The BitSong Network is based on Tendermint and Cosmos-SDK, which relies on a set of validators that are responsible for committing new blocks in the blockchain. These validators participate in the consensus protocol by broadcasting votes which contain cryptographic signatures signed by each validator’s private key.
Validator candidates can bond their own Btsgs and have Btsgs “delegated”, or staked, to them by token holders. The BitSong Network will have 32 validators, but over time this will increase to 100 validators according to the governance. The validators are determined by who has the most stake delegated to them — the top 32 validator candidates with the most stake will become BitSong Network validators.
Validators and their delegators will earn Btsgs as block provisions and tokens as transaction fees through execution of the Tendermint consensus protocol. Initially, transaction fees will be paid in Btsgs. Note that validators can set commission on the fees their delegators receive as additional incentive.
If validators double sign, are frequently offline or do not participate in governance, their staked Btsgs (including Btsgs of users that delegated to them) can be slashed. The penalty depends on the severity of the violation.