Validator Rewards
Running a validator node on the Tangle Network allows you to connect to the network, sync with a bootnode, obtain local access to RPC endpoints, and also author blocks. The network rewards successful validators (users running validator nodes and actively producing blocks) by paying a set amount of network tokens as rewards. Validators are chosen using an algorithm AURA (opens in a new tab) that works to give every validator in the active set, a chance at authoring a block.
How Rewards are Calculated
The validator rewards are paid out every block. The rewards consist of multiple components:
- Transaction fees from all transactions in the block
- Tips paid by users
- Network reward amount
The validator reward is initially paid out from the validator reward pot allotted at the time of genesis. Once the initial genesis supply for validator rewards has been exhausted, the network will issue a new amount of currency (at a predetermined rate of inflation) every block to continue rewarding the validators. The block authors are chosen using Aura and ensures every validator gets a chance at block authoring.
Reward Payout Schedule
The validator rewards are paid out every 100 blocks. Please note that simply authoring a block does not guarantee a reward. The block has to be accepted and finalized in the canonical chain for the payout to be valid. Also, remember that rewards are only paid out to block authoring validators - simply running a full-node does not make you eligible for a reward.
Payout Example
Let's say Alice is running a validator node on the Tangle Network and her node just authored a block. For simplicity, let's consider the block contains 100 transactions each paying 0.1 TNT in transaction fees, and 5 transactions each with a tip of 1 TNT.
This block has generated a total of 15 TNT in transaction fees and tips. The transaction fee is divided between the treasury and block author in an 80:20 split. Also, let's assume the RewardAmount for the Tangle Network is set at 25 TNT.
For the above block, the reward paid to Alice's account is as follows:
| Component | Payout |
|---|---|
| TransactionFees | 2 TNT |
| Tips | 5 TNT |
| Network Reward | 25 TNT |
| Total Payout | 32 TNT |