Incentive Testnet: Key Factors for Successful Protocol

In recent years, Proof of Stake (PoS) blockchains have become increasingly popular. This trend is reflected in Ethereum's transition from Proof of Work to PoS, the flourishing of the Cosmos ecosystem, and the rise of new PoS L1 public chains such as Aptos and Sui.

The PoS mechanism relies on a network of validators, which presents two major challenges for the project: first, the value of internal testing is limited because the network depends on decentralized external parties to execute consensus; second, the nodes can be costly and require specific maintenance skills and effort.

These factors contributed to the rise of incentive Testnets. Cosmos was the first to launch such a Testnet through its Game of Stakes project, which is a mechanism for testing blockchain in a decentralized way and reducing risks before officially launching core functionalities.

Definition and Role of Incentive Testnet

The Incentive Testnet is a gamified project that encourages external validators, developers, and other users to participate in testing the blockchain network to earn rewards. It is primarily used to test the PoS infrastructure, helping the protocol establish a strong network of node operators, ensuring stability and decentralization when the project goes live, while simulating a decentralized PoS network to test the underlying infrastructure and identify potential issues.

Recently, the application scope of the incentive Testnet has expanded to various aspects such as smart contract deployment, governance voting, trading, cross-chain infrastructure, security measures, and general protocol usage.

Key Considerations for Building an Incentive Testnet

Clearly define the goal

The project team needs to identify the key protocol components to be tested, taking into account the project scale, entry criteria, and success metrics. Objectives may include testing the performance and security of node infrastructure, or educating early users and testing the functionality of specific mechanisms, as with certain trading/lending protocols.

Set Participation Threshold

The admission criteria ensure that participants meet minimum standards. Common requirements for validators include having the necessary hardware, validator experience, and technical capabilities, and sometimes geographical diversity must also be considered. At the same time, ensuring a sufficient number of participants is crucial for achieving network decentralization.

incentivize correct behavior

Through project design and reward distribution, ensure comprehensive testing of all functionalities and help participants gain appropriate experience. Incentive Testnets are typically conducted in phases, gradually testing different parts of the network. Rewards may be the project's native tokens or stablecoins, usually allocated based on the completion of specific tasks or performance.

Promote mainnet launch

The community building and experiences driven by the Testnet projects are crucial to the success of the network. Validators gain operational experience, developers become familiar with tools and documentation, and community contributors compile learning materials, all of which contribute to building a high-quality community. Projects should continuously interact with Testnet participants to maintain community engagement.

Some projects such as Oasis, Solana, Cosmos, and NEAR have continuously invigorated the community through multiple Testnet projects or additional incentives, laying a solid foundation for the mainnet launch.