Vega - Network Overview

Post preview image

Secured around a PoS consensus mechanism, Vega is a novel project designed for developing and trading quality derivative products on a decentralised network.

Current Network State

Traditional centralised financial markets have left us paralysed. Traders and investors have no choice other than giving full trust to third parties who fix high costs and stifle innovation by controlling what markets and products can be traded.

The Vega network works to solve these shortcomings by improving access to a decentralised derivative trading network, cutting out the middleman and redistributing control back to the community. With Vega, anyone will be able to propose the markets they want to trade, and they will be approved for creation if they pass through governance. These markets will be:

  1. Backed by optimal liquidity incentives to attract market-making resources.
  2. Supported by a risk management system to ensure safe trading.
  3. Allowing collateralization with multiple crypto-assets.

Through the use of its permissionless and agnostic proof of stake network, VEGA is bringing efficient trading of derivative products (comparable to centralised exchanges) to the DeFi ecosystem.

Token Allocation

VEGA raised  ~$11 million from over 26 backers, including Arrington, Pantera, Cumberland, KR1, Hashed, and Coinbase Ventures.

Symbol: VEGA
Type: ERC20 token which interacts with the VEGA blockchain via a Ethereum-to-Vega bridge
Current Market Cap:  ~$34,000,000
Current Circulating Token Supply: ~1,600,000 VEGA
Total Token Supply: 64,999,753 VEGA

The initial token allocation and current token distribution looks as follows:


VEGA Token Utility

Each VEGA token will give rights to participate in governance and staking.

VEGA token holders will have the opportunity to propose and vote on 1) new markets on the VEGA protocol and 2) governance changes on rewards distribution policies, review fee prices, and the behaviour of the network.

Staking is the mechanism used to secure the network. It is the process of holding coins/tokens (stake) in order to earn rights to participate in the "validation" of new blocks, and in doing so "delegators" are compensated with rewards. Token holders can “delegate” their VEGA tokens rights to Validators. The more stake one has, the more influence they hold. Delegators are therefore incentivised to delegate to a Validator that acts according to the best interests of the network as a whole.

VEGA Staking Economics:

Vega started in 2018 and will be launching their Restricted Mainnet soon - enabling governance and staking of both unlocked and locked VEGA tokens. The core functionality of Vega will be introduced by a governance vote once the network is running smoothly and the functionality to enable trading is well-tested.

Vega uses a Delegated Proof of Stake BFT-style consensus protocol. Token holders can “delegate” their VEGA tokens to the validators they wish. Validators will validate blocks of transactions on their behalf, earn rewards proportionally to the represented stake, and the network will redistribute it to their delegators after deducting a fee for the service they provide. There are two variables that define the staking rewards APR: the amount of tokens in the network assigned for rewards (AKA the reward pool), and how many VEGA tokens are currently staked. The estimated APR will be released shortly after the network launches when these variables will be known.

These rewards will derive from two different places:

1) A percentage of the infrastructure fee - fees that are charged on trades executed on the platform.
2) From the on-chain treasury.

The amount of rewards received will be voted by the community where an equilibrium between desiring high fees and lowering fees to attract demand should be reached.

Initially, 13 validators (P2P Validator being one of them) will be in charge of the validation of new blocks. To promote decentralisation, Vega have implemented a non-whaling scheme. Rewards will not grow further beyond a maximum stake that will be imposed on validators. Delegators therefore have an incentive to delegate to validators with a stake below this threshold as doing so will lead to higher rewards per token.

Users that want to contribute to the stability and security of the Vega Network without the complexities associated with the management of being a validator can delegate stake and earn staking rewards.

Slashing Risk

Vega does not plan to implement slashing. However, validators will not receive rewards if they do not validate the blocks assigned to them and the community will punish validators who misbehave by undelegating their stake. Further punishments could be implemented if needed, such as retaining rewards generated. If it turns out to be insufficient, the community can always vote to implement further measures.

Useful VEGA resources

About P2P Validator

P2P Validator is a world-leading non-custodial staking provider with the best industry practices and proven expertise. We provide comprehensive due-diligence of digital assets and offer only high class staking opportunities securing more than 4 billion of USD value.

At the time of the latest update, P2P Validator is trusted by over 10,000 delegators across 25+ networks. We are a major player in all networks we support because of our experience, commitments and our reputation. We pay special attention to the process of governance.

Want to stake VEGA with us? Visit https://p2p.org/vega to find out more about Vega staking and our special offer.

If you have any questions, feel free to join our Telegram chat, we are always open for communication.

Subscribe to P2P-economy

Get the latest posts delivered right to your inbox

Read more