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How are rewards distributed?
How are rewards distributed?
Dan Prompakdee avatar
Written by Dan Prompakdee
Updated over a week ago

Block rewards are distributed proportionally to all validators relative to their voting power. This means that even though each validator gains SHR with each reward, all validators will maintain equal weight over time.

Let us take an example where we have 10 validators with equal voting power and a commission rate of 1%. Let us also assume that the reward for a block is 1000 SHR and that each validator has 20% of self-bonded SHR. These tokens do not go directly to the proposer. Instead, they are evenly spread among validators. So now each validator's pool has 100 SHR. These 100 SHR will be distributed according to each participant's stake:

Commission: 100*80%*1% = 0.8 SHR

Validator gets: 100\*20% + Commission = 20.8 SHR

All delegators get: 100\*80% - Commission = 79.2 SHR

Then, each delegator can claim their part of the 79.2 SHR in proportion to their stake in the validator's staking pool.

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