As you already know, the Incognito network is run by validators and validators will earn mining rewards as long as they help verify transactions and build the network.
The rewards will be distributed equally among the validators. Previously, the number of fixed nodes run by the core team made up the majority.
As we keep moving forward decentralization, the number of fixed nodes reduced to 16 at the moment, only accounting for 34% of the network committee. As a result, 66% of the shard committee rewards will be offered to the community.
Then, the interest you can earn might increase up to 86% APR.
Let’s look closely at the calculations that make the rate of 86% APR reasonable.
First of all, the total PRV reward each validator can earn per month is calculated as follows:
PRVRewardPerValidator = (PRVRewardInMonth - PRVRewardInMonth * YEAR_DAO_RATE - BEACON_REWARD_PRV - FIXED_NODE_REWARD_PRV) / (activeValidator - BEACON_NODE_COUNT - FIXED_NODE_COUNT * SHARD_COUNT)
averageAPR = PRVRewardPerValidator * 100 / 1750 * 12
To be specific:
YEAR_DAO_RATE = 7% - the percentage of block rewards granted to DAO
BEACON_REWARD_PRV = 18673 - the amount of PRV rewards paid to Beacon chain validators per month
FIXED_NODE_REWARD_PRV = 168192 - the amount of PRV rewards paid to Shard chain’s fixed nodes per month
item.activeValidator = 3500 - the number of validators at the moment
BEACON_NODE_COUNT = 7 - the number of Beacon chain’s nodes
FIXED_NODE_COUNT = 16 - the number of each Shard chain’s’ fixed nodes
SHARD_COUNT = 8 - the number of shard network
Substitute numbers into the formula and we will get
% APR = (595,123.2 - 595,123.2 * 7% - 18673 - 168192) / (3500 - 7 - 128) * 12 * 100 / 1750 = 86.6%