Sundial Network Roles: Operators, Watchers & Users

Sundial Protocol is maintained by a decentralized set of participants, each playing a distinct role in keeping the network fast, secure, and honest. No single entity controls the system — operators produce blocks, watchers verify them, liquidity providers stabilize the economics, and users drive real activity. This page gives you a map of who does what and how each role is rewarded.

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Role Overview

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Layer Operators (Block Producers)

Layer Operators are the backbone of the Sundial L2. They run L2 nodes, process transactions, build blocks, and commit block headers to L1.

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Responsibilities

• Transaction processing — receive L2 transactions, validate them against the current ledger state, and include them in blocks.
• Block commitment — periodically commit a block header (containing Merkle Patricia Trie root hashes) to the L1 state queue contract.
• Network maintenance — monitor node health, maintain uptime, and respond to L1 user-event syncs (deposits, transaction orders, withdrawals).
• Operator registration — maintain an active entry in the on-chain Operator Registry with a valid bond.

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Staking and Slashing

To become a Layer Operator, you must post a wBTC collateral bond to the Operator Registry. This bond:

• Aligns your financial interests with honest block production.
• Is slashed in full and awarded to any watcher who successfully proves one of your blocks is fraudulent.
• Is returned when you deregister and exit, provided no outstanding challenges exist against your blocks.

Because the deterministic UTxO model makes fraud proofs unambiguous, the risk of accidental slashing is negligible for operators who follow the protocol correctly. The bond size is governed by wBTC holders — see Tokenomics.

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Incentives

Operators earn a share of the transaction fees included in the blocks they produce. The expected payout depends on transaction volume, the number of active operators sharing the fee pool, and hardware/network costs. Governance can adjust fee parameters to maintain a healthy operator set.

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VRF-Based Block Scheduling

Operators are not selected in a fixed round-robin. The Sundial L2 uses Verifiable Random Function (VRF) scheduling to determine which operator produces each block. This prevents predictable targeting of specific operators and ensures fair access to block rewards without favoring any participant based on registration order.

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Bridge Operators

Bridge Operators run nodes for one or more of Sundial’s three bridge integrations: Cardinal, Charms, and the FluidTokens bridge. Each bridge has its own technical model.

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Watchers

Watchers play a reactive role — they monitor what operators do and respond when something requires action or can be accelerated. Unlike operators, watchers do not need to reserve collateral to participate (with the exception of the small challenge bond Provers post when submitting fraud proofs). Multiple watchers compete for the same rewards, which keeps the network honest and responsive. All four watcher roles share a common infrastructure base. Most watcher operators run all four roles simultaneously to maximize revenue from the same hardware investment.

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Provers

Provers continuously verify L2 blocks as they arrive in the state queue. Their job is to catch any block where an operator’s claimed state transition does not match the actual transactions. How it works: Incentives: Provers earn the full operator bond on a successful fraud proof — a substantial reward, given that governance sets bond sizes high to deter misbehavior. Between faults, Provers earn smaller Proof of Diligence (PoD) payments for actively verifying blocks, keeping the system economically viable even in periods with no malicious activity.

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Facilitators

Facilitators accelerate deposits and withdrawals by fronting liquidity on the destination side so users do not need to wait for the full challenge window. When you request an accelerated withdrawal, a Facilitator:

1. Verifies your withdrawal event is valid and included in the state queue.
2. Pays you your funds immediately on L1 from their own liquidity pool.
3. Waits for the challenge window to close and claims the funds from the L1 settlement contract.

The Facilitator earns a fee spread — the difference between what you pay for immediate settlement and the base transaction cost. Fees are competitive because multiple Facilitators are registered in the on-chain Facilitator Registry.

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Archivists

Archivists store complete historical block data — full block bodies, not just headers. This historical archive serves:

• Other watchers preparing fraud proofs that need access to past state.
• DeFi applications and analytics platforms querying historical balances and transactions.
• Users auditing their own transaction history.

Archivists charge access fees for retrieving historical data. They set their own pricing based on storage costs and demand. The decentralized, data-duplicated nature of the archivist network means no single party controls access to Sundial’s history.

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Canaries

Canaries provide opt-in, customizable monitoring services to users or dApps that want an additional layer of security beyond the base Prover coverage. Unlike Provers — who watch for fraud in block state transitions — Canaries offer broader L2 surveillance: network health, unusual transaction patterns, potential censorship, and other anomalies that fall outside the formal fraud-proof process. Canaries are free to define their own terms: what they monitor, how they report findings, and what they charge. Users subscribe to a Canary’s service and pay a subscription fee in return for customized alerts. The protocol takes a hands-off approach to Canary operation, allowing the market to determine which monitoring services are most valued.

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Liquidity Providers

Liquidity Providers (LPs) supply capital to the shared liquidity pools at SL4 of the protocol stack. They do not actively monitor the network or produce blocks — their contribution is passive capital that the protocol puts to work. LP capital enables:

• Babel fee conversions — the liquidity that allows any supported asset to be converted to wBTC for fee payment.
• Facilitator operations — Facilitators draw on LP pools to front withdrawal liquidity.
• DeFi integrations — verified dApps access shared pools rather than fragmenting liquidity across isolated contracts.

LPs earn yield proportional to their share of each pool and the volume of activity that uses it. Pool composition and yield rates are governed by wBTC holders and adjusted over time to maintain healthy liquidity depth.

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Users

Users are the reason the protocol exists. You can interact with Sundial in whatever capacity suits you — submitting transactions, staking assets, using yield instruments, or simply bridging Bitcoin in and out. No specific role or collateral is required to use the network. You interact with Sundial through:

• Supported wallets — Eternl, Lace, Typhon, Yoroi, GeroWallet, NuFi (L1); Reown AppKit (Bitcoin).
• Financial dashboard — manage balances, staking positions, and yield strategies.
• User Actions API — programmatic access for developers building applications on Sundial.

The protocol assumes you act in your own self-interest, and the incentive design of every other role is built around ensuring your interests are protected — even if every operator or watcher behaved selfishly, the fraud-proof system and escape hatch guarantee that your funds are always recoverable.

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Quick-Start Guides by Role