Network launch phases

Network Launch Phases

The exSat network launch is structured into three phases:

1. Initialization

During this phase, the exSat Foundation synchronizes the UTXO data of the first 840,000 Bitcoin blocks as a snapshot to kickstart network operations. This phase is non-incentivized and focuses solely on establishing the initial infrastructure.

2. Network Launch

After completing the Initialization phase, the exSat network begins synchronizing raw Bitcoin block data. This ongoing process involves uploading and processing Bitcoin blocks, starting from height 840,000 up to the latest block. As of February 22, 2025, the network has caught up with the latest Bitcoin block. At this stage, the exSat reward mechanism is activated, allowing participants to stake a minimum of 100 BTC to become Validators and engage in the consensus process.

3. BTC & XSAT Staking (Coming soon)

With the exSat network fully synchronized with Bitcoin’s latest block, participants will soon be able to stake $XSAT to qualify as Validators. This enables them to participate in the consensus process and earn $XSAT rewards.

Differences Between "Network Launch" and "BTC & XSAT Staking" Phases

1. Consensus Rules

• Network Launch Phase: Participants can only stake 100 BTC to become Validators.

• BTC & XSAT Staking Phase: Participants can stake either 100 BTC or 2,100 XSAT to qualify as Validators.

During the Network Launch phase, Validators are primarily institutions or large BTC holders due to the high entry requirement. Introducing XSAT staking diversifies Validator participation by making it more accessible to community members. This enhances the decentralization and security of the exSat Data Consensus Protocol. Learn more about the new consensus rules here.

Why XSAT Staking Begins in the Third Phase

XSAT staking is introduced in the third phase to align with the tokenomics and fair-launch principles of the exSat network. XSAT tokens are fairly distributed with no pre-mining or initial allocations, meaning all XSAT is mined during the synchronization of Bitcoin blocks.

At the time of the mainnet launch, the market lacked a sufficient supply of XSAT tokens for staking. By the third phase, after several months of mining and catching up with Bitcoin blocks, the network has achieved a significant XSAT token supply, making it feasible to enable XSAT staking for Validators.

2. Token Reward Allocation

The reward distribution for XSAT differs between the Network Launch and BTC & XSAT Staking phases. See the detailed reward distribution here.

Transitioning from "Network Launch" to "BTC & XSAT Staking"

The transition from the Network Launch phase to the BTC & XSAT Staking phase involves three steps:

Step 1: Consensus Contract Upgrade

The upgrade introduces XSAT staking. Community participants can stake 2,100 $XSAT and run the Client to become XSAT Validators. At this stage, XSAT rewards are not yet enabled, and running an XSAT Validator will not yield rewards. This step is a preparatory phase for the consensus upgrade.

Step 2: New Reward Mechanism Activation

Once the new reward distribution mechanism is activated:

• Synchronizers, BTC Validators, and XSAT Validators receive rewards based on the updated rules.

• XSAT Validators begin earning rewards, encouraging more community members to participate and further decentralize the exSat network.

Note: During this phase, XSAT Validator consensus results are not included in the final consensus results. Only BTC Validator consensus results are considered valid. This precaution ensures network stability, as an insufficient number of XSAT Validators could allow malicious actors to disrupt the consensus by controlling 1/3 of the XSAT Validators.

Step 3: New Consensus Activation

Once there are enough XSAT Validators operating, the new consensus mechanism is activated. At this stage, the exSat Network requires agreement between XSAT Validators and BTC Validators to achieve consensus on the latest Bitcoin block hash, ensuring a highly decentralized and secure system.