# Wallet Generation

Wallets are created periodically based on governance.

`updateWalletParameters`

changes the time between wallets and `walletParameters`

reads it. The time between new wallets is held in `walletCreationPeriod`

in number of seconds, so the current value of `1209600`

represents 14 days.
In order for the wallet to move funds, it produces signatures using a Threshold Elliptic Curve Digital Signature Algorithm, requiring 51-of-100 Signers to cooperate.The 100 signers on each wallet are chosen with our Sortition Pool, and the randomness is provided by the Random Beacon.

The probability that a Staker is chosen to be a Signer is equal to their percentage of the total TBTC Stake. Each Signer is chosen independently. The same Staker can be a signer on the same wallet multiple times. The same Staker can be a Signer on multiple wallets simultaneously.

For simplicity, say there are only three Stakers: Alice, Bob, and Carol. Alice has 250M T, Bob has 400M T, and Carol has 350M T staked, so they own 25%, 40% and 35% of the stake respectively. That means, Alice has a 25% chance to be a Signer, Bob has a 40% chance, and Carol has a 35% chance. Each Signer is selected independently.

The Sortition Pool is more complex (because of heavy gas optimization), but reasoning about it could look like this:
For each Signer, we're going to generate a random number between 1 and 100. Alice is the Signer if the number is in [1, 25]. Bob is the Signer if the number is in [26, 65]. Carol is the Signer if the number is in [66, 100]. For example, if our first random number is 33, our first Signer would be Bob. We can generate 100 random numbers:

`(75, 51, 13, 48, 36, 62, 46, 65, 97, 67...)`

, and then use that to determine Signers: `(Carol, Bob, Alice, Bob, Bob, Bob, Bob, Bob, Carol, Carol...)`

.
This example illustrates a few properties mentioned earlier:- Each Signer is selected independently. Whether or not Carol is the first signer has no influence on Carol being the second Signer.
- The chance that you become a particular Signer is equal to your share of the Stake.

If Carol has a 35% chance of being a particular Signer, what are chances that Carol has at least 51 of the 100 seats (and could control the wallet by herself)?

The number of Signers that Carol controls on a wallet is modeled by the Binomial Distribution. From wikipedia:

A Binomial distribution with parameters`n`

and`p`

is the discrete probability distribution of the number of successes in a sequence of`n`

independent experiments, each asking a yes–no question, and each with its own Boolean-valued outcome:success(with probability`p`

) orfailure(with probability`1−p`

).

This is exactly our situation! From Carol's perspective, there will be

`n=100`

independent experiments, each asking a yes-no question (does this Signer belong to Carol), each with a 35% probability.It's the last figure: "Cumulative probability: P(X>51)" that's relevant. That says there is a ~0.074% chance that Carol would have a controlling Share of any particular wallet.

The next important question is "The probability that Carol controls a Wallet is low, but it only needs to happen once for things to be bad. What is the probability that she controls

*any*wallet in the next 2 years?"A wallet is generated every 14 days, so over the next 2 years, the system would generate ~52 wallets. Each wallet has a

`1 - 0.00074 = .99926`

or 99.926% chance of *not*being controlled by Carol. That means we can exponentiate:$0.99926^{52} = .9622$

Carol would have a ~3.8% chance of getting control of a wallet in 2 years. That's with her owning 35% of the total Stake! Alice has a

*much*lower chance. She has a`0.0002131%`

chance of controlling a wallet, which means that over the course of 52 wallets, she has a `0.02131%`

chance of controlling *any*wallet in 2 years.The only thing that a Staker accomplishes by splitting up their Stake into multiple identities is making the system appear to be more diverse.

For example, say that Alice split up her Stake equally into 5 accounts: Alice1, Alice2, Alice3, Alice4, and Alice5. Now, rather than Alice having a 25% chance to be a Signer, each account has a 5% chance which collectively add up to 25%.

To use the example from earlier: Alice has 250M T, Bob has 400M T, and Carol has 350M T staked. Alice has her T split into 50M for each identity. Alice1 would own 50M/1000M = 5%.
Keeping with the simplification of assigning numbers from 1 to 100 to identities, Alice1 would get [1, 5], Alice2 gets [6, 10], Alice3 gets [11, 15], Alice4 gets [16, 20], Alice5 gets [21, 25], Bob gets [26, 65], Carol gets [66, 100]. If we use the same random numbers as before,

`(75, 51, 13, 48, 36, 62, 46, 65, 97, 67...)`

, then we make the assignments as `(Carol, Bob, Alice3, Bob, Bob, Bob, Bob, Bob, Carol, Carol...)`

. Nothing has effectively changed!

Last modified 21d ago