Getting Rewards

The reward distribution system for Lycan Chain ensures that both validators and delegators are incentivized for their contributions to the network. This structure is designed to provide fairness and t

Reward Calculation and Distribution at the End of Epoch

1. Annual Inflation Rate: Rewards are generated based on an annual inflation rate of 2.5%, applied to the total staked amount in the network.

2. Block Rewards: The total block rewards for each staking epoch are distributed among all active validator pools. A staking epoch is a predefined period during which validators participate in consensus.

Detailed Reward Distribution

Step-by-Step Reward Calculation

1. Determine Total Rewards for Epoch:

   • Calculate the total stake amount in the network.

   • Apply the annual inflation rate to determine the new tokens to be distributed as rewards.

   • Example: $\text{newCoinsPerEpoch} = \text{totalStakeAmount} \times \left( \frac{\text{annualInflationRate}}{\text{numberOfEpochsPerYear}} \right)$ Here, numberOfEpochsPerYear depends on the length of each staking epoch.

2. Calculate Pool Rewards:

   • Divide the total rewards equally among all active validator pools.

   • Example: $\text{poolReward} = \frac{\text{newCoinsPerEpoch}}{\text{numberOfActiveValidatorPools}}$

Distribution Within Pools

1. No Delegators:

   • If a validator has no delegators, they receive 100% of the pool rewards.

2. Delegators' Stake ≤ 70%:

   • When the combined stake of delegators is less than or equal to 70% of the pool, the rewards are distributed proportionally:

     • Validator Reward:

       $validatorReward=poolReward×( validatorStake / ​ totalPoolStake )$

     • Delegator Reward:

       $delegatorReward=poolReward×( delegatorStake / ​ totalPoolStake )$

3. Delegators' Stake > 70%:

   • When the combined stake of delegators is less than or equal to 70% of the pool, the rewards are distributed proportionally:

     • Validator Reward:

       $validatorReward=poolReward×0.30$

     • Delegator Reward:

       $delegatorReward=poolReward×0.70×( delegatorStake / ​ totalPoolStake )$

Example Scenarios

1. Single Validator:

   • Stake: Validator - 1,000 coins

   • Reward Distribution: Validator - 100%

2. One Delegator:

   • Stake: Validator - 1,000 coins, Delegator - 250 coins

   • Reward Distribution: Validator - 80%, Delegator - 20%

3. Multiple Delegators (≤70% Stake):

   • Stake: Validator - 1,000 coins, Delegators - 2,000 coins

   • Reward Distribution: Validator - 33.33%, Delegators - 66.67%

4. Multiple Delegators (>70% Stake):

   • Stake: Validator - 1,000 coins, Delegators - 3,000 coins

   • Reward Distribution: Validator - 30%, Delegators - 70%

Claiming Rewards

Participants can claim their rewards by invoking the claimReward function, specifying the staking address of the pool. This function transfers the participant's portion of the reward from the reward contract balance to their personal balance.

Additional Reward Components

• Transaction Fees: Collected by validators for transactions processed in their blocks.

• Bridge Fees: Collected when assets are transferred between chains and distributed among validators and delegators according to their stakes.

Summary

The reward distribution system on Lycan Chain is designed to be fair and incentivizing for both validators and delegators. By ensuring proportional and capped rewards, the system promotes active participation and network security. The detailed calculations and examples provided help clarify how rewards are calculated and distributed among participants.