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x/distribution

Introduction​

The distribution module is responsible for the distribution of rewards to the validators and delegators.

Overview​

Rewards​

There are two main types of rewards

  • Block rewards, governed by the mint module; and
  • Transaction fees bonus.

Block reward​

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

For the validator operator, the distribution information is updated if:

  • the amount of delegation to a validator is updated (delegation, unbond, slashing, etc.)
  • a validator successfully proposes a block and receives the reward
  • any delegator withdraws from a validator, or
  • the validator withdraws it's commission.

For delegators, once they have delegated to a validator, they will be entitled to a portion of the total reward obtained by the validators. The reward is proportional to their delegated amount, and the commission charged by the validator operator (if any).

Transaction Fees Bonus​

When a validator is selected to propose the next block, they must include at least 66% precommits of the previous block. To incentivise validators to include more than 66% precommits, the module provide a bonus reward (portion of the transaction fee in the block) to the proposer.

This bonus reward is dependent linearly on the precommits from the other validators. Starting from 66% of the precommits, the basic bonus will be base_proposer_reward and increase linearly to bonus_proposer_reward when the validator includes 100% of the precommits.

This mechanism aims to incentivize non-empty block proposals, better networking between validators as well as to mitigate censorship.

Community tax​

The community_tax is the tax rate of the reward obtained by the validator. Specifically, part of the reward will be taxed and sent to the community pool. The funds in the community pool can be withdrawn by submitting a community pool spend proposal with the gov module.

Even if the community_tax is set to be zero, the balance of the community pool could be non-zero. For example, the truncated remainder in some accounting edge cases will be sent to the community pool as well. Besides that, users can fund the community pool voluntarily, and there could be funds allocated to the community pool in the genesis.

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