Validators

Validators are the people who run the Navy L1. They submit prices, verify dividends, and confirm NAV updates. The cost of lying is higher than the profit from cheating.

Who Can Be a Validator

Not anyone. Every validator must put up real capital and prove they have the infrastructure to do the job.

Stake. $100,000 in $NAVY plus 1M Navy Points. This is slashing collateral. If a validator submits bad data, they lose it.

Data access. Redundant, low latency connections to IEX, Nasdaq, and SEC EDGAR. Each validator runs a proprietary sidecar that pulls market data every 400ms.

Hardware. Dedicated NVMe storage and high speed CPU. The oracle needs NBBO midpoint calculations every block. Consumer hardware cannot keep up.

The Committee of 10

For every asset (ARCC, O, PDI, etc.), the L1 randomly assigns a committee of 10 validators from the global pool each epoch.

Dividends and NAV. 8 of 10 must agree on the exact data from the SEC filing. If fewer than 8 agree, Oracle Lock stays active and the Prime Council is alerted. No trades settle until the conflict is resolved.

Spot price. 7 of 10 must agree on the NBBO midpoint within 0.5%. Outliers are discarded and flagged.

Accrued dividend. Validators must update the accrued dividend every 24 hours. Missing two consecutive updates triggers an automatic strike.

Proof of Work

Validators do not just read the 8 K. They prove they read it.

Hash rule. Every submission includes a cryptographic hash of the specific SEC filing the data came from. The chain can verify the source.

Timing rule. Submissions must arrive within 3 blocks of the filing appearing on EDGAR. Late validators miss their reward. Wrong validators get flagged for slashing.

Slashing

Three strikes. Each one costs more than the last.

Strike 1. Price deviation greater than 0.5% or a missed accrual update. The validator loses all fees and block rewards for that epoch. They earn nothing.

Strike 2. Inconsistent data or a minor 8 K entry error. 10% of their staked Navy Points are burned. This reduces their governance power going forward.

Strike 3. Collusion or deliberately false data. 100% of their $NAVY stake is slashed. The funds go directly into the Junior pool ($nRISK) as reparation for the risk they caused. The validator is removed from the network.

Whistleblower Bounty

Junior ($nRISK) holders are the most exposed to bad oracle data. So they get the tools to police it.

How it works. On the dashboard, every price, NAV, and dividend field has a Challenge Data button. Anyone can challenge a validator submission.

The bond. A whistleblower posts $500 USDC to prevent spam.

The proof. They submit a link to the SEC filing or a timestamped screenshot of the NBBO feed that contradicts the validator consensus.

The review. The Prime Council (7 seat governance body) reviews the challenge within 4 hours.

If right. The whistleblower receives 50% of the slashed validator bond. The rest goes to the Junior pool. On a $100K validator stake, that is $50,000 or more.

If wrong. The $500 bond is burned.

This means every Junior holder is a protocol auditor. If 8 validators try to fake a dividend to help an insider, any Junior holder can blow the whistle and collect the bounty. The math makes collusion unprofitable.

Validator Rules Summary

Consensus threshold. 80% (8 of 10) for dividends and NAV. 66% (7 of 10) for spot price.

Slashing trigger. Data entry error on an 8 K filing or spot price deviation greater than 0.5%.

Reward split. 70% to stakers, 30% to validator operations.

Veto rule. Validators can halt trading on an asset if the confidence interval drops below 70%.

Transparency. All challenges and slashes are recorded on the L1 block explorer.