Direct communication with the Validators, along with a mandatory minimal technical due-diligence process, enabled a stable network for applications, while the permissionless Guardian role allowed the PoS ecosystem to flourish.

Orbs V2: The Age of Guardians, unified the Validator and Guardian roles. Orbs Guardians represent the Orbs community; they maintain the security of the network and they invest time and effort in the network's success. As the most significant stakeholders in the network, they are most suitable to provide applications developers the required security and availability.

Orbs V3: Multi-chain Staking, expanded the Orbs PoS Universe to Polygon, utilizing the Ethereum stack to its fullest potential: The security of Ethereum as the base layer, and the scalability & low fees of Polygon as L2.

The Orbs Universe provides community members that are not constantly active an opportunity to contribute to the network by delegating their stake to Guardians. Therefore, when a Guardian operates a validator node and signs a block, it is backed not just by the Guardian’s own stake, but also by the stake delegated to him. The delegated stake significantly increases the amount of stake that backs the network security and therefore increases applications' trust in its operation. Moreover, the delegated stake plays an important role in preventing network attacks. An attacker that wishes to gain control of the network for a short period of time and act maliciously will need to possess more stake than the current network Guardians and their community in order to be elected.

Providing the Guardians with the ability to set the level of rewards that will be distributed to their respective Delegators tightens their relationships with their communities. Staking rewards are set by the Guardians, who determine how to split the rewards amongst their Delegators, while a minimum rate of compensation to Guardians is imposed by the protocol.

Guardians play an important role in the reward distribution process. In V2, an automated mechanism to set the level of rewards that will be distributed to their Delegators was enabled at the protocol level and featured as part of the updated Guardian interface. The mechanism calculates the amount of rewards that each of the Guardian’s Delegators is entitled to, based on the Delegators’ stake over time and the allocated ratio. An annual reward equal to 10% of total delegated stake is awarded, addressing the tradeoff between an appealing award and sustainable inflation (see Rewards). 1⁄3 of the rewards are guaranteed to the Guardians (i.e., 3.33% for a full year of staking), while the default values for the distribution application grant the remaining 2⁄3 to Delegators (i.e., 6.66% annual reward maximum). The new automated tool allows the Guardians to modify the Delegators’ rewards split.

This optimized reward distribution architecture provides a scalable and gas-efficient reward distribution that occurs through the protocol itself. Under this system, once the level of distributions is set by the Guardians, the respective rewards are distributed by the protocol directly to both the Guardians and the Delegators, on a continuous basis. Delegators and Guardians can then decide when they wish to claim their reward tokens.

This has multiple important benefits such as added flexibility to the Guardians and Delegators, who may claim the staking rewards at any point in time, significant reduction in costs for Guardians, and more.

To learn more about the distribution mechanism, read the documentation​ on GitHub.

ORBS token, staking, delegation and voting already operated during V1 over Ethereum contracts, utilizing Ethereum’s value as an objective auditor. In V2, the Orbs platform’s architecture was updated to run the core of the election logic on Ethereum. The entire election logic, reward calculation and distribution are carried out using Ethereum contracts, providing multiple advantages.

First, it provides a high level of transparency, in particular to light clients. Orbs clients rely on the elected set of validators as the foundation on which applications’ data correctness is based. The ability of any application running on top of Orbs to validate the elected validators set by a simple light client, with no need to constantly audit the election process and PoS logic, is of high value to business applications.

Second, as the token, the subscription payments and the staking are performed on Ethereum, a valid state of the elected validator nodes set on Ethereum is required for full automation of Orbs fees and rewards distribution.

Third, the PoS over PoW architecture provides additional security to the network. The use of two networks allows the Orbs Network to enjoy the aggregate protection of the combined networks, as any attacker would be required to incur the costs of attacking them both. Specifically, using Ethereum, which has a robust ecosystem whose participants are, in large part, impartial regarding what happens on the Orbs Network, makes it difficult for an attacker to exploit Ethereum to launch an attack on Orbs. The security advantages of this architecture manifest in a variety of ways. For example, it provides a measure against long-range attacks, in which the attacker creates an alternative chain starting with the same genesis block that is indistinguishable from the valid chain, and then misleading users to use the malicious chain. PoS architectures are susceptible to long-range attacks because there is no extra cost to creating long chains, unlike in PoW chains, where creating a long malicious chain would involve intensive computational resources. Thus, PoS typically requires applications to audit all the network traffic in order to validate the current PoS state. Orbs’ architecture avoids this problem by taking advantage of the security provided by Ethereum.

Finally, the use of this hybrid architecture ensures the integrity of elections on Orbs, since the Orbs Guardians are not entrusted to process their own election. Processing the elections on the Ethereum network provides an external guarantee that the Orbs Guardians cannot manipulate the election process.

Orbs V3: Multi-chain Staking, expanded the Orbs PoS Universe to Polygon, utilizing the Ethereum stack to its fullest potential: The security of Ethereum as the base layer, and the scalability & low fees of Polygon as L2.

As part of PoS V3, the full suite of Orbs PoS Solidity contracts have been deployed to Polygon mainnet. This includes the Orbs Staking Contract, the contract calculating delegations and emitting committee results and the contract distributing staking rewards.

As a result, Guardians are now able to support both networks and receive delegations on both Ethereum and Polygon. Similarly, Delegators can decide on which network they want to stake their tokens - Ethereum or Polygon (or both). Since the existing Ethereum mainnet smart contracts remain intact, ORBS can still be staked on Ethereum like before. Both networks pay the same staking rewards and have the same unstaking cooldown period, but gas is cheaper on Polygon so all actions on Polygon will require a fraction of the cost in fees.

The first and main committee is the General committee. It comprises the top 22 Guardians with the most delegated stake, whether they have been certified or not. The General committee represents the vast majority of ORBS stake and therefore provides a high quality operation suitable for most applications.

In contrast, the Certified committee includes only Guardians who meet certain requirements and have undergone a certification process that includes providing certain identification information. The Certified committee provides a suitable solution for developers with regulatory restrictions that are interested in running applications on a blockchain. Developers may also choose initially to use the Certified committee to reduce friction and transition to the General committee over time.

The fees and rewards in the Orbs PoS architecture serve two important purposes. The first is compensation for operating a validator node. The second is a reward for contributing to network security by staking. The reward model is targeted to award the ones who deserve it - participants that contribute to the network operation and security.

Operating a validator node has a cost that includes both computational resources cost and operations cost. Two forms of compensation are designed to cover these costs. First, Virtual Chain fees are paid in the form of Orbs Tokens by the network users who launch a virtual chain. The fees paid for each Virtual Chain are expected to represent the cost with a profit margin. As the network matures and runs more Virtual Chains, the cost per Virtual Chain is expected to be almost constant, representing the cost of the computational resources allocated to the Virtual Chain.

This suggests a scalable solution, as the Guardians’ rewards increase as the usage increases.

In order to incentivize Guardians to participate in the Certified committee by covering their costs, we included an additional bootstrap fund for Guardians who join the Certified committee. This fund is distributed in DAI, pegged to USD, popular in many DeFi applications. It provides profitability even if the token value fluctuates. Furthermore the fund is designed to cover the cost of operating a validator node while running a small number of Virtual Chains during the network early stages. This is important as it provides developers with the ease of mind that the network will continue to operate even under unexpected price fluctuations.

A Guardian that operates a validator node and goes through the certification process to participate in the Certified committee will be entitled to receive the annual total of 3000 DAI. This fund provides an incentive for Guardians to participate in the Certified committee, thus increasing the participating stake in this committee and making the network more attractive to app users, while covering the reduced cost of operation as further described in the next episode.

Virtual Chain fees and the bootstrap fund are awarded for the operation of validator nodes by Guardians. Therefore, unlike staking rewards, the fees and the bootstrap fund are distributed directly to the Guardians operating the validator nodes. The fees and the bootstrap fund are not staked or shared with the Delegators, allowing the Guardians to utilize them to cover their costs. The fees and the bootstrap fund are awarded for the time period that a Guardian participates in the applicable committee. Once awarded, the rewards can be claimed by the Guardian at any time.

Staking rewards are awarded for the stake that elected Guardians and their Delegators allocate to contribute to the network security. It is important to note that ​Only the top 22 elected Guardians are eligible for the rewards, fees and bootstrap funds.

An annual reward equal to 10% of total delegated stake is awarded, addressing the tradeoff between an appealing award and sustainable inflation. 1⁄3 of the rewards are guaranteed to the Guardians (i.e., 3.33% annual reward for a full year of staking), while the default values for the distribution application grant the remaining 2⁄3 to Delegators (i.e., up to 6.66% annual reward maximum).

Below is a list of the the key improvements in terms of efficiency and cost reduction:

• Operation cost is significantly reduced.
• For AWS-deployed nodes: a base infrastructure monthly cost reduction, with options to reduce the cost further by reserving resources in advance.
• An elastic architecture that leverages cloud architectures and enables compute and storage resources allocation as needed for the network use.
• Transition to EFS/NFS-based block storage architecture, significantly reducing the storage cost and providing more flexible resource sharing among Virtual Chains, while maintaining the Virtual Chains isolation.
• Utilizing light Ethereum client architecture to reduce the cost of the Ethereum service operation.
• Automatic and simple node setup, with enhanced logging and monitoring tools for reduced operations overhead.

Orbs’ ​Locking Mechanism​ (providing a 14-day cool-down period for unstaking) enhances the stability and security of the Orbs Network. In addition, the Orbs team developed TETRA​, a dedicated staking wallet, from which any ORBS holder can easily stake tokens with a Guardian of their choice. Both improvements were widely adopted by the Orbs community.

Moreover, Orbs PoS assists in reducing friction for Delegators by allowing for an easy transition of delegation between Guardians through the new staking contract. Delegators can now easily modify their stake between the various Guardians using the new Tetra Wallet, without the need to unstake first.

Token holders that delegate to an active Guardian are rewarded in proportion to their stake. Only delegation to an active Guardian that operates a validator node receives rewards. A Guardian that does not fulfill its responsibilities can harm the network and will cause its Delegators to lose their rewards. Therefore, it is imperative for Delegators to monitor their Guardians and make sure that they are fulfilling their responsibilities. The new features described above enable Delegators to efficiently stake to their chosen Guardian, or switch Guardians if necessary, thus helping them fulfill their important role in making the network safe and efficient.

Orbs’ rewards assignment and distribution architecture provides Orbs Delegators with an additional level of confidence and predictability for their rewards allocation. Under this architecture, staking rewards are distributed directly to the Orbs Delegators on a continuous basis. This continuous reward assignment allows both Guardians and Delegators to control the rate at which they claim their rewards. Under the new architecture, a Participant can claim their rewards by sending a claim transaction to the contract. This may be done using the Tetra staking interface. As the claim transaction has a gas cost, Delegators may initiate these transactions based on their need and the current gas price, which fluctuates heavily.

Following the Orbs PoS V3 release, Orbs Delegators have the ability to choose between staking on Ethereum and staking on Polygon, based on their own personal preferences and considerations.