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About ZETA Token
Validator Incentives

Validator Incentives

Validator incentives are structured such that operators are remunerated for their efforts in securing the network, offsetting operational costs and risk involved in staking ZETA to run a Validator. Although the proportion of distribution over time may be changed via parameter changes/protocol upgrades, the amount dedicated to rewards is fixed.

Validators provide consensus for ZetaCore (ZetaChain’s base blockchain), supporting general PoS mechanics and delegation from users. Anyone can run a validator to earn rewards by securing the network. Fees from transactions and rewards are distributed to validators in return for their service of processing transactions and keeping the network secure. Users may delegate stake to any existing operator, or run their own validator.

The initial 10% total supply pool of validator incentives are programmed to distribute over the first 4 years after the launch of the network. Emissions are fixed based on time/block. Validators earn emissions based on this curve and their securing the network.

As this initial genesis pool tends lower, the protocol will introduce a planned 2.5% inflation through validator rewards separate from the emission curve at a certain block height. This inflation rate, at this shift, will replace the existing rate of validator emissions. Beyond this time, the inflation rate will be introduced and adjustable by the network via governance.

In addition, there is a factor of the bonded ratio and a target bonded ratio that is bounded. If the bonded ratio goes over the target, the emissions will reduce, and if the bonded ratio goes lower, the emissions will increase, helping incentivize more or less staking/bonding over time. However, the core emission curve and pool remains the same.

Any stake has an unlock period of 21 days. Rewards are allocated to delegators/stakers, but to withdraw them, one must wait 21 days to receive them.

To ensure network liveness and safety, deviation from the protocol by the validators will be penalized by slashing their bonded ZETA. This includes standard Cosmos SDK defined slash-able violations such as missed votes on blocks and conflicting votes on blocks.

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