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# Mining Collaterals

## Collateral Model

Machine Initial Collateral = Machine Initial Metapower Pledge + Machine Initial Consensus Pledge
Machine Initial Metapower Pledge: approximately 10-day expected mining reward that the miner will receive
Machine Initial Consensus Pledge: provide sufficient long-term security guarantees to the network (i.e. still making consensus takeovers very costly although the minting reward decreases over time)
p(t) is the pledge percentage function, which is decreasing in time t
$p(t) = p_0 \times e^{-\lambda t} + 10\%,$
Ratio of annual minting reward and collateral is around 80% to 130%

## Why is Collateral Important?

The proof-of-stake (PoS) mechanism has proved to be an effective way to ensure the integrity of a cryptocurrency, and has been widely employed, including for such projects as Ethereum 2.0 and Filecoin.
Miners in the Oort are responsible for running the network in different ways. For example, a miner could serve as a MCP (Metaverse Computing Protocol) node to maintain the decentralized ledger and facilitate the smooth functioning of Ale Wallet. Or, a miner could rent its metapower out to other clients running CCN dApps. Finally, a miner could serve as a PoH consensus verifier to authenticate computation performed on CCN, etc.
To ensure the integrity of CCN miners and the stability of the metapower supply, all miners need to stake CCN tokens (“collateral”) to connect to the network. A miner with a larger metapower takes more responsibility in the network. Consequently, that miner could cause worse consequences for the network if the miner had an unreliable supply of metapower. Therefore, collateral should be proportional to the metapower that a miner contributes.
Metapower refers to the smallest unit of computing power in the metaverse. The CCN benchmark algorithm (will be open-sourced in a later phase testnet) converts all types of computing resources such as CPU, GPU, and hard disk to metapower based on the capability of its power contribution. How many CCN tokens a unit of metapower needs to pledge is ultimately determined by factors such as the token circulation in the market.