Rewards Mechanism¶
The XDC Network operates on a Delegated Proof of Stake (XDPoS) consensus mechanism, which allows for high transaction throughput, energy efficiency, and security. The network’s rewards mechanism is designed to incentivize Masternode operators and participants who contribute to the stability, security, and growth of the network. This document outlines how the XDC rewards mechanism works, who is eligible for rewards, and how rewards are distributed.
Overview of XDC Rewards System¶
In the XDC Network, rewards are primarily distributed to Masternode operators who validate transactions, secure the network, and propose new blocks. Additionally, XDC token holders who delegate their tokens to Masternodes also earn a share of the rewards. The rewards mechanism is structured to:
Incentivize decentralization by encouraging more participants to run Masternodes or delegate their tokens. Reward active participation in the network, such as block validation and staking. Ensure the economic sustainability of the XDC Network over time.
Masternode Operator Rewards¶
Masternodes are critical to the XDC Network’s operations, responsible for validating transactions and maintaining consensus. To compensate for their role, Masternode operators receive rewards for every block they validate.
- Eligibility: To run a Masternode, an operator must stake a minimum of 10 million XDC tokens.
- Reward Distribution: Masternode operators are rewarded for validating blocks, and the rewards are distributed proportionally based on their performance and uptime.
- Block Rewards: A fixed reward is allocated for each block validated by the network. These block rewards are divided among Masternodes based on their contribution to the network.
Note: Masternodes with better uptime and performance will receive a higher portion of the rewards.