama runtime v0.9.22, where any user can create a pool and allow others to join it on Kusama.
Blockchain infrastructure company like Zeeve help with the Kusama network, which can help through its Nomination pool, a scaling solution.
What is a Nomination Pool?
The Nomination pool supports the KSM holders holding less than 0.1 KSM tokens to pool their KSM; thus, the KSM holders can nominate validators to gain rewards from them.
The nomination pool in the Kusama network works like a stake, and the Nominated Proof of Stake (NPoS) supports the KSM holders to participate as nominators.
How do Nomination pools work?
The Nomination pools are the scaling solutions that allow users to pool their KSM tokens together. The user creates the pool by depositing KSM tokens, which are used as the pool’s stake. Further, users are allowed to join in, increasing the pool’s stake. Once the pool becomes full, the user who created the pool can manage and assign a validator to the pool.
Each pool is reflected as a single nominator in the staking system.
Why are Nomination pools important?
The goal of the Nominated Proof of Stake (NPoS) consensus mechanism is to maximize the stake of the Kusama Network. When it comes to nominations, the network favors the nominators with the highest stake so they can enter the set of active nominators.
Closing Thoughts –
Nomination pools are a scaling solution within the ecosystem of the Kusama network. With the help of the Nomination tool, the users can become the nominators and earn rewards from staking even if they don’t hold enough KSM tokens or less than 0.1 KSM tokens. This option will open the door to blockchain infrastructure companies in the ecosystem of the Kusama netwo