The 101 VeChain Thrudheim (Authority) Masternodes Selection Process Begins

9 min readApr 11, 2018

What is an Authority Masternode?

An Authority Masternode is a server connected to the network running the VeChainThor full node software and keeps a full copy of the blockchain. Authority Masternodes are the only full nodes on the VeChainThor blockchain that are authorized to validate and produce blocks.

The VeChainThor blockchain uses Proof-of-Authority (PoA) consensus, in which there will be 101 Authority Masternodes at the launch of the platform. All Authority Masternode owners need to be vetted to ensure that they have a legitimate identity, 25M VET (after 1:100 token split when mainnet launches) collaterals and a server which guarantees a certain minimum level of performance and availability. More importantly, Authority Masternode owners need to prove that they can make a significant contribution to the VeChain ecosystem in their fields. Also, Authority Nodes are entitled to the highest weight per vote in the community voting based on the VeChain Governance Model.

Authority Masternodes are rewarded by the network for maintaining the VeChainThor blockchain and participating in the platform governance. In addition to the VeThor that is automatically generated from the holding of VET, 30% of the VeThor consumed by transactions in a block will be paid out to Authority Masternodes equally, while the other 70% will be burned. In VeChainThor Authority Masternodes do not compete for the block producer, as the block producer is selected on a random basis by the program.

Who would own the Authority Masternodes?

For quick growth of the VeChain ecosystem, the designation of Authority Masternodes will be given to organizations or individuals in the following five categories:

Enterprise users

The adoption of enterprise users is critical in industrializing the VeChainThor blockchain technology. They can leverage the Authority Masternodes to easily and quickly deploy their blockchain applications and lower the cost of using the platform to provide services to their customers. Authority Masternodes also provide the enterprise user with flexibility in the service fee scheme for their customers who may still prefer to pay in fiat currency, which is extremely important in the early stage of blockchain adoption. In addition, they can influence the technological and business development of the platform to suit their business needs.

Blockchain development teams

A dynamic ecosystem needs high-quality developers. The Authority Masternodes can incentivize the developer to build their dApps or sidechains on the VeChain blockchain and express needs for the improvement of the platform. Developers may also use the Authority Masternode to develop and run cross chain services.

Business development ambassadors

By leveraging the features of the VeChainThor, business development ambassadors can accelerate the enterprise mass adoption in a broader range. They can implement the licensed VeChain solutions or build their own blockchain solutions for their enterprise clients.

Community contributors

Community contributors actively help the growth rate of the VeChain community and ecosystem in areas such as community outreach, community management, professional expertise. They also represent the interests of the community in the governance of the platform. The use of earned VeThor can be used to facilitate community events and further grow the reach of VeChain ecosystem.

Academic research partners

Academic research partners contribute to the technological research and development of the VeChain blockchain and leverage the Authority Masternodes to test out or run dApps for their research purposes.

The Foundation will review all the applications based on the defined criteria for each category and gradually designate the Authority Masternodes to applicants that the Foundation deems qualified after the mainnet launch. The Foundation may identify additional categories of participants as the platform develops.

The Foundation maintains a waiting list of all qualified Authority Masternode candidates. If a node owner fails to continuously fulfill the requirements of Authority Masternodes, they will be replaced by the candidate in the waiting list. The application process for Authority Masternodes will be ongoing to consistently add qualified parties.

What is the criteria for an Authority Masternode owner?

In order to be qualified as an Authority Masternode owner, you will have to meet the criteria in following areas:

25M VET: The Authority Masternode owners are required to have at least 25M VET collateral (after 1:100 token split when mainnet launches). The VET does not need to be in the Authority Masternode, but they need to be kept in the dedicated address that is bound with the VeVID of the owner. If the owner moves or spends those VET and results in the collateral becoming less than 25M VET, the owner will be disqualified and replaced by another candidate in the waiting list.
A VeVID with verified identity: Before applying for the Authority Masternode, the individual or institution applicant needs to complete the KYC verification in the VeVID portal to obtain an VeVID which represents the status of a verified user of the platform.
A secure and performing node environment:

A server or VPS (virtual private server) running Linux: You can choose to host your own server or use the VPS service to setup your server. We recommend cloud services such as AWS, Microsoft Azure and Alibaba Cloud. In order to meet the performance and availability requirements of the Authority Masternode, the server should meet the following hardware requirements. The hardware requirement may increase in the future as the platform enhances its scalability based on business needs.

*The Foundation may change the hardware specification requirement before the mainnet launch as we collect more statistics from our testing.

A secure environment: The server should not be exposed to any critical or high-risk vulnerabilities based on the industry recognized vulnerability scanning tools such as Nessus, Qualys. The Foundation will perform a vulnerability test of the node environment during the on boarding process.

4. Contribution to the VeChain ecosystem:

All Authority Masternode owners will automatically be enrolled in the VeChain community entity that is being built at a later stage. Applicants should meet the criteria in one of the below categories:

Enterprise user applicants should:
1) Run significant applications and business activities on the platform.
2) Use the VeChain blockchain platform to disrupt their business models and provide services to their customers.
3) Collaborate and advise on building the use case that can benefit the enterprises of similar industry or size.
Blockchain developer applicants should:
1) Plan to develop or migrate their dApp projects on the VeChain blockchain that are aligned with the Foundation’s vision of the ecosystem.
2) Comply with legal and regulatory requirements in corresponding areas and regions.
3) Have a strong team and a clear technological and business roadmap.
4) Demonstrate the capabilities of growing a large user base.
5) Own projects with a working application, or in testing, to be preferred.
Business development ambassadors should:
1) Be able to handle business development opportunities that attract major enterprises to use the VeChainThor.
2) Be able to develop and implement blockchain solutions on the VeChainThor for their clients.
3) Obtain authorization from VeChain if they would like to implement VeChainThor on new solutions.
Community contributor applicants should fulfill at least two of the following requirements:
1) Be able to contribute in the community building such as community management, community outreach in new regions, marketing and PR.
2) Be able to help with development and technical documentation pertaining to the VeChain technology.
3) Be able to provide expertise support for the Foundation and platform governance in the specific areas such as legal, finance, compliance, cybersecurity, privacy.
Academic research partner applications should
1) Demonstrate the capabilities for advanced technical research and development.
2) Collaborate with the Foundation on the subjects within the VeResearch program to enhance the technological development of the next generation VeChain blockchain technology.

How can I apply and what is the approval process?

Application prior to mainnet launch

The initial application is only available to those who locked up at least 250,000 VET from Dec 21 2017 till the mainnet launch (after token split, the requirement of Authority Masternode changed to 25M). The application will start from now and last for FOUR weeks. Applications can be submitted through the following form:

Application Form

The Authority Masternode owner approval and designation process is as follows:

Upon the application deadline, the Foundation technical committee and public relation committee will review your application based on the aforementioned criteria and select the best suited applicants.
The shortlisted applicants will be approved by the Steering Committee.
If selected, the applicant will be contacted by the Foundation to provide KYC documentations, the proof of 250,000 VET (after token split, the requirement of Authority Masternode changed to 25M) holding as well as the node hardware information. The applicant may be contacted for further information if needed.
If everything checks out, we will contact the applicant to start the deployment process. (please see the below section)
If the Foundation is not able to identify enough qualified applicants, we will temporary reserve the nodes for future applicants.

Application after the mainnet launch

Applicants can apply for the Authority Masternode through the VeChain portal. Applicants would need to first complete the KYC verification and obtain a VeVID which represents the status of a verified user. And then the user can apply for the Authority Masternode with their VeVID in the VeChain portal. Only after a user has a verified VeVID can the user apply for the Authority Masternode through the VeChain portal.

The Authority Masternode owner approval and designation process is as follows:

Once the applicant submits the required information in the VeChain portal, the Foundation technical committee and public relation committee will review the application and determine whether the applicant is qualified.
If the applicant is deemed qualified, it will be submitted for approval by the Steering Committee. The review and approval process should take no more than 3 weeks once all the required information is provided.
Upon the approval by the Steering Committee, the applicant will be added to the waiting list until there is a vacancy in the Authority Masternodes. (Please see below section for the requirements of maintaining the Authority Masternode status and the replacement process)
If the applicant is selected as an Authority Masternode owner, they will be contacted by the Foundation to provide the proof of 250,000 VET (after token split, the requirement of Authority Masternode changed to 25M) holding and the node hardware information. The applicant may be contacted for further information if needed.
If everything checks out, we will contact you to start the deployment process. (please see below section)
Once the Authority Masternode is deployed, the owner should continuously fulfill the requirements set out by the Foundation to avoid losing the Authority Masternode status.

How can I host an Authority Masternode after being selected?

When being selected as an Authority Masternode, the owner will be contacted by the Foundation to provide the VeChain wallet address, IP address, and specifications of the node environment. The foundation will perform a vulnerability scan of the environment before it is placed in production.

The Foundation will provide detailed deployment instruction. Setting up an Authority Masternode requires a basic understanding of Linux and blockchain technology, as well as the ability to follow instructions closely. Being part of the production pool also requires regular maintenance and careful security.

The owner will also need to provide the proof of 250,000 VET (after token split, the requirement of Authority Masternode changed to 25M) collateral and an address to receive the block rewards.

How does the Foundation monitor performance?

An Authority Masternode might be disqualified and substituted with a candidate in the waiting list if the owner violates any of the following rules:

The VET collateral is below 250,000 VET (after token split, the requirement of Authority Masternode changed to 25M)
Any node that is unavailable to produce block more than three times during a 24-hour period
Critical or high-risk vulnerabilities were found on the node environment
Node owner fails to fulfill the committed contributions to the ecosystem
Node owner fails to upgrade the software within the specified timeframe by the Foundation
Node owner refuses to follow the voting result
Node owner conducts malicious attack on the blockchain or other nodes
Node owner was noticed to cause other damage to the ecosystem

* The Foundation reserve the rights to modify the rules based on the statistics from our testing and mainnet running

The Foundation’s technical committee is responsible for continuously monitor the performance of the Authority Masternodes. If any violation is noticed, the technical committee will warn the Authority Masternode owner and inquire about the cause for the violation. If the Authority Masternode owner is deemed as disqualified based on the analysis, the technical committee will notify the steering committee of any violation of the rules with the analysis result.

What is the process of replacing an Authority Masternode?

If the Steering Committee confirms the technical committee’s motion to disqualify an Authority Masternode, the replacement process will begin. The Steering Committee will designate a random number (e.g. the hash of a future block) that will be used to randomly pick a qualified candidate in the waiting list. The replacement process is executed via a smart contract that requires multi-signature of the Steering Committee members. The smart contract ensures that whenever an Authority Masternode is disqualified a new node must be added, which prevents anyone from attempting to wipe out the Authority Masternode list. Any Authority Masternode owner that is disqualified cannot apply to be added back to the waiting list for six months.

Given the Foundation’s business development efforts and strategic roadmap of the VeChain ecosystem, we hold the right to hold on to certain number of Authority Masternodes on behalf of the community for our future strategic partners or technology partners.