Learning the basics

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Learning the basics
For general holders of coins or tokens across the industry, governance is often seen as something inaccessible and complex. This is because education about governance is often lackluster. At cheqd, we want to make participating in governance easy.
🧑⚖
🧑⚖ Introduction to Governance
🪙
Introduction to cheqd
☄
Introduction to Entropy
Frequently asked questions for Governance:
1.
What is a Validator or Node Operator?  

The terms Validator and Node Operator are synonymous. Validator is the term used more commonly in the Cosmos documentation. In blockchain ecosystems, the Node Operator runs what is called a node. A node can be thought of like a power pylon in the physical world, which helps to distribute electricity around a wide network of users. Without these pylons, electricity would be largely centralised in one location; the pylons help to distribute power to entire wide-scale populations. And if one pylon fails, the grid is set up to circumvent this pylon and re-route the electricity a different route. Similarly, in blockchain infrastructure, each node runs an instance of the consensus protocol and helps to create a broad, robust network, with no single points of failure. A node failing will have no impact on the Network as a whole.  

2.
What does staking mean?  

Stake is the amount of tokens a Node Operator puts aside and dedicates to cheqd, in order to contribute to governance and earn rewards. cheqd is a Proof of Stake Network. This means that rewards can be earnt in direct correlation with the amount of stake a Node Operator holds.  

3.
What does it mean to have bonded tokens?  

In order to participate in governance, Users need to bond their tokens to a Node Operator. Users with bonded tokens are known as Participants. This is a beneficial arrangement for both the Participant and the Node Operator. The Participant may not be interested in voting on the Network, or may be busy, and in this instance the Node Operator can cast a vote on behalf of the Participant. Bonded tokens from Users add to the stake of Node Operators. If the vote is accepted, the Node Operator may receive rewards in proportion to how many tokens it has staked. A percentage of these rewards can be distributed to the Users as a commission.

4.
Can Participants earn tokens?  

In short, yes. Participants may be eligible for a percentage of the rewards that Node Operators earn during the course of running a node. Node Operators may offer a certain commission for bonding to them. These rewards may come in two forms:

1.
Transaction fees  

Read and writes to the cheqd Network incur what is known as a transaction fee, which is a calculated based on gas. Gas may be higher when there are high transaction volumes on the Network, and vice versa. Node Operators may also set their own gas prices, above which they are considered in the pool of who creates that transaction block. However, we will not get into the nuances of gas here.  

2.
Block rewards

Block rewards depend on inflation. Inflation is the gradual increase in the number of tokens on the Network. A Node Operator may earn block rewards during a period of inflation, which can be disseminated to the Users bonded to the Node Operator.

For this reason, it is suggested that token holders bond and delegate their tokens, to create a healthy Network and earn passive income.


5.
What if I want to vote unilaterally, without a Node Operator/Validator?  

If you are particularly interested or passionate about a specific governance proposal, or do not agree with your bonded Node Operator, it is absolutely possible to vote unilaterally. However, you must still be bonded to a Node Operator to do so. To do this, follow the instructions in the section Voting on cheqd.

6.
Is my choice of Node Operator important?  

Yes, your choice of bonded Node Operator is very important. You should be mindful about what reputation the Node Operator has. This is because the Node Operator may use your votes against the best interest of yourself and the community. Furthermore, the Node Operator might exhibit bad behaviour on the Network and have some of its stake slashed. Slashing means taking stake away from the Node Operator and adding it to the Community Pool. This may involve those who have bonded and delegated tokens to have their tokens slashed as well.  

7.
Is it possible to unbond from a Node Operator?  

Yes, is possible to instantly redelegate to a new Node Operator or unbond your tokens. You cannot 'hop' between Node Operators quickly however. You must complete your redelegation to a Node Operator before moving again. If you want to completely withdraw and unbond your tokens, you need to be mindful that this process takes 3 weeks for the tokens to become available for use again. 

This 3 week unbonding period is an example of a parameter which can be adjusted by the Governance Framework process. 
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🧑⚖ Introduction to Governance
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Frequently asked questions for Governance: