Rewards, Fees and Parameters

Rewards

There are several reward mechanisms available with the protocol software.

Staking Rewards

• Rewards distributed to Validators and Stakers (= Delegators)
• Staking Rewards = Trading Fees + Gas Fees - Community Tax - Validator Commission
• Distributed automatically every block
• Must be claimed manually

See more on Staking Rewards.

Trading Rewards

• Rewards distributed to Traders after each successful trade
• Based on a specified formula with several inputs
• Distributed automatically every block with successful trades
• Claimed automatically

See more on Trading Rewards.

Fees

The fee schedule is subject to adjustments by the applicable Governance Community

The basic structure for fees have been developed to reflect the following characteristics:

1. Fees differ based on side (maker/taker)
2. Users are eligible for lower fees based on their 30 day trading volume across sub accounts and markets
3. Fees are uniform across all markets

Parameters

Below is a summary of various notable parameters and what they mean for any chain utilizing the open source software. Parameters will be subject to adjustments by the applicable Governance Community and can be set to different values at Genesis by any deployer.

This parameter establishes whether transfers for any tokens are enabled at Genesis. Transfers will be enabled.

The open source software will not pre-populate any bank-state on the network. Validators who participate in Genesis have the ability to determine the network’s initialized state.

These parameters establish punishments for detrimental behavior by validators.

SignedBlocksWindow: Together with MinSignedPerWindow, specifies the number of blocks a validator must sign within a sliding window. Failure to maintain MinSignedPerWindow leads to validator being jailed (removed from active validator set).

SlashFractionDownTime: Defines the slashing-penalty for downtime

DownTimeJailDuration: How long before the validator can unjail themselves after being jailed for downtime.

Double-signing by a validator is considered a severe violation as it can cause instability and unpredictability in the network. When a validator double-signs, they are slashed for SlashFractionDoubleSign, jailed (removed from validator set) and tombstoned (cannot rejoin validator set).

These parameters handle the distribution of gas and trading fees generated by the network to validators.

CommunityTax: Fraction of fees that goes to the community treasury. The software will initially reflect a 0% community tax.

WithdrawAddrEnabled: Whether a delegator can set a different withdrawal address (other than their delegator address) for their rewards.

These parameters define how staking works on the protocol and norms around staking.

*MaxValidators and UnbondingTime are particularly subject to change based on public testnet data and feedback.

MaxValidators: Every block, the top MaxValidators validators by stake weight are included in the active validator set.

UnbondingTime: Specifies the duration of the unbonding process, during which tokens are in a locked state and cannot be transferred or delegated (the tokens are still “at stake”).

MinCommissionRate: The chain-wide minimum commission rate that a validator can charge their delegators. The default commission rate will be 100%.

These parameters define how governance proposals can be submitted and executed. For more information on the governance module and its associated parameters, head to the official Cosmos SDK docs.