This blog post is structured as an FAQ, answering critical questions about secret nodes and how you can participate in Enigma’s network.

What is the minimum ENG stake required for Enigma?

As discussed in previous posts, but now finalized, the minimum ENG stake required for a mainnet secret node is 25,000 ENG. This number was selected based on our study of many other networks, internal modeling based on the current distribution of ENG, and balancing our desire for decentralization with network sustainability and having meaningful stakes for node operators. This minimum threshold will however be reduced over the life of the network.

What will block rewards and network fees look like on Enigma?

In return for operating a secret node and staking on Enigma, node operators receive a share of fees paid on the network as well as block rewards.

Block rewards for the Enigma network will begin at 750,000 ENG for the first year the mainnet is in operation and decrease 10% year-over-year thereafter. The total block rewards pool is thus 7.5M ENG and will not be exhausted for the first century the network is in operation. This pool is 1/5th of the total token pool reserved for network, community, and ecosystem incentives (37.5M ENG). Enigma team visualized this below:

Please keep in mind that the total supply of ENG is fixed at 150M ENG, with 75M ENG already in circulation since 2017 and the vast majority of the remainder not expected to enter circulation within the next few years.

As stated previously, the long term success of Enigma is dependent both on demand-side and supply-side adoption of the network, including the amount of developers building applications and secret contracts, the amount of fees in ENG being paid in the network, and the amount of adoption by end users of applications built on Enigma.

Enigma’s long-term aim is for the network to be sustainably supported by fees and not by block rewards, though it is expected in the earliest stages after launch that block rewards will provide the majority of node compensation (as is common with new networks).

In designing Enigma, Enigma considered how to balance this long term focus on sustainability with bootstrapping the network. Secret node operators in the early stages of Enigma need to be able to provide consistent uptime and network support, and they incur the costs associated with this — thus they require adequate incentives. As a result, Enigma’s design of network economics needed to be competitive.

What (and why) is a genesis node?

In the early “bootstrapping” stages of a network, it is important to grow in a decentralized, but still manageable way. Early days of the Enigma network will require hard forks and changes, and being able to effectively coordinate and communicate will be critical.

Therefore, the number of secret nodes available when Discovery is deployed on mainnet will be limited to 50 “genesis nodes” — a number that based on our research and modeling meaningfully decentralizes the network while maintaining its early stability.

How are genesis nodes selected?

For the purposes of decentralizing Enigma, genesis nodes must be selected in as fair and permissionless a manner as possible. It is also in the best interest of the network to launch with a group of nodes that have demonstrated an honest commitment to upholding the network (uptime, security, etc). Thus the substantial majority of genesis nodes are being selected solely based on their testnet activity — a period we are referring to as the Genesis Game.

Nodes active during Discovery’s testnet phase will be assigned a weighted score calculated based on their total (testnet) ENG staked and their uptime during this period. This “genesis score” is projected to be calculated based on the following formula:

sqrt (avg_staked_amount) * number_of_days_staked * percentage_uptime

Anyone can participate in the Genesis Game during the testnet staking period. The “game” itself is projected to last eight weeks. At the conclusion of this phase, genesis nodes will be selected as follows:

The top 30 nodes by genesis score are selected as genesis nodes. More nodes (up to 10 maximum) will be eligible for whitelisting based on contributions to the Enigma ecosystem, primarily those building supply-side tooling for workers and staking operations. Dependent on the size of this whitelist, 10–20 more nodes are chosen based on a lottery system, with weighting in the lottery determined by your genesis score. This means that even if you do not finish in the top 30 by genesis score, you are still eligible for random selection as a genesis node. This will help encourage broader participation in testing the Discovery network.

As mentioned, there will be 50 genesis secret nodes in total when mainnet launches. These nodes will be the only nodes eligible to operate when Discovery launches, and they alone will receive block rewards and network fees until more nodes are added to the network. (In a later section, there are details on how and when secret nodes beyond genesis nodes will be added.)

I want to run a genesis node. What happens now?

Here’s Enigma’s development timeline right at this moment.

Enigma will open-source its Discovery code at the end of March. Its development team has been working hard for the past months to develop protocol essentially from scratch. Enigma is not an Ethereum fork or dApp — it’s a complex protocol for allowing secure computation over encrypted data. Once all the code has been open sourced, Enig,a will continue its protocol development with further internal reviews, coverage for “rainy day scenarios”, and stress testing the network. Finally, Enigma will deploy Discovery on an Ethereum testnet. At that time, the Enigma team and Ambassadors will help support node operators and produce materials aimed at helping them launch their secret nodes on testnet, using testnet ENG tokens.

The timeline for node runners is thus as follows:

In order to operate a testnet node, you will need testnet ENG tokens. To ensure operators stake above the minimum threshold, Enigma will be distributing testnet ENG tokens based on mainnet holdings of ENG. This next part is very important: to receive this distribution of testnet tokens, you will need to hold your ENG in an address that you control.That means if you are currently holding mainnet ENG tokens on an exchange and plan to run a testnet node, you will need to withdraw these tokens in order to receive your testnet ENG. If you hold your tokens in MEW, MyCrypto, or a hardware wallet, you do not need to take any action. In an upcoming post, Enigma will announce the date on which it will take a snapshot of mainnet ENG holdings. On this date, the number of testnet tokens you will receive is determined based on how much ENG is held in your mainnet address. Enigma will announce the snapshot date at least two weeks in advance, giving you time to move tokens if needed. However, if you already know you wish to run a testnet node and become a genesis node, we advise that you take this action as soon as possible to be safe. After the snapshot is taken, Enigma will distribute testnet ENG. As mentioned above, after deploying Discovery on testnet you will then be able to set up and begin operating a secret node. Again, Eigma intend to provide significant support to node runners in the form of documentation and videos After a short setup period following testnet deployment, the Genesis Game will begin. As described earlier, genesis nodes will then be selected based on uptime and testnet token staking.

How will nodes increase over time?

As mentioned before, the network is limited at launch to 50 genesis nodes to help ensure stability during its early stages. We considered a few different models for safely adding secret nodes to the network, including a staged approach or additional staking “games”. Enigma’s aim was to minimize complexity, maintain security and stability, and maximize decentralization.

The model Enigma settled on is as follows: after a future anticipated hard fork, any node that meets the minimum staking requirement and hardware requirements will be allowed to join the network. By limiting the network to genesis nodes until after the hard fork occurs, Enigma provides an exclusive period for genesis node operators who supported the network during its testnet phase while helping to ensure there are no disruptions from an early fork. But by then opening up the network to all participants, Enigma preserves the permissionless nature of Enigma and expand the network rapidly once its operations have been secured. This also keeps things relatively simple: no more complex games or competitions, no new requirements.

How are nodes selected for computations?

Nodes are selected for computations based on their ENG stake. To keep things simplistic for the purposes of this post: the more ENG that is staked by a node, the greater the node’s chance of selection. There is no maximum stake for a single node, but again, the minimum stake is 25,000 ENG.

Will there be stake slashing in Discovery?

The answer is simple: no, there will not be stake slashing when Discovery launches.

What are hardware and software requirements?

Specialized hardware requirements for Discovery are not substantial. However, running a secret node will require access to an SGX-enabled computer or an SGX-enabled cloud operator. Any 6th Generation Intel Processor (Skylake) after Q3 of 2015 should have this capability. However, this may or may not be enabled by the BIOS — for example, SGX in Mac computers is not and cannot be enabled. Currently IBM and Alibaba Cloud do enable SGX instances. For a detailed list of SGX enabled hardware and cloud options, please visit this link. Additionally, Enigma requires the use of Linux as an operating system as Windows is not expected to be supported in Discovery.

See also:

Secret Nodes, Part 2: Exploring ENG Economics and Building a Sustainable Network

Secret Nodes: Exploring Staking, Stakeholders, and ENG