ZenIP 42206 Explained: Redirect Horizen Secure Node Rewards into Horizen EON

Better utilizing Horizen block rewards to enhance the security of EON network and drive greater growth for the Horizen ecosystem

HCC has recently submitted ZenIP 42206 which proposes redirecting the portion of the Horizen mainchain block reward currently paid to Secure Nodes to an EON Forger Subsidy Fund. 

The purpose is to drive the success of the Horizen EON network by increasing the security and decentralization of the network. 

Why Should We Make This Change?

The Horizen main blockchain currently has a block reward that’s paid toward 4 different entities:

• Miners (60%)
• Horizen Treasury (20%)
• Super Nodes (10%)
• Secure Nodes (10%)

Secure Nodes are No Longer Needed and Currently Causing A Burden

This allocation structure was created prior to Zendoo’s implementation. Zendoo has increased the requirements of mainchain nodes so that the Secure Node minimum requirements are no longer sufficient to provide any benefit to the Horizen chain. Furthermore, with the removal of the shielded pools on mainchain, the need for Secure Nodes is diminished. The subpar performance and the lack of usage of Secure Nodes pose a burden to the chain.

There is a Strong Need for Forger Nodes in EON

Meanwhile, there is a strong need for forger nodes in Horizen sidechains for enhancing the security of the network, and for decentralization. The current Secure Node operators are well-equipped to provide this type of support. 

The Timing is Right to Optimize the Allocation of Horizen’s Block Reward

Therefore, it’s necessary to update and optimize the allocation of Horizen’s block reward to reflect and better support recent developments of the project – the current Secure Node reward can be put to better use securing and supporting the EON network.   

What Will This Change Entail?

A number of things will happen:

1. There will be a DAO-controlled address called “EON Forger Subsidies” set up on both EON and the Horizen blockchains. 
2. The 10% of the block reward currently paid to Secure Nodes will be redirected to the “EON Forger Subsidies” address on the Horizen mainchain, and held there until both of the following are true: 
   • Forging on EON becomes open to the public
   • A mechanism to automatically forward transfer 10% of the block reward to the EON chain’s “EON Forger Subsidies” address has been added to the mainchain
3. After the automated forward transfer is set up, there will be an automated distribution of funds based on block forging, with an equal amount of ZEN paid out for each EON chain block forged.
4. All block subsidies will be distributed at the end of each Sidechain Consensus Epoch.
5. The Secure Node tracking service will be deprecated
6. Secure Nodes operators will no longer be eligible to receive block reward allocations but will have the option to choose to migrate to EON to be eligible for forging subsidies.

The following are more FAQs to address the questions we have received from the community

Q: Why redirect Secure Nodes instead of Super Nodes?

A: We’ve said from the early days of Horizen that we wanted to dedicate Super Nodes to a special purpose in the Horizen ecosystem. We want to maintain that goal and reserve Super Nodes for a higher value potential use in the future. Furthermore, unlike Super Nodes, the Secure Node hardware requirements are no longer sufficient to support their function on the Horizen mainchain and are causing a burden to the blockchain. 

Q: Will Secure Node operators be able to become node forgers for EON and continue to earn rewards?

A: Yes! Anyone who wants to support the EON network and get rewarded can participate. 

Q: How do I become an EON node forger and what are the requirements?

A: Participants who want to run EON forger nodes would have to set them up. Instructions on how to do so and the requirements are forthcoming.

Q: How much reward the EON forgers will be able to earn?

A: We cannot estimate the exact reward amount at this moment.

What’s Next?

ZenIPs are for the community to approve or decline. Please join the conversation and make this decision with us. We will be hosting a series of town halls on Discord to have live conversations about this decision, but we recognize that it can be difficult to match global time zones. So to ensure that we can include everyone, we will be recording a new episode of the Beyond the Horizen podcast with our co-founder Rob Viglione. We will collect your questions and feedback for the podcast in the coming days. There will also be a community poll to collect votes from the community, please stay tuned. 

We highly encourage you to read the full ZenIP on GitHub to get a complete understanding of what this means. We also hope to see you all join the discussion on the #zenip channel on our Discord server.