PAW Documentation

Validators/Delegators

Validators/Delegators

The PAW Chain Validator and Delegator Program is designed to maintain the PAW Chain network by contributing to its security and functionality. The program ensures a robust system for validators and delegators who play crucial roles in maintaining the blockchain's integrity.

System Economic Model

The fee totals reward in the PAW Chain ecosystem is distributed in a structured manner to ensure fair compensation for both validators and delegators, as well as to support the continuous development and growth of the network.

Block Reward Distribution

Overall Distribution: The PAW Chain ecosystem is distributed in a structured manner to ensure fair compensation for both validators and delegators, and to support the continuous development and growth of the network.

       

Validator Reward and Treasury Allocation:

  • System Maintenance Fee: This portion of the block reward supports the network's operational and development needs.
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  • Gas & Transaction Fees: A significant portion (35%) of the System Maintenance Fee is allocated for block rewards, ensuring sufficient funds for network renovations, improvements, and operations.
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  • 45% to Treasury: Supports the ongoing operations of the PAW Chain ecosystem.

Validator Compensation

Blocks validated: The majority (85%) of the block rewards allocated to validators, who implement transactions and secure the network.

       
  • 80% to Validator's Share: Where the 80% allocated to validators, they retain 90% as direct rewards, incentivizing high performance and reliability.
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  • 20% to Delegators: The remaining 10% of the validator's share is distributed among the delegators, who contribute to network staking and security.

Validator/Delegator Reward Breakdown

If a validator provides collateral independently, they retain 100% of the reward share. However, if validators operate as a Delegator's delegate for collateral, rewards are shared according to agreed-upon percentages.

Example: If validator's collateral requirement is 1000 tokens and they provide only 900 (90% retained), they reserve 90% of the reward share. The remaining 10% is distributed among delegators based on their stake in the validator's pool.

The breakdown ensures fair distribution of rewards among validators and delegators, supporting the network's stability and growth.

Validator/Delegator Reward Breakdown

If a validator provides collateral independently, they retain 100% of the reward share. However, if validators operate as leaders/delegates for collected rewards as shared according to group or consortia agreements.

Example:

If validators' collateral requirement is 100 million tokens and they provide 60% (60 million tokens), they receive 90% of the reward share. The remaining 10% is distributed among delegators based on their stake in the validator's pool.

The breakdown ensures fair distribution of rewards across validators and delegators, supporting the network's stability and growth.


Block Rewards

Validator amount - X

Collateral amount = a

Validator1 = y1

Validator2 = y2

Validator3 = y3

Validator 1 Share = z1 = y1 / (y1 + y2 + y3)

X - a = q

Validator 1 Percentage = ((q / a) * 100)%

Block Rewards

The diagram above details the distribution of block rewards in a blockchain system, demonstrating how the rewards are allocated to different participants and entities. The following is a description of the reward distribution process:

       
  • The total block rewards are divided into two main categories: 95% is designated as Validator rewards, and 5% goes directly to the Validators.
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  • The Validator Reward is further split, with 60% allocated to the treasury and 40% going to developers (Dev).
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  • The remaining 50% of the validator's reward is distributed among delegator categories.
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  • One delegator receives 5%
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  • Another delegator receives 6%
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  • A third delegator receives 1%

This structure ensures that both the validators and delegators are remunerated, while also supporting the treasury and development functions of the blockchain, ensuring the ecosystem's continual growth and sustainability.


Block Reward - BR

When calculating the fees, we have to consider Treasury and developers' reward (α), Validator rewards (β), pool participants (γ), Validator liquidity percentage (δ), and Delegator liquidity (θ).

The calculations show how the block rewards are allocated to validators and delegators, ensuring fair distribution and promoting network health and decentralization.