Once upon a time, blockchains followed Bitcoin’s lead: they relied upon far-reaching networks consisting of small, individually-run nodes. However, over time, some blockchains have begun to move away from this model. Instead, they rely on fewer but larger nodes—which are typically run by large groups with plenty of power and responsibilities.
EOS, TRON, Tezos, NEO, and Ontology all rely on large node operators, which are assigned various tasks. For example, node operators often finalize transactions, approve blocks, engage in governance, and provide transaction processing power to the network—or, at least, they perform some combination of those tasks.
Node operators typically earn revenue for their services. However, there’s more to this than profit. Large node operators also need to represent the interests of the coinholders who vote for them (or stake tokens with them).
So many important node operators are giving back to the blockchain ecosystems they serve, often in ways that may seem unexpected ― and here’s how.
Sesameseed: A Reward System and Project Incubator for TRON
Sesameseed is TRON’s most voted-for super representative. Like many other TRON super representatives, Sesameseed distributes rewards to coinholders who vote in its favor. However, Sesameseed has a special way of doing this: it pays out its own SEED token rather than TRON’s native TRX token.
SEED tokens can be redeemed for TRX, but they also contain extra incentives. If you hold your SEED tokens, they will (theoretically) accrue more value over time, and you will be able to redeem them for a greater number of TRX tokens. Sesameseed is planning to introduce this on other blockchains―recently, it began to support Ontology.
Sesameseed also runs SEEDGerminator, which is an incubator for blockchain apps. Sesameseed invests directly in project development, but users can also invest SEED tokens in these projects as well (and earn rewards for doing so).
So far, SEEDGerminator has financed several TRON projects, including Poppyseed, a point-of-sale retail system for TRX token payments.
EOS Authority and EOS New York: Serving the EOS Ecosystem
EOS node operators are called block producers. They don’t distribute rewards to users, which means that they compete on other grounds. Sometimes, the most voted for block producers aren’t very involved in EOS. At the moment, StartEOS has the most votes, but it is far less notable than its lower-ranking competitors.
EOS Authority, for example, is highly involved in the EOS ecosystem. It provides extensive EOS services including an EOS block explorer, a referendum tool, and an online wallet. It also provides an interface for the EOS Resource Exchange (REX), which investors can use to earn rewards in a way that is different from most blockchains.
EOS New York is another very important block producer. It provides extensive documentation and several tools that are largely aimed at developers. Both of these block producers are not always active—sometimes they are just on standby—but they continuously contribute to the EOS ecosystem in very important ways.
Tezos Capital: A Highly Popular Baking Service
Tezos relies on nodes called “bakers” to finalize its blocks. Baking actually does not have a very high barrier to entry, relatively speaking, so even mid-level investors can serve as bakers. Nevertheless, there are some large baking services that pay out rewards to small investors who just want to stake their tokens.
Tezos Capital is one of Tezos’ most important and most popular bakers. It is Tezos’ oldest baking service, but it is also adapting to the blockchain’s growing popularity. Recently, Tezos Capital partnered with Polychain Labs to increase bond coverage and delegation capacity, ensuring that it has the ability to serve large investors.
NEO’s City of Zion: An Open-Source Development Community
NEO relies on small, distributed “full nodes” to store its blockchain. However, it also relies on seven large consensus nodes, which govern the NEO blockchain and earn revenue from transaction fees. If you are a NEO coinholder, you can vote for consensus nodes, but rewards come from a different process, explained in detail here.
Most consensus nodes are run by the NEO Foundation itself. However, the City of Zion also serves a very important role. In addition to running a consensus node, CoZ acts as one of NEO’s most important development communities. It uses its funding to develop NEO tools and sponsor recurring DApp competitions―a major boon for the NEO ecosystem.
Ontology and CertiK: Smart Contract Security and Auditing
Ontology relies on “Triones nodes”―seven consensus nodes, plus many other candidate nodes. Ontology has published an interesting “comic book”-style explanation here. Unfortunately, several of the organizations on Ontology’s list of Triones nodes don’t have much of an online presence, so there is not much to say about them.
That said, one candidate node is fairly well-known: CertiK, a smart contract verification and auditing service. Ontology and CertiK formed a strategic partnership in July 2018, so it is possible that this relationship could grow deeper over time.
CertiK launched its testnet just yesterday, and may be ready to focus further on the relationship in the coming months.
Blockchain nodes almost always give something back to the community that they serve. Sometimes, node operators simply redistribute part of their revenue to coinholders and voters. Other times, node operators spend revenue on initiatives that benefit a project directly, either through app development or online resources.
Offering rewards does have a drawback, though. If node operators simply offer high rewards, they may become successful even if they don’t give much back to the blockchain project in question. On the other hand, if node operators do not offer rewards, investors will probably turn other other solutions that actually make money.
In any case, it seems that many large node operators do have the best interests of their blockchain community at heart. Large node operators can be quite ambitious, and they are valuable additions to the blockchains that they serve―and the node operators listed above are all good examples of that.