# 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. *** ### **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**](/documentation/mosaic-chain/architecture-and-technology/actors-validators-and-delegators/pos-validators.md) validate using ONLY their Validator NFT's nominal value * [**DPoS Validators**](/documentation/mosaic-chain/architecture-and-technology/actors-validators-and-delegators/dpos-validators.md) can add MOS coins on top of their NFT's nominal value and accept delegations * [**Delegators**](/documentation/mosaic-chain/architecture-and-technology/actors-validators-and-delegators/delegators-stakers.md) stake MOS coins (and optionally Delegator NFTs) to DPoS validators *** ### **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 *** #### **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 *** ### **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. *** ### **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 *** #### **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 *** #### **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. *** #### **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 *** ### **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 *** ### **Learn More** **Understand the participants:** * [Actors (Validators & Delegators) →](/documentation/mosaic-chain/architecture-and-technology/actors-validators-and-delegators.md) - Learn about the three participant types * [PoS Validators →](/documentation/mosaic-chain/architecture-and-technology/actors-validators-and-delegators/pos-validators.md) * [DPoS Validators →](/documentation/mosaic-chain/architecture-and-technology/actors-validators-and-delegators/dpos-validators.md) * [Delegators (Stakers) →](/documentation/mosaic-chain/architecture-and-technology/actors-validators-and-delegators/delegators-stakers.md) **Technical details:** * [Staking →](/documentation/mosaic-chain/architecture-and-technology/staking.md) - How staking works in detail * [Slashing & Auto-Chilling →](/documentation/mosaic-chain/architecture-and-technology/slashing-and-chilling.md) - Penalties and protections * [Delegated Proof of Stake (DPoS) →](/documentation/mosaic-chain/architecture-and-technology/consensus-dpos.md) - Consensus mechanism overview --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. 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