Interview With Aventus On The Opportunities For Token Holders With Their Staking Program
When the Ethereum Network launched its Deposit Contract and began its journey into a Proof-of-Stake (PoS) based consensus, critics doubted that it was going to generate enough interest to lock the necessary 500,000 ETH. At the time of writing, over 7 billion ETH or $25 billion have been sent to this address.
This proved one more time that there is a high demand from stakers to access products capable of offering yields on their investments. This was acknowledged by Aventus Network, a customizable layer-2 scaling solution to build on Ethereum and other blockchains for faster and low-cost transactions.
The protocol operates with a PoS based layer; a native token called AVT, and a staking mechanism via the Aventus Validator Program. This allows users to have access to fast transactions and rewards for staking their funds in the protocol.
We sat down with their team to discuss the relevance of PoS staking for investors, the role that Avanti Network could play in the future of Ethereum, and the potential of its staking program to offer users an accessible and high-quality product. This is what they had to say.
Q: For those unfamiliar with Aventus Network, its features, and capabilities, can you tell us more about the protocol? How can people benefit from using it?
A: What began as a blockchain-based ticketing solution to combat ticket fraud has expanded by necessity because of working with publicly listed companies like Live Nation. It has expanded to become a customisable layer-2 blockchain network that lets businesses & dapps build on Ethereum and other chains, at scale, to process transactions at 100x the speed and 1% of the cost.
Everyone knows that Ethereum fees are at an all-time high and scalability is limited to just 13 transactions per second. That’s not enough.
Aventus Network is a layer-2 solution that brings the scale and privacy of a permissioned blockchain with the security and interoperability of public blockchains — with none of the drawbacks of either.
What’s more, since many Ethereum competitors exist, as well as other private / permissioned networks, Aventus builds using substrate, which makes it simple to become a parachain and benefit from full Polkadot interoperability —enabling enterprise layer-2 scale across chains.
Aventus has built a fork of Polkadot’s Substrate to solve real-world issues, building strong relationships with a range of ambitious, high-growth businesses, from ticketing behemoth Live Nation France as reported by Bloomberg and video game content platforms — like fruitlab — to credit card cashback programs — like cashbackAPP.
Now, significant updates to Aventus Network platform architecture will facilitate new NFT partnerships that will reshape and reignite the market.
Creators can now mint NFTs on the Aventus Network mainnet for a fraction of the cost of any other blockchain network. Aventus NFTs are fully compatible with Ethereum NFTs, and therefore can be moved seamlessly from one blockchain to another.
What’s more, unlike other NFT blockchains, the NFT-Manager pallet on the Aventus Blockchain is designed to support Royalties and is directly built into the Blockchain. This ensures that creators who should receive royalties have a provable claim via an immutable ledger, on their royalties.
Q: Aventus Network leverages a Proof-of-Stake based layer, what are its advantages when compared to other networks, especially those supported by a Proof-of-Work consensus algorithm? Do you believe there are improvements in energy consumption and security to the network?
A: According to data from the Cambridge Center for Alternative Finance, Bitcoin mining consumes more energy than Argentina.
However, comparing Bitcoin mining to all other blockchains is like comparing the pollution of oil refineries with garden centres.
Bitcoin uses a highly effective but energy-intensive proof-of-work (PoW) consensus mechanism. PoW is a decentralised consensus mechanism that needs network members to expend enormous effort in solving random mathematical puzzles to maintain network security. It requires enormous amounts of energy which increases as more miners join the network.
Other blockchains, like Aventus Network, use a Proof-of-Stake (PoS) consensus mechanism to secure the network by aligning the network participants’ incentives through complex economic game theory.
This means that malicious actors are economically disincentivized from unethical behaviour as they are required to own and stake a minimum of 51% of the network’s staked coins or tokens to confirm illegitimate transactions.
In doing so, other network nodes are still easily able to spot such malicious behaviour and the bad actor forfeits their entire stake.
When the market cap of projects ranges from a few billion to many billions of dollars, it becomes economic suicide to harm the network.
By skipping the PoW consensus, PoS blockchains reduce energy usage by more than 99%, using just a fraction of the energy compared to bitcoin.
In that sense, PoS blockchain networks can even be a giant leap forward for businesses concerned with green credentials when it comes to any of the aforementioned use cases.
Q: How does the Aventus Validator Program operate? It is necessary to have AVT participate in it, if so, how can users access the token?
A: Using a Proof-of-Stake node validator model, the Aventus Network pays Validators their share of fees from every transaction processed on the node to which they stake their $AVT.
The network relies on AVT holders as Validators who process transactions in return for a fee. The Aventus Network will launch with 10 nodes, each with an equal probability of selection to process transactions (i.e. 10% probability).
Each node will earn fees associated with the processed transactions at a current average of $0.01 per transaction. And each node will have a total stake of 250,000 AVT.
Validator transaction fee rewards are paid in proportion to the amount of AVT a Validator associates with a node. E.g. If a holder owns 25,000 of a node’s 250,000 AVT, they will receive 10% of all transaction fee rewards from that node.
Validators will be able to withdraw their proportional share of transaction fees associated with their nodes on a monthly basis.
Validators will be able to deposit any amount of AVT to any of the 10 nodes using the Ethereum smart contract provided. The smart contracts have undergone a security audit by an independent third party.
The Validator Registration Program is currently 80% full and will close immediately at 100%.
Users can purchase $AVT from Uniswap, Mercatox, or HitBTC and register to stake now at https://www.aventus.io/ecosystem/.
You can find a step-by-step guide on how to stake at https://medium.com/aventus/the-step-by-step-guide-to-the-aventus-validator-staking-program-e3ccf4b47c8e.
Q: What are the requirements to become an Aventus Network validator, and why should users stake their fund with AVT as opposed to a different staking program? For example, why not use ETH and lock it on the ETH 2.0 Deposit Contract for the rewards?
A: There are many staking programs, like the ETH 2.0 Deposit Contract, for example, however, as Aventus staker Blake said, “ I’m very happy with these earnings, you would not see anything like this earning rate at a bank. The staking annual return rate is currently at 11.60%.
The earnings are also on par or better than crypto lending / earning platforms like Nexo etc.
In addition to all this, these staking rewards earned are not diluting your original holdings as Aventus has a fixed supply.
A lot of staking rewards with other projects may offer much higher earning rates but in reality you are not really earning anything as those staking rewards are coming from minting more tokens and adding to the total token supply. So if you saw 100% APY with a project that mints to give out staking rewards then basically after a year if you did not stake you’d be diluted 50%. If you did stake for the full year you would in effect not be diluted as that 100% APY you earn would counteract the dilution so in effect you gain 0 and lose 0.”
Users can choose their preferred token and staking program and could choose to diversify across many.
Q: Since its launch, Aventus Network has consolidated partnerships with important players in the crypto space, can you provide more details as to the newest collaborations onboarding the protocol and how they impact the Aventus Staking Program and its incentives?
A: It’s true, we have partnered with many sizable companies like Live Nation France and had an agreement to process 58m transactions to the network.
Each new partnership adds to the transaction volume and, naturally, to the transaction fees paid to Validators in the staking program.
We have some very exciting new partnerships coming in the NFT space and aim as a network to reach one billion transactions in the next couple of years — which means a lot of fees for stakers.
What’s more, as new partners onboard, they require ownership of the $AVT token too to process transactions, which is exciting for anyone staking to AvN nodes.
Q: In the current inflationary economic outlook, with the CPI recently surpassing 5.3% since August 2020 per the U.S. Labor Department, how necessary is it for investors and people to have access to products capable of offering returns, such as the Aventus Validator Program?
A: Inflation wipes out savings. To combat that and protect one’s wealth, it’s necessary to earn through investments and income programs at a rate that matches or outpaces inflation.
Blockchain projects like Aventus make such programs accessible to almost anyone with some money and an internet connection.
Q: Currently, there are many alternatives blockchains emerging on the back of Ethereum high transaction fees, and network congestion. In this context, is Aventus Network and layer-2 scaling solutions a central part of the survival of Ethereum? Or do you believe the future of public blockchains is interoperable with many inter-connected blockchains offering many use cases?
A: As there is with email service providers, so there will be with blockchains. Gmail users can send emails to hotmail users, Yahoo users etc.
Currently, interoperability and scalability are major concerns in the blockchain space. Multiple blockchains encourage fair competition — a major advantage to decentralisation vs centralisation in that no one has total control.
Ethereum, without improving scalability will suffer under the weight of current demand and subsequent gas fees until it bleeds users into other blockchains and loses its reputation as the network of choice for blockchain building.
Layer-2 solutions like Aventus Network help solve both of these problems by improving scale, reducing fees, and aiding in the march towards interoperability.