Incentive Testnet: The Key Driver of Successful Protocols

In recent years, the popularity of Proof of Stake (PoS) blockchains has been steadily increasing. This trend is reflected in Ethereum's transition from Proof of Work to PoS, the flourishing development of the Cosmos ecosystem, and the emergence of new PoS L1 public chains such as Aptos and Sui.

The PoS mechanism relies on a network of validators, which presents two main challenges for projects: first, the value of internal testing is limited because the network depends on decentralized external parties to execute consensus; second, the operational costs of nodes are high, requiring specialized skills and ongoing investment.

These factors contributed to the rise of incentive Testnet. First introduced by Cosmos through its Game of Stakes project, this mechanism allows for decentralized and low-risk testing of the blockchain before officially launching core functionalities.

Definition and Function of Incentive Testnet

The Incentive Testnet is a gamified project that encourages external validators, developers, and users to participate in testing the blockchain network for rewards. It is primarily used to test the proof-of-stake infrastructure, helping the protocol establish a robust network of node operators, ensuring stability and decentralization at the time of project launch, while simulating a real environment to uncover potential issues.

Recently, the application scope of the incentive Testnet has expanded, not only limited to staking and validator infrastructure testing, but also including various aspects such as smart contract deployment, governance voting, transactions, cross-chain infrastructure, security measures, and the use of general protocols.

The Construction Ideas of Incentive Testnet

Although the scale, objectives, and timelines of various projects differ, some key considerations help ensure the effectiveness and success of the Testnet.

Clarify objectives

The primary task is to identify the key protocol components that need to be tested in a decentralized manner, and then consider factors such as project scale, entry criteria, and success metrics. In addition to common tests for node infrastructure performance and security, other objectives can also be set. For example, certain trading and lending protocols use the Testnet to educate early users and test the performance and functionality of specific mechanisms.

Set participation threshold

Access conditions ensure that participants meet minimum standards. Common requirements for validators include appropriate hardware, relevant experience, and technical capabilities, with geographical distribution sometimes considered to ensure the network's broadness. At the same time, ensuring a sufficient number of participants is crucial for achieving adequate decentralization of the network.

For projects involving test exchange functionality and lending protocols, the access threshold is usually low to encourage broader participation. KYC is a standard requirement for most incentivized Testnet projects to ensure compliant allocation of rewards and prevent potential attacks.

Design incentive mechanism

The core of the incentive Testnet lies in ensuring comprehensive testing of various functions through project design and reward distribution, and helping participants gain appropriate experience to prepare for the mainnet launch.

The Testnet is usually conducted in phases, gradually testing different parts of the network. Rewards are typically distributed in the form of the project's native tokens or stablecoins, and recently several projects allocated about 1% of their token supply for the Testnet.

The reward methods are mainly divided into two categories: milestone/task-based and performance-based. The former rewards participants for completing specific tasks or identifying key issues, while the latter rewards based on metrics such as validator uptime, transaction performance, or maximizing TVL.

The project design also needs to consider whether to emphasize adversarial or cooperative aspects. Adversarial projects encourage participants to coordinate attacks within a specific scope, testing the resilience of the Testnet in the face of real threats.

from Testnet to mainnet

The community building and experience accumulation driven by the Testnet project are crucial for the successful launch of the network. Validators gain operational experience, developers become familiar with tools and documentation, and community contributors write learning materials and provide support, all of which help in establishing a high-quality community.

The project team should continuously interact with the Testnet participants to maintain community engagement. Some projects also keep the community vibrant by distributing grants, providing token authorization opportunities, or launching multiple rounds of Testnet projects.

By carefully designing and executing incentive Testnet projects, blockchain protocols can thoroughly test key functionalities before their official launch, cultivate an active community, and lay a solid foundation for future success.