Mining rewards is now 86% APR.


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:



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%

Calculation done!


Just so everyone is clear, 86.6% is not a real APR, it’s the APR you can expect on 1750 PRV. As the value of PRV goes up and down, you will earn more or less in real value. I’ve bought PRV to fund nodes from $0.20 to $2.50, so my real APR is much less. If you buy in today and the value of PRV goes down, your real APR may even go below 0, and you could lose value.

I haven’t done the math to tell whether I’ve lost or gained anything from running my nodes, but I am probably down overall. This is a very real risk that no Crypto project is going to highlight or draw attention to.

I see the nodes as assets that pay me income every month, like dividends, so it softens the blow a bit. As long as PRV has value I’ll be able to wait it out and eventually earn the losses back. Who knows, maybe PRV goes back to $3.