Rewards & Voting Process
You will receive a block reward at the successful completion of minting a block. Using the SafeCoin explorer you are able to select the block that you led and see your rewards.
A validator votes to show that it agrees with the published transactions on the network through the Proof-Of-History consensus method. This provides consensus on transactions put forward by the leading validator.
Voting is one great indicator of how your validator is performing, a machine with higher successful votes indicates stability and performance. More votes also equate to more reward in proportion to activated stake.
A leading Validator, also known as the ‘Leader’ is responsible for adding entries to the blockchain ledger. It does this through organizing transactions in an efficient Proof-of-History order and then submitting this to the rest of the validators on the network for consensus. The leading validator is randomly selected and can be ousted if ⅔ or more of the validators reject the proposed block.
The leader is changed out periodically as to not give anyone computer too much power and give all validators a chance at earning rewards.
All other validators know who the leader should be before they are selected so no one can ‘fake’ being the leader.
Validator Identity - This is your unique ID for your validator on the network. It is also the account that pays for voting fees and receives rewards from block production. You’ll always need to keep some SAFE in here (there is no set amount needed, yet without any SAFE you are not able to participate in voting). We’d suggest keeping a minimum of 10 SAFE per 10000 SAFE staked. Please note, this account will not automatically replenish and requires being manually topped up to continue voting.
Voting Identity - This is the account that votes as a part of the network's Proof-Of-History consensus algorithm. If running a validator this is where your commission will be located
Local Wallet - For storage of your personal, non-staked SAFE. This should be stored on a different computer than the validator ID and voting ID accounts.
Staking Account - Where your stake is locked in & delegated to a validator. This is also where your rewards from staking will automatically be placed, thus adding them to your total staked coins is compounding. This should also be stored on a different computer than the validator ID and voting ID accounts.
When you set up a new validator, you create the four accounts listed above. You start out by putting some SAFE in your Validator Identity Account to pay for voting fees.
Then you move SAFE from a Cold Wallet into your Staking Account (a minimum of 10,000 SAFE is recommended to stay profitable if running a validator) so that it can add influence to the validator. It is recommended that your staking account is located on another computer, or at least a different virtual machine if it must reside on the same computer as the validator.
There is minimum or maximum limits on how much stake is attached to a Validator. You want to make sure you have enough to stay profitable as suggested above.
The staking account can be created on any computer or virtual machine that can run Linux.
As your validator runs, it generates staking rewards that are proportionate to the amount of SAFE you have staked to your validator. These rewards get paid out from the network to all of the delegators that are currently staking to your validator (yours and any external delegators you have helping you).
Over the course of this process, your validator votes to help maintain the integrity of the ledger. Voting costs a certain amount of SAFE, and that comes out of your Validator Identity Account. That you need to replenish if it gets low.
At some point, your validator may be selected to be the leading validator (Leader) and it writes a block to the ledger. It then receives a reward of half the transaction fees from that block (called a block reward). This block reward is paid out to your Validator Identity Account.
The staking reward is based on the total amount of SAFE staked, successful votes, and a predetermined inflationary rate.
A block reward is set at 50% of transaction fees associated with the block produced.
Commission (or validator fee) is set by the validator owner.