How is Symbol (XYM) coin generated?

In the Symbol blockchain, block harvesting, integral to the Proof-of-Stake consensus algorithm, drives the generation of new XYM coins, with validators who stake more XYM having a higher chance of creating blocks and earning rewards.

Dec 09, 2024 at 07:15 pm

Understanding the Mechanisms behind Symbol (XYM) Coin Generation

1. Introduction to Symbol (XYM) Blockchain

Symbol (XYM) is a blockchain platform designed to revolutionize data management and transaction processes within business ecosystems. Unlike typical cryptocurrencies focused solely on monetary transactions, XYM emphasizes secure and efficient data exchange, enabling businesses to streamline operations and foster collaboration.

2. Primary Coin Generation Method: Proof-of-Stake (PoS)

Symbol employs the Proof-of-Stake (PoS) consensus algorithm, a more energy-efficient and secure alternative to Proof-of-Work (PoW). In PoS, validators stake their XYM coins to participate in the consensus process. Validators are randomly selected to verify and validate transactions, earning rewards in the form of newly minted XYM coins.

3. Block Harvesting: The Root of Symbol's Coin Generation

Block harvesting is a key aspect of the PoS consensus algorithm. Validators continuously monitor incoming transactions and attempt to bundle them into blocks. The validator who successfully collects enough transactions to form a block broadcasts it to the network. If the block is valid, it is added to the blockchain, and the validator receives a reward.

4. Significance of Block Harvesting for XYM Coin Generation

The probability of a validator being selected to verify and validate a block is proportional to the number of XYM coins staked. This means that validators with larger stakes have a higher chance of generating new blocks and earning rewards. Thus, block harvesting is the primary mechanism by which new XYM coins are generated.

5. Block Harvesting Staking Requirements

To participate in block harvesting and earn XYM staking rewards, validators must maintain a minimum balance of 10,000 XYM in their consensus wallet. Additionally, they must run a full Symbol node and connect to the Symbol network.

6. Staking Pools for Increased Earning Potential

Individual validators with smaller stakes can join staking pools to increase their chances of earning rewards. By pooling their stakes with other validators, they can achieve a larger virtual stake and enhance their probability of being selected to harvest blocks.

7. Tokenomics of Symbol (XYM)

The total supply of XYM coins is capped at 8.99 billion. Approximately 6.1 billion XYM were distributed during the initial coin offering (ICO) in 2020. The remaining coins are allocated for ecosystem development, rewards, and other purposes.

8. Role of XYM Coin Generation in Network Governance

XYM coin holders play a crucial role in the governance of the Symbol blockchain. They can participate in the Symbol council elections to choose representatives who make decisions about the platform's development and direction. Additionally, coin holders can vote on proposed changes to the blockchain protocol.