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Societal will use Substrate to create its own highly specific blockchain
The Societal blockchain will be built as an application-specific blockchain, built to facilitate the creation and management of digitally-native communities to the highest standard. Since Societal has its own blockchain, it is not constrained to the limitations of building on another chain (i.e. Ethereum).
Societal will use a block production mechanism based on the Polkadot Nominated Proof-of-Stake model. The network will consist of collators and validators, where collators maintain the Societal parachain and produce state transition proofs to the relay chain validators.
The Societal collators will maintain the Societal parachain by aggregating transactions into block candidates and producing state transition proofs for validators based on those blocks. The collators will maintain a full node of the Societal parachain and the Polkadot relay chain. This is to ensure that the collators have all of the necessary information to be able to create new blocks and execute transactions.
To become a collator, candidates will need to bond a minimum amount of stake to be considered eligible as a collator. Only a certain number of collators with the most amount staked will be selected in the active collator set. The total amount staked by the collators will be a combination of self-bonded and delegated stake. Once a collator is selected to be in the active set, they will then be eligible to produce blocks. If a collator is not selected to be in the active set, they will remain in the candidate pool until selected or they remove themselves.
When a block is produced for the Societal parachain, the network will issue a certain amount of Societal tokens as rewards. The amount of tokens produced for the rewards will be determined by the inflation rate of the network. Part of each block reward goes directly to the collators that produced the block, which is payment for running the node. The rest of the reward pool is then split with the collator and delegators, who receive rewards based on their percentage of total stake. Through this manner, token holders are incentivized to stake their tokens with collators to earn rewards and help secure the network.
Block rewards will be distributed in the following manner:
Collators that produce blocks that are not finalized by the relay chain will not receive rewards for that block.
If a collator misbehaves, such as going off-line, double signing, etc., they will be punished by losing a percentage of their stake, also known as slashing. Both the collator and the delegators of the collator will be fined a certain amount based on their actions. This is why delegators should perform careful due diligence on collators before delegating any stake.