After receiving quality feedback from the community about the functionality of our cryptoeconomic model, I am pleased to share with all of youl the updates we have made for the AMBERnomics system as well as some specific details concerning the onboarding of masternodes!

Since our last announcement in July, AMB-NET has developed exceptionally well. It is steadily growing into a global decentralised blockchain and IoT network capable of supporting an indefinite number of future data solutions. In light of these developments, the first steps towards onboarding masternodes to the network will begin today with the mailing out of the official “Masternode Application Form”. In order to make this process easy and for everyone to understand what has been developing around the Ambrosus cryptoeconomics, I would like to walk everyone through:

1) How to apply for a spot on AMB-NET,

2) important modifications we have made to the accessibility and operability of Hermes Nodes,

3) further instructions for Apollo Masternodes, especially in relation to block rewards, and finally,

4) new improvements to the functionality of Atlas Masternodes.

5) the introduction of block rewards and heartbeat bundles.

In short, I am going to explain how our AMBERnomics has been substantially improved across the board!

Part 1: What’s going on?

As promised, today we’ll be sending the link to the official Masternode application form, exclusively to our newsletter subscribers (so make sure you’re subscribed: ambrosus.com/subscribe, if you’re not yet). From Wednesday onwards, we’ll start sharing the link on all of our other channels as well.

If you want to run a node, you MUST fill in this form ASAP as this list will be used to select who gets a node next. Once you’re shortlisted, a personal invitation will be sent to you accompanied by a more complete form and agreement, tailored to the type of node that you have applied for. Upon acceptance of the more detailed and node-specific application, Ambrosus will provide instructions and assistance via email on the specifics of setting up and operating a masternode on AMB-NET.

Test-Net:

The Ambrosus test-net has been live for over 3 months now, and has received very positive feedback from client companies using and testing the network in a variety of contexts. In the coming months, we will be onboarding new masternode applicants, first to the Ambrosus test-net in order to allow operators to gain familiarity with the tooling and operations of a masternode, without risk of drawing penalties from the network.

As it currently stands, masternode operators will first get a spot on the test-net, and only after a successful trial period, will they be relocated to AMB-NET 1.0. This is so as to ensure that the operators who are allowed onto the network are aware of their duties and how to best perform them. Candidates already running a masternode on test-net will have a clear advantage of being selected for main-net usage, in comparison with someone who has not demonstrated their abilities on the test-net. Altogether, this will allow the best operators to access the network earliest.

Part 2: Hermes Nodes — Community & Professional Editions

As explained on several occasions, Hermes nodes do not earn rewards from the network — they only use up AMB’s by creating bundles. The motivation of running a Hermes node is that they allow you to build and run any solution or application for a specific industry vertical on top of AMB-NET, from which you can then (re-)sell that service to any client of yours at any price you see fit. All you have to do it to pay the 12$/bundle fee to the network and everything extra that you earn from your clients is yours.

This means, for example, that an expert in the diamond industry can run and customise a Hermes node as part of a complete diamond-tracking solution connected to various sensors and IT systems, with custom smart contracts for the diamond trade. He could potentially then price his solution to his clients at 10x or even 100x what he needs to pay in bundles.

Hermes Community Edition:

As you can see, it is vital for us to lower the barrier for Hermes nodes as much as we can: they’re the ones creating (and thus paying for) bundles on AMB-NET, so the more active Hermes nodes, the more bundles created. To achieve this, we have decided to reduce the deposit required to run a basic Hermes node on mainnet to zero, nada, nothing. This means all you need to run a Hermes node is to download the latest version from our github and run it. You’ll then be able to create bundles by paying 12$ like everyone else. Note that this Hermes node, is the “Hermes Community Edition”, which is entirely open-source and provides the basic functionality of Hermes nodes. This edition does not come with all the additional tooling that will help you run a production-grade Hermes node at scale.

Hermes Professional Edition:

To get access to all the exciting tooling we’re building into Hermes Masternodes (things like database & API auto-scaling, service monitoring tools, admin dashboard, fine-grained optimisations of how/when bundles are created, etc.), you will need to apply and receive a license for the “Hermes Professional Edition” — which will require a stake of 150K AMB tokens, as many of those tools will be built specifically for the needs of large companies creating thousands of bundles per day (or re-selling them for a hefty premium). More information on the details of the Hermes Professional Edition will be released in a later and more in-depth blog post.

Part 3: Auction System for Apollo Nodes

Apollo nodes are the authority of the Ambrosus network: they are important for proper network functionality and integrity, and as such we’ll have to ensure that such authority nodes can be trusted. Until AMB-NET reaches the adoption, scale, and especially reliability required, the onboarding of Apollo nodes will take place in a strictly controlled manner. For the first few months, the majority of Apollo nodes will be run by Ambrosus and our partners in order to guarantee our users the reliability and performance they need. As our tests prove successful and our network usage grows, we’ll be opening up spots for new Apollo nodes every few weeks in order to gradually decentralise AMB-NET.

In the long term (2020 and beyond), we will aim to guarantee that Apollo nodes are proportionally operated by Businesses and other professional organisations (33% of nodes), community members (33%), and Ambrosus and Partners (34%). According to our tests and simulations, the optimal quantity of Apollo nodes needed is quite limited, beyond which performance starts degrading; we don’t expect AMB-NET to have more than 100–150 Apollo nodes in the next few years.

Overall, we will onboard only a very small quantity of Apollo nodes until November, and their operators will be selected strategically based on various criteria (typically long-term and active supporters of our project will get priority). Additionally, service companies that are keen to run Hermes nodes in addition to their Apollo node, in order to also build applications on top of AMB-NET will have an advantage as well. Finally, businesses and any trade organisation that will generate large quantities of bundles will also be prioritised for the benefits of network.

From November 1st onwards, Apollo nodes operators will be chosen based upon an open and transparent auction: Each new spot for an Apollo node will be given to the highest bidder and he will have to deposit the amount he wishes to bid within the next 48 hours. If you fail to deposit the amount of your bid within that time frame, you will lose your spot, and will need to re-enter the bidding process (incentive for higher bids will be explained later). For the benefit of the network, we reserve the right to provide Apollo node spots to key strategic partners that will be creating significant traction on the network.

Part 4: No More Total Cap for Atlas nodes

Based on the feedback from the community, the main area for improvement focused on the storage capacities of Atlas nodes. As an improvement upon the communities suggestions we have decided to modify the storage condition, and instead introduce a “cooldown” period for every node to regulate how bundles are distributed to who. Each time a node stores a bundle, that node will not be allowed to get another bundle for a certain amount of time before it can apply again for another challenge (counted in bundles, roughly between 10–100). The cool-down period will now vary for each node of course (so bigger atlas nodes have a smaller period, therefore getting more bundles/month statistically). In case of bad service (downtimes, low bandwidth, etc.) the cooldown period can be increased individually for each node, just like it can be decreased (as a “fidelity” bonus) for a node that has been providing a good service for a long time. The exact numbers, how they work, and how they will be increased are still under revision and testing and it’s likely those will be managed manually for the first few months, after which they’ll gradually be automatically handled via smart contracts as our model proves itself over time.

Part 5: Introduction of Block Rewards and Heartbeat Bundles

Finally, as a further addition to the modifications of the cryptoeconomic model, we have decided to introduce a system of block rewards to further incentivise network participants to operate a masternode on the network to assure the integrity of the network, and contribute to decentralised data storage.

What this means is that every year onward the system will produce 2% new tokens per year, which will be distributed to Apollo and Atlas nodes. These nodes, in charge of securing, validating, and storing bundles of data on the network are thereby further incentivised to perform their functions correctly. Based on such performance, only active participation in the network will warrant rewards for nodes, rather than merely passively holding tokens in a wallet.

More specifically, Apollo nodes will be receiving block rewards directly from the process of creating new blocks and validating their transactions, while Atlas nodes will receive block rewards via Heartbeat Bundles generated by the public Hermes nodes. As the name suggests, Heartbeat Bundles are created periodically to capture and relay queued transactions from IoT devices and networks, and thereby distributing the storage onto Atlas nodes. These Heartbeat Bundles will be generated using block rewards in order to also provide block rewards to Atlas nodes based upon their storage availability. Ultimately, this allows AMB to be consumed in a manner that supports the overall growth and development of the network.

In terms of the specifics behind the block rewards, this has to do with the commitment a node operator demonstrates via their stake to the network. In the case of Apollo nodes, the deposit of each node in AMB is used to determine the amount of block rewards that the node is entitled to: since Apollo nodes secure the network, it only makes sense that the larger the collateral a node operator puts forward to validate the network, the larger the reward for such a function should be. In essence, the rewards are proportional to the risks the nodes are taking alongside the benefits to network security and robustness the nodes provide with an increased deposit.

As an example, imagine that there are four (4) Apollo nodes that each deposit 250k AMB: Out of 1 million AMB total, they all have staked the same amount of AMB, and as such they are all entitled to equally split the block rewards they generate; which would be 25% for all four of them (250k / 1million total AMB).

However, now consider if a node is added onto the network, which has deposited 1 million AMB (bringing the total deposit up to 2 million). That node, will now receive 50% of the block rewards, as the deposit for the node is 1 million of the total 2 million AMB. Meanwhile the other four Apollo nodes, will now only receive 12.5% of the block rewards (as they have deposited 250k/2 million total AMB). Basically, the block rewards for Apollo nodes are decided for each operator based on the amount an operator has decided to stake in the network, in relation to the total amount that other node operators have decided to stake in the network. By configuring the network in such a manner, the most crucial function of the entire cryptoeconomic system (i.e. the validating of the blocks on the network) is incentivised to maximise the network integrity provided.

Conclusion: How to increase your chances to get a node faster?

Below are a couple of main points I want to outline, for everyone to understand what criteria are most important for allowing masternode operators onto the network.

Be transparent in your application. The more you tell us about you, since when and how you’ve supported us, and why you should get a node, the more you will likely get in early.

Help us engage our community. The more you help promote our message and spread our word, and also help us reach new clients and partners, the more your chances of running a node will increase.

Run a testnet node: When offered the opportunity to run a testnet node, jump on it — this will not only give you the opportunity to get familiar with our tech before running a real staked node, but also give you an advantage in the selection.

Help generate bundles. If you build an application that generates a lot of bundles and/or you have a team of developers ready to build apps on AMB-NET, you’ll likely have an edge.

Be ready to bid for Apollo nodes.

Overall, the Masternode onboarding application signifies an exciting new chapter of development for the Ambrosus ecosystem: in the near future, companies and individuals alike will be able to realise the full potential of AMB-NET and to create a truly decentralised ecosystem of sustainable data management.

For those interested in extending this discussion further, please send us your thoughts about this model via the Ambrosus community channels (Reddit, Telegram, Email).