### Prime Controller Information

A big part of the PayCoin design that sets it apart from other coins is that it has provisions for Prime Controllers. These are nodes that handle a lot of the real work of PayCoin, and in return for the work they get much higher staking rates. I've looked at the source code, and from what I can see Prime Controllers can have their annual staking rate set to 10%, 20%, 100%, or 350%. Yeah, that's a bit coarsely grained as I'd think maybe 50% and at least one more rate should be included, but that's a different matter.

Needless to say, with the potential to stake at 350% annually, you'd expect a lot of people to want a piece of the pie. Especially with GAW talking about $20 minimum XPY values, if you stuck say 10,000 XPY into a Prime Controller for six months you'd be looking at returns of 17500 XPY, or $350,000. Assuming XPY actually breaks and stays above $20 once PayBase is in full use, but that's a different subject. [Side note: PayBase is likely launching next week on Monday, Dec. 29 now. Unless it gets delayed again.]

Here's where it gets interesting, and a bit complex. I'm not quite sure where the Prime rate gets set, but as far as I can tell it happens once every six months. It was set for 350% for the first six months of staking, which is where the Round 1 HashStaker pay rate of 0.00972 comes from. (365*0.00972=3.5478, which means GAW is actually paying out a bit more than 350%.) Given that Prime Controllers pay so much higher than other options -- and you don't have to buy a HashStaker from GAW to participate in theory -- why wouldn't everyone simply try to become a Prime Controller? The answer is simple: cost.

There's a bidding process that takes place at the beginning of each round, and the winners become Prime Controllers. To become a Prime Controller, you need to bid

*at least*50 XPY, and I believe all non-winning bids become Orion Controllers (more on that later). The catch is that all funds put into your Prime Controller bid are locked for the duration of the round. You'll get the staking bonuses from the Prime Controller, but all of the principle is frozen until the round ends, at which time another round of bidding commences.

That brings us to the subject of the day: Prime Controllers. How many are there and how many coins are invested into those controllers? It turns out that this is visible on the PayCoin Block Explorer, if you go to the Rich List. Right at the top, you should see "All 52 Prime Addresses", which are grouped into one by default but you can break them out. [Note: From what I can see in the Whitepaper, there are only 50 Prime Controllers right now; I don't know for sure if that's correct, but if so then at least some of the addresses in that list are being mistakenly categorized as Primes.] Curious to find out what the minimum winning bid was for a Prime Controller? So was I!

It turns out that while the minimum bid to try and become a Prime is only 50 XPY, the actual winning bids seem to start at 125,000 XPY. Wow! Even at the current price of around $11, that's a big chunk of change. What's perhaps even more interesting is that between all 52 current Prime Controllers listed, there's 7,138,233.1 XPY, or nearly 58% of all current PayCoin in existence. Which means there's a lot less potential for people to be dumping millions of XPY any time soon.

It's pretty clear that GAW controls most if not all of these, as there are basically two categories of Prime Controllers right now. Of the 52 Prime Controllers listed on the block explorer, 16 started with 125,000 XPY while the remaining 36 started with 146,429.0 XPY. GAW apparently controls at least 36 of the Prime Controllers, but what's really odd to me is that where the Prime addresses that started with 146,429.0 XPY have all experienced staking at 350%, the same isn't true of the 125,000 XPY Primes.

Thirteen "Primes" with 125,000 XPY each haven't even staked at all, which is really weird -- they're potentially missing out on something like $8000 per day by not being active! And if they aren't active they could get voted out, so that doesn't seem likely to be the case; maybe they're just "unlucky". Perhaps even worse is that while the remaining three all staked, they did so at what appears to be the wrong rate! Look at the following Prime Controllers:

`PU6fSGBs4XMojLvA1QA3mR6PWKH2YeKQif`

PAb2qKEP9YWQaCENyp4cEyFB8dCL6MeeAA

PPLk5QjVzbDdvtXtfpxQBTRnGTHFW6YtyQ

They're all basically the same; each staked 9.2-9.8 XPY in rewards once so far. Let's quickly do the math on the first one. The start time for staking should be 2014-12-22 14:57:55 and the end time (i.e. first stake reward) is 2014-12-22 21:47:40. That's 0.2845486 days, or 0.000779585 years. Based on those numbers, it looks like the node staked at just 10% -- so still a Prime Controller staking rate, but the lowest possibility instead of the highest. Oops. So if you happen to be one of the winning bids for a Prime Controller, you should probably contact GAW and find out what exactly is going on and why you're staking at 10% instead of 350%. Unless GAW is intentionally staking some Prime Controllers at a lower rate to reduce the flow of new coins into the market? But that would be odd at best, as GAW could sit on the coins and just not sell them or transfer them anywhere.

### Orion Controller Information

Moving on, let's talk about Orion Controllers. From what I understand -- and please feel free to correct me -- all non-winning bids at becoming a Prime Controller end up becoming Orion Controllers. That probably happens by default, but whatever. Since there are only 50 (or 52) Prime Controllers and they're all staking about once per day, at least for the next 28 days or so all other staking will happen at Orion Controllers. In order to become an Orion Controller, the Whitepaper isn't exactly clear (and neither are the Hashtalk forums), but it seems all you really need to do is run a node with at least 50 XPY in it, in a single address. Having more than 50 XPY isn't a bad idea, as staking can break your XPY into smaller chunks.

Where there's a bidding process for Prime Controllers, it doesn't seem like you need to do much more than run a node in order to become an Orion Controller. The benefit of being an Orion Controller is that while the stake rate is the same as the wallet (5%), you can stake without waiting 30 days. Staking is also useful as you receive the transaction fees for any block. Looking at the current blocks being solved via PoS, that often means something on the order of 0.001 to 0.01 XPY per block you solve. And if that's all you get, it's probably not worth the effort, but all Orion Controllers are also supposed to split the proceeds of the winning Prime bids (2500 XPY I guess). Since there could be thousands of Orion Controllers, that still might not amount to much, so there's still not a huge draw to me to set up an Orion Controller.

The caveat is that to become a Prime Controller on the next round of bidding (which is now six months away), you first need to be an Orion Controller. So that's probably the bigger benefit -- you could get promoted to Prime in the future to earn a lot higher staking percentage. But given it required 125,000 XPY to win a Prime Controller bid, you'd need a lot of money to reach that level. I wonder if we might see some sort of pooling together happen from people in order to win "free Prime rates" next round? Get about 300 people with 500 XPY each and as long as they're all willing to go in together in one address, you could avoid the need to have 150,000 $10 HashStakers. Good luck with that.

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