Dividends for Validators

How we got here

Subnet Emission: tao and alpha

Alpha Distribution Mechanisms

How are emissions calculated for Validators?

VTrust

1. Validators test miners and create a weighted list of scores. These are submitted to Yuma Consensus.
2. These scores are compared to the other validators — each validator is judged to be in consensus with the rest of the validators.

If a validator is judged to be out of consensus, their VTrust (validator trust) decreases. VTrust is a value between 0 and 1, where 0 is terrible and 1 is perfect.

Stake Weight

The other input to validator emissions is stake weight. Validators with higher stake weight receive higher emissions.

• root_stake: TAO staked to a validator on root.
• tao_weight: defined on chain as 0.18.
• alpha_stake: alpha staked to a validator on the subnet.
• total_stake: the value used to determine emissions.

Dividends

Dividends are the percentage of total validator emissions awarded to each validator. They are calculated from VTrust and total_stake. High stake and high VTrust lead to high dividends, and high dividends yield high emissions.

• The sum of all dividends on a subnet is 1.
• The dividend score is calculated once per tempo (360 blocks for most subnets).

Calculating Validator Emission

• Validators receive 41% of the alpha_out subnet emission.
• The validator’s dividend score gives the fraction of the validator alpha that is awarded.

Emission math example

A subnet receives 1 alpha_out per block.

In 1 epoch: 1 × 360 = 360 alpha.

Validators receive 41% of the subnet’s emissions: 360 × 0.41 = 147.6 alpha.

Validator X has dividends of 0.006: 147.6 × 0.006 = 0.8856 alpha per epoch.

If this validator has parent hotkeys, this is divided amongst the validators based on stake (see Emission for Parent/Child Hotkeys).

It is then divided into root emission (converted to TAO) and alpha emission — see Emissions: Root vs. Alpha Stake.

Validator rewards

The validator’s subnet emission is further split by several factors:

• Parent hotkeys receive their percentage of the stake.
  • The validator may take a child_take from this emission.
• Each subnet has a root:alpha proportion that divides the emissions.
• Both alpha and root proportions may have a validator take.
  • This is the reward for the validator.
• The remaining root and alpha reward is divided amongst stake nominators.

Next Steps

• Emission for Parent/Child Hotkeys — dividing dividends to parent/child hotkeys.
• Emissions: Root vs. Alpha Stake — dividing between root & alpha proportions.
• Stakeholder Emissions: Root & Stakeholder Emissions: Alpha — distribution of emissions to stakeholders.