Block Reward Distribution

Understand peaq validator and delegator rewards, active set selection, and collator commission. Covers reward calculation, snapshots, and session payouts.

Validator & Delegator Rewards

peaq’s tokenomics incentivize the different network participants. Validators maintain the state by running a full node and propose the new blocks.

• Validators together with delegators receive 30% of the total rewards (newly minted PEAQ plus the transaction fees paid by network users). The other 70% goes to the Machine Pool (30%), the treasury (20%) and the Activation Token Provision Pool (20%). See Tokenomics.
• The active validator set consists of up to 42 validators, who are proposing new blocks in a round-robin manner. Any new block is being proposed by a single validator.
• The active validator set renews every round (2400 blocks, about 4 hours at the 6-second target block time; longer when blocks are slower).

Validators enter the active set by total stake: their own stake plus the stake of all their delegations. Only the highest-staked validators are selected as eligible block authors. If the set is full and a new candidate has exactly the same total stake as the last member, the validator that has been in the pool longest keeps the slot.

Delegators stake tokens on the validator of their choice. One validator can be supported by 100 delegators. If a 101st delegator delegates to the same validator, the 100 highest stakes are kept and the lowest-staked delegator is removed from the delegator list.

Collator Commission

Collators set their own commission rate, anywhere from 0% to 100%.

Reward Calculation

Block rewards are calculated from the total network stake rather than from an individual validator’s stake. These factors determine them:

1. Validator commission rate
2. Number of blocks produced by the validator
3. Total stake of all collators and their delegators
4. Individual stake amount

The reward calculation for collators and their delegators:

PotBalance = (Block Reward Per Block * Blocks in Session) + TX Fees

TotalStake = SUM(# of authored blocks * (author's stake + SUM(author's delegator's stake)))

Delegator's Reward = PotBalance * (# of authored blocks * (1 - author's commission) * (Delegator's Stake / TotalStake))

Collator's Reward = PotBalance * (# of authored blocks * (Author's Stake / TotalStake)) + (PotBalance * (# of authored blocks * Author's Commission) * (total delegator's staking number in this validator / Total staking number))

Reward Snapshot

A change to a commission rate or to a stake, and a delegator joining or leaving, all take effect in the next session, not the current one. For example:

1. A validator changes its commission rate from 5% to 10% in session X. Session X is still calculated at 5%, and 10% applies from session X+1.
2. A delegator stakes 100 tokens more in session Y. The extra 100 tokens count from session Y+1.
3. A delegator joins in session Z. Their stake counts from session Z+1.

Reward Distribution

Rewards are distributed in batches per session, not per block. They are accumulated and calculated over a session, then paid out in the following session.

For instance, blocks created by collators A, B, and C during session X will have their rewards distributed in session X+1.