Swarm Network Increases Rewards to Node Operators

Earn to Store

With the launch of its storage incentives program in December 2022, Swarm reached a significant milestone in the development of its Network. It is now possible to earn rewards for running a node in Swarm and being a critical participant in the Network’s functioning.

The incentive system has been running smoothly since its launch. Rigorous testing has confirmed the fair distribution of rewards, per the system’s intended design. The next step is the planned increase of the fees pertaining to the use of the Network, which means an increase in the rewards distributed to node operators. It is possible it’ll ensure a roughly 6000x increase in the total earnings for Storers, to better match the market values of the services. 

By valuing decentralization, the Network is now self-sustainable, where all actors are incentivised to use Swarm over and alongside other solutions.

Playing the Schelling Game

Swarm’s incentivization model works with a simple but effective principle—Uploaders pay, Storers earn. This ensures optimum utilization and availability of storage resources on the Network. 

Redistributing the storage fees among storers is one of the protocol’s key functions. Swarm ensures complete fairness and fault tolerance to this end by implementing the Schelling Game. 

As Daniel Nagy, the VP of Swam Foundation, says: “It follows the logic that if node operators want to earn rewards for storing data, they need to regularly prove their storage, while staking some BZZ, to insure that they are being honest about their claim.”

The Schelling Game is similar to ordinary Proof-of-Stake (PoS) consensus mechanisms. Briefly put, the algorithm randomly selects a “neighborhood” of nodes—i.e., those storing the same content—and requires them to achieve consensus. The nodes’ shared content is the input for this process, meaning that honest calculations must necessarily return the same results.

An on-chain redistribution contract randomly allocates the rewards to one of the honest nodes at the end of each round. The probability of being rewarded increases with the node’s staking amount. Currently, 10 BZZ token is the minimum staking amount for storage nodes to be eligible for redistribution. Notably, this stake may be frozen (and eventually slashed) if nodes misbehave, act maliciously, or fail to achieve consensus with their neighbors. 

The winning node in each round receives the entire pot of storage rent collected since the last distribution. With the latest update, the overall rewards for storage node operators, increases by 6000x.

The storage cost for uploaders—i.e., the rent—will also increase following this update. 

What’s next for Swarm?

By identifying areas of needs within the decentralized data space and systematically addressing them, after more than half a decade of thorough research and development, Swarm distinguishes itself from other solutions through its innovative and multidimensional approach. The loyal community, flourishing ecosystem, and the public, each have their reasons to adopt Swarm: financial rewards of node operators; ease of use of the gateways and light nodes, sophistication and highest programming standards met by the codes, clean protocol architecture, cypherpunk values of the project, are some of the many selling points of this Network. 

The Swarm Network is now ready to exponentially grow. To access the network and upload content, run the desktop app. To provide storage and earn rewards, you can run a full node. Interested to find out more? Exchange and interact with the Swarm community on Discord.

This post is commissioned by Swarm and does not serve as a testimonial or endorsement by The Block. This post is for informational purposes only and should not be relied upon as a basis for investment, tax, legal or other advice. You should conduct your own research and consult independent counsel and advisors on the matters discussed within this post. Past performance of any asset is not indicative of future results.