Validation Rewards and Distribution
To calculate validator rewards, AirDAO uses a unique system called Elastic Block Rewards to distribute rewards to users running validator nodes on their blockchain. This system dynamically adjusts the total amount of block rewards based on the percentage of circulating AMB tokens that are staked. The more AMB tokens staked in the network, the higher the total block reward becomes. This creates a system that maintains reward incentives for node providers even if very few
There's a minimum block reward of ~14 AMB awarded even when a small portion (less than 13%) of circulating tokens are staked. This ensures some level of reward is always given.
The block reward increases to ~33.90 AMB at 50% of the circulating supply staked.
The maximum theoretical block reward is ~60.8 AMB, which would occur if nearly all circulating AMB tokens (100%) were staked. However, this is practically impossible as some AMB would naturally be circulating outside the staking system.
The reward token distribution users get depends on how long they've been running their node. Validator node rewards on AirDAO are split between rewards paid in $AMB and rewards paid in $BOND. New nodes get a smaller portion of $AMB tokens paid out to them, with the rest of the reward paid in $BOND. The older a node is, the more favorable to $AMB this proportion is. After three years, all rewards paid out to node operators are exclusively in $AMB. These can be traded on Kosmos: Bond Marketplace for other digital assets, including more AirDAO tokens or tokens from other projects entirely. Below is the breakdown of each threshold and the rewards users receive from them:
New Nodes: 25% immediate rewards available in AMB on the first day and 75% in $BOND tokens.
One Year+ Nodes: 50% immediate rewards in AMB (the incremental increase will be equal to approximately 1% within two weeks).
Two Year+ Nodes: 75% immediate rewards in AMB.
Three Year+ Nodes: 100% immediate rewards in AMB.
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