# NFT-Based Validator System

Mosaic Chain introduces a revolutionary approach to blockchain validation: **NFTs grant permission rights AND provide stake through their nominal value.** This makes validator rights transparent, transferable, and tradable—while keeping economic security tied to the NFT's value.

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### **Permission + Stake: How It Works**

Traditional blockchains lock validator rights to specific accounts or require massive capital to participate. Mosaic Chain uses NFTs as both permission and stake:

**Validator NFTs = Permission + Base Stake**

* Grant the right to run a validator node and produce blocks
* Have a **nominal value** that serves as your stake
* Transferable and sellable on secondary markets
* Subject to slashing (0.1% per event reduces nominal value)

**MOS Coins = Optional Additional Stake (DPoS only)**

* DPoS Validators can stake MOS coins in addition to their NFT's nominal value
* PoS Validators stake ONLY via their NFT's nominal value (cannot stake MOS coins)
* Delegators stake MOS coins to DPoS validators

**Key insight:**

* [**PoS Validators**](https://docs.mosaicgalaxy.io/documentation/mosaic-chain/architecture-and-technology/actors-validators-and-delegators/pos-validators) validate using ONLY their Validator NFT's nominal value
* [**DPoS Validators**](https://docs.mosaicgalaxy.io/documentation/mosaic-chain/architecture-and-technology/actors-validators-and-delegators/dpos-validators) can add MOS coins on top of their NFT's nominal value and accept delegations
* [**Delegators**](https://docs.mosaicgalaxy.io/documentation/mosaic-chain/architecture-and-technology/actors-validators-and-delegators/delegators-stakers) stake MOS coins (and optionally Delegator NFTs) to DPoS validators

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### **Two Types of Validator NFTs**

#### **PoS Validator NFT**

Grants permission to validate solo without accepting delegations.

**Characteristics:**

* ✅ Stake only via the NFT's nominal value
* ❌ Cannot stake MOS coins
* ❌ Cannot accept delegations from others
* ✅ Keep 100% of rewards
* ✅ Simpler operation, full control

**Best for:** Independent operators who want solo validation

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#### **DPoS Validator NFT**

Grants permission to validate and accept delegations from others.

**Characteristics:**

* ✅ Stake via the NFT's nominal value
* ✅ Additionally stake MOS coins
* ✅ Accept delegations (MOS coins + Delegator NFTs)
* ✅ Earn block rewards + commission from delegators
* ✅ Maximum flexibility and earning potential

**Best for:** Professional validators seeking to maximize staking power

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### **Delegator NFTs (Optional for Stakers)**

Delegator NFTs are optional assets that allow holders to stake their nominal value to DPoS validators.

**Key features:**

* **Nominal value** - Represents a fixed MOS equivalent (e.g., 1,000 MOS)
* **One validator per NFT** - Each Delegator NFT can only be staked to one validator at a time
* **Expiration period** - Approximately **12-24 months of validity from binding**
* **Transferable** - Can be sold or transferred on secondary markets

**Why use Delegator NFTs?**

* ✅ Transferable staking rights
* ✅ Known expiration date (clear commitment timeline)
* ✅ Secondary market for staking positions
* ✅ Alternative to staking liquid MOS coins

**Important:** You don't need a Delegator NFT to stake. Anyone with MOS coins can stake directly to DPoS validators.

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### **Binding & Unbinding NFTs**

#### **Binding a Validator NFT**

When validators bind their Validator NFT:

* ✅ Commit to being online and producing blocks
* ✅ Participate in consensus and earn rewards
* ❌ Cannot sell or transfer the NFT while bound

**Requirements to bind:**

* Own a Validator NFT (PoS or DPoS)
* Run a validator node installed with Validator OS and maintain uptime

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#### **Unbinding a Validator NFT**

Validators can unbind their NFT only if:

1. ✅ Already chilled (voluntarily gone offline)
2. ✅ Not selected into the current or upcoming active set
3. ✅ All staking contracts have ended 

**Once unbound:**

* ✅ NFT can be sold or transferred
* ❌ Cannot produce blocks or earn rewards until bound again

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#### **Binding a Delegator NFT**

When delegators bind their Delegator NFT to a validator:

* ✅ Delegate the NFT's nominal value to that validator
* ✅ Accept the validator's commission rate

**Expiry starts on first binding** - The validity period begins when the NFT is first staked.

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#### **Unbinding a Delegator NFT**

Delegator NFTs can be unbound:

* ✅ **Manually** - After the minimum staking period ends (28+ days)
* ✅ **Automatically** - When the NFT expires (after \~12-24 months)

**After unbinding:**

* ✅ NFT can be sold or transferred
* ❌ Expired NFTs cannot be re-staked

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### **Why This Design Is Revolutionary**

Mosaic Chain's NFT-based validator system offers unique advantages:

**1. Democratizes Validation**

* Anyone can buy a Validator NFT and start validating
* No need to be an early adopter or hold massive capital
* Validator rights are accessible and transparent

**2. Transparent and Verifiable**

* All NFTs are visible on-chain
* Nominal values, expiration dates, and history are public
* No hidden validator requirements

**3. Enables Flexibility**

* PoS Validators for solo operators
* DPoS Validators for delegation-seeking professionals
* Delegator NFTs for time-limited staking commitments

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### **Learn More**

**Understand the participants:**

* [Actors (Validators & Delegators) →](https://docs.mosaicgalaxy.io/documentation/mosaic-chain/architecture-and-technology/actors-validators-and-delegators) - Learn about the three participant types
* [PoS Validators →](https://docs.mosaicgalaxy.io/documentation/mosaic-chain/architecture-and-technology/actors-validators-and-delegators/pos-validators) 
* [DPoS Validators →](https://docs.mosaicgalaxy.io/documentation/mosaic-chain/architecture-and-technology/actors-validators-and-delegators/dpos-validators) 
* [Delegators (Stakers) →](https://docs.mosaicgalaxy.io/documentation/mosaic-chain/architecture-and-technology/actors-validators-and-delegators/delegators-stakers) 

**Technical details:**

* [Staking →](https://docs.mosaicgalaxy.io/documentation/mosaic-chain/architecture-and-technology/staking) - How staking works in detail
* [Slashing & Auto-Chilling →](https://docs.mosaicgalaxy.io/documentation/mosaic-chain/architecture-and-technology/slashing-and-chilling) - Penalties and protections
* [Delegated Proof of Stake (DPoS) →](https://docs.mosaicgalaxy.io/documentation/mosaic-chain/architecture-and-technology/consensus-dpos) - Consensus mechanism overview