The Orbs network launched on March 28th, 2019. The Orbs network relies on all of the participants in the proof of stake ecosystem to provide for the security and operation of the network. There are 17 active Guardians currently registered and 14 Validators running in production. There are now over 1300 Delegators participating in the Orbs PoS ecosystem. At the beginning of July 2019, the first rewards distribution will occur. This post describes the various rewards, how they are calculated and the distribution process.
Rewards are accumulated following every election cycle. There are 3 types of rewards: Participation Rewards, Guardian Excellency Rewards, and Validator Rewards. Active Guardians are eligible for Delegator rewards for their own stake. It is important to note that the same address can be eligible for all 3 types of rewards, i.e. a Validator can serve as a Guardian, and also receive self-delegation rewards. The accumulated rewards for a specific address are available here: https://orbs-network.github.io/voting/reward
Participation Rewards (Delegators and Guardians)
Token holders that delegate their voting weight to an active Guardian directly or indirectly, are rewarded proportionally to their stake. In order to receive the delegation reward for an election term, Delegators must have delegated to a Guardian that participated in the election. An annual aggregate sum of 60M ORBS tokens is allocated to reward participation (of Delegators or Guardians). The reward allocation per election term is determined as a fraction of the annual allocation proportional to the duration of the election term. Participants are rewarded in proportion to the stake they own and delegate at the time of each election event. The rewards are calculated at the end of each election term. The reward allocated to any specific Participant at any specific election term shall be capped to such Participant’s delegated stake for that election term multiplied by 8% divided by the annual number of election periods (for detailed calculation, see “Rewards calculation” section below).
Guardian Excellency Rewards
Guardians enforce the security of the network and are rewarded for their own stake as part of the participation reward (described in the previous section). In order to encourage Guardian participation, top-ranking Guardians are also rewarded with the Guardians Excellence Program. An annual aggregate sum of 40M Orbs is allocated to reward top-ranking Guardians for their work. The reward allocation per election term is determined as a fraction of the annual allocation proportional to the duration of the election term. In each election term, rewards will be allotted to the 10 leading Guardians that actively participated in the elections, ranked by the amount of stake delegated to them (including their own stake) in that election. The Guardian Excellency reward is distributed to Guardians in the top 10 group (in proportion to that stake). The rewards are calculated at the end of each election term. The reward allocated to any specific Guardian at any specific election term shall be capped to such Guardian’s total delegated stake for that election term multiplied by 10% divided by the annual number of election periods (for detailed calculation, see “Rewards calculation” section below).
Validators are rewarded for running the network protocol and the actual steps they take to keep the network active and secure. The Validators rewards comprise:
- 4% annual rate of the Validator own stake. Awarded for the duration the Validator was elected
- Fees paid by any applications which may run on Orbs, divided equally between the active Validators
- Validator Introduction Program – 1M ORBS tokens per Validator, on an annualized basis. Awarded in proportion to the duration the Validator was elected, for the duration of the Validator Introduction Program.
Rewards Distribution Process
- Rewards will be distributed at the beginning of July (exact schedule to follow).
- The rewards will be pushed to the recipients’ addresses on Ethereum.
- The rewards will comprise the accumulated rewards for each address (for all its relevant roles), up until (and including) the 27th elections, which will be based on Ethereum block number 8048900, which will occur at the end of June (https://etherscan.io/block/countdown/8048900)
The rewards calculation is available in the “Orbs PoS Ecosystem” document (https://www.orbs.com/proof-of-stake-ecosystem/). The calculations will be published in parallel with the actual rewards distribution so that anyone can retrieve the relevant information from the Ethereum network and confirm the calculations. An example of calculated rewards for the 19th election cycle is available here. Note – these rewards are just for the 19th election cycle, NOT the total accumulated rewards.
The actual calculations
For elections and rewards calculation purposes, only whole ORBS tokens are considered:
- For example, for a Delegator stake of 15,240.13 ORBS the participating stake is 15,240 ORBS
- This “whole ORBS only” approach is carried throughout all calculations
Number of election periods in a year = 117.23
- This calculation is based on the original blockheight progression on the Ethereum network
- Elections occur every 20,000 Ethereum blocks
Per election Validator reward = validator_stake * (4%/num_periods) + (1M / num_periods)
- At this point, there are no application fees on the network
Per election Guardian Excellency reward = top10_guardian_reward_ratio * guardian_total_voting_power
- Where top10_guardian_reward_ratio = MIN(10%,(40M / sum_of_top10_guardians_total_voting_power)) / num_periods
- This reward is for the Top 10 (by their total voting power) of the Guardians who voted in this election round
Per election Participation reward = delegator_reward_ratio * delegator_stake
- Where delegator_reward_ratio = MIN(8%,(60M / all_participating_stake))/num_periods
Reward calculation fixes
Lately, one of the Guardians notified the core team regarding an issue with rewards calculations. The core team has researched the issue and discovered a bug (an incorrect spec implementation) in the reward calculation contract. This bug caused a miscount for a small number of delegations, affecting 29 participating addresses, to the total sum of 89,668 ORBS (less than 0.5% of the projected total rewards for the first 3 months). A fix for this issue was approved and deployed by the Validators. The affected participants will be compensated manually by Orbs sending them the difference, after the general rewards distribution. Click to view the list of affected addresses.
The upcoming rewards distribution marks a milestone in the Orbs network journey. We are all excited to see what’s next for Orbs and look forward to the entire ecosystem working together to make the Orbs vision a reality!