In a previous blog, we identified What is a Node? and specifically, what is a Switch Node. In this blog we’ll dive deeper into that topic by reprinting a section from Switch’s Litepaper.
There are many types of nodes on the Switch Network, each with a different purpose, cost, and token emission rate. The types available for purchase are Lite Nodes and Smart Nodes.
Lite Nodes are affordable nodes that are awarded a small number of tokens daily. While these nodes are much more affordable than a Smart Node, the Switch Reward earning power of the Lite Node is ever decreasing. To determine the points earned by a Lite Node, you need to divide the current price of the Lite Node by the current price of the Smart Node (definition below). This calculation will give you the points earned by the Lite Node in comparison to the Smart Node.
Smart Nodes are more expensive nodes that also get awarded a much larger number of points for their owners because they establish the backbone of the Switch Network.
The cost escalation plan is that a Smart Node license increases in price by the following amounts as nodes are sold based on the total number of Smart Nodes sold:
- $1 for the nodes 20k to 24,999
- $0.50 for nodes 25k to 34,999
- $0.25 for nodes 35k to 54,999,
- $0.125 for nodes 55k to 94,999
- $0.0625 for nodes 95k to 100K
The above formula makes it more expensive to purchase licenses as the network grows encouraging early adoption.
The license is sold by Switch, but is up to the license owner to activate the node by installing the software and hosting it online. This allows the Node to participate in the Switch Network and earn points based on Switch Actions and be eligible to receive daily distributions of SWITCH.