> For the complete documentation index, see [llms.txt](https://docs.swanchain.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.swanchain.io/swan-inference/become-a-provider/computing-provider-collateral.md). # Earnings and Collateral ## Collateral under Swan 2.0 A Swan 2.0 provider account deposits **refundable collateral** before it is activated for paid traffic. The deposit backs the slashing rules: verified misrepresentation of a model or its context window can be penalised from it, always with a 48-hour appeal window. Honest providers get it back in full when they leave. ### Where and how much | Chain | Chain ID | Token | Minimum | Collateral contract | | ------------- | -------- | ----- | ----------------- | -------------------------------------------- | | Ethereum | 1 | USDC | 20 USDC | `0x1dEe92Da8fc4878795418aEde112100A57286a9a` | | Base | 8453 | USDC | 20 USDC | `0x7fac98B02f4Fcda9Ac49508eb2E97E4BE4fecE9B` | | Swan Chain | 254 | SWAN | 35,000 SWAN | `0x7fac98B02f4Fcda9Ac49508eb2E97E4BE4fecE9B` | | Card (Stripe) | — | USD | shown at checkout | — | The live table is served by `GET /api/v1/provider/collateral/contract` and printed by `computing-provider inference deposit`; your dashboard's **Collateral** panel shows the same values for your account. Deposit by sending the token to the collateral contract from your **owner wallet** and confirming the transaction in the dashboard (or `computing-provider inference deposit --check`), or pay by card through Stripe. On-chain deposits need a little native gas on the chosen chain. ### Lifecycle `pending → confirmed → refund_requested → refunded` * **Confirmation** is automatic once the transaction is seen on-chain (card payments confirm immediately). * **Activation** follows automatically when collateral is confirmed, the GPU is eligible and the registration benchmark has passed. * **Refund** can be requested from the dashboard at any time. The waiting period is **7 days**; a refund cannot start while a payout is pending, and the provider is suspended from routing until the refund completes. Card collateral is returned to the original card, on-chain collateral to the depositing wallet. ### Slashing | Trigger | Consequence | | -------------------------------------------------------------------------- | -------------------------------------------------------- | | Consecutive benchmark failures | 10% of collateral, then 30% and removal from the network | | Verified model or context-window misrepresentation, continued after notice | Collateral penalty under the verification rules | | Falling below the minimum collateral | Suspended from receiving requests until topped up | Every penalty record carries a **48-hour appeal window**, visible in the provider dashboard. Serving a small model or a small context window honestly is never penalised — only misrepresentation is. See [Quality assurance](/swan-inference/swan-2.0-inference-cloud.md#quality-assurance) and the [Context-Window Integrity notice](/swan-inference/become-a-provider/provider-context-window-faq.md). ## Swan 1.0: CU-based collateral (archived) {% hint style="warning" %} **Archived.** The Computing-Unit formula below applied to Swan 1.0 (ECP/FCP) providers and is kept so they can understand and withdraw their existing deposits. It does not apply to Swan 2.0 providers — see the current rules above. {% endhint %} #### **Introduction** In the Swan Chain network, Computing Providers (CPs) contribute their computational resources to support the network's decentralized computing infrastructure. To ensure stability and economic security, CPs are required to provide collateral in Swan tokens. This collateral acts as a financial commitment, incentivizing CPs to act in the best interest of the network while also sharing in the economic rewards generated from providing computing power. #### **Collateral Model** The collateral amount for each CP is determined by an inverse correlation model based on the total computing power contributed by the CP to the network. The formula for calculating the collateral amount is: $$ C\_{base} = \frac{C\_{total}}{CU\_{total}} + b $$ $$ CU\_{total} =\max ( \sum\limits\_k N\_{ECP}(GPU\_k) \times f\_k + \sum\limits\_k N\_{FCP}(GPU\_k) \times f\_k \* W\_{FCP}, CU\_0) $$ $$ \begin{cases}CU\_0 = 3000 \C\_{total} = \text{Circulating supply of SWAN} \times 20%  \b=200\end{cases} $$ Where: * $$W\_{FCP}$$ represents the FCP resource bonus ratio, currently set at a constant value of 1.2 * $$N\_{\text{FCP}}(\text{GPU}\_k)$$represents the number of $$\text{GPU}\_k$$ *in FCP* * $$N\_{\text{ECP}}(\text{GPU}\_k)$$ represents the number of $$\text{GPU}\_k$$ in ECP. * $$f\_k$$ represents the earnings growth factor Currently, the computing units $$CU\_{\text{total}}$$ in the network are capped at (CU\_0 = 3000). If the computing units remain at or below (3000), the base collateral remains constant at: $$ C\_{\text{base}} = \frac{10,000,000}{3000} + 200 = 3533 $$ Example: If $$CU\_{\text{total}}$$ **increases to 6000** 1. Substitute $$CU\_{\text{total}}$$ = 6000 into the formula: $$ C\_{\text{base}} = \frac{10,000,000}{6000} + 200 $$ 2. Perform the calculation: $$ C\_{\text{base}} = 1666.67 + 200 = 1866.67 $$ So, if the computing units (CU) exceed 3000, the base collateral amount will start to decrease. In the example where CU is 6000, the base collateral amount is 1867, which is lower than the 3533 calculated earlier when CU was 3000. #### **Revenue Sharing and APR Calculation** Once a CP provides collateral, they are eligible to receive revenue generated from both Universal Basic Income (UBI) tokens and paid jobs. The revenue model includes: 1. **UBI Income**: CPs receive UBI tokens as a baseline income for their participation, which is inversely related to their collateral and computing power. 2. **Paid Job Income**: CPs can earn additional revenue by completing paid jobs, which are offered at a market rate determined by user demand. The **Annual Percentage Rate (APR)** for the CPs is calculated separately for both their operating revenue and collateral revenue: * **Operator APR**: The revenue generated by CPs for providing computing power divided by their total operational costs. * **Collateral APR**: Calculated based on the revenue earned by providing collateral relative to the collateral amount itself. The **total APR** includes both the operator APR and collateral APR, providing a complete picture of the financial returns for CPs participating in the Swan Chain network. #### **Slashing Mechanism** To maintain network performance and accountability, CPs are subject to a precise slashing mechanism that penalizes inefficient or unreliable computing services. For each failed task, CPs face graduated penalties: * Edge Computing Providers (ECP) lose 0.025% of their current full collateral amount per failed task (approximately 0.88 SWAN for a 3080 GPU), with around 48 tasks processed daily. * Fog Computing Providers (FCP) lose 0.1% of their current full collateral amount per failed task (approximately 3.533 SWAN for a 3080 GPU), with around 14 tasks processed daily. If a CP's collateral amount falls below the required threshold, they become ineligible to receive Universal Basic Income (UBI) tasks. To mitigate the risk of unexpected task exclusion, CPs are advised to maintain a buffer in their collateral amount. #### **Impact of Collateral Model** The negative correlation between collateral and computing power has several benefits: 1. **Incentivizing Scale**: CPs are encouraged to scale up their contributions to the network, as increasing their computing power reduces their collateral requirements. 2. **Risk Mitigation**: Collateral serves as a safeguard, ensuring that CPs have a financial stake in the network's success and discouraging malicious behavior. 3. **Economic Participation**: By allowing CPs to share in both operator and collateral revenue, the model promotes balanced economic participation, where CPs are rewarded not only for their computational contributions but also for their financial commitment. ***