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DocumentationStakingRewards

Rewards

The reward mechanism is based on the NPoS protocol, with some customizations specific to the Analog network. The reward mechanism will be executed through a two-phased methodology:

Current system:

  • Rewards are funded by a 2% pre-allocation from the Future Initiatives Pool (see Tokenomics Paper  for more details).
  • Validators earn rewards for block production from the designated pool, while nominators share rewards proportional to their stake.

The protocol does not mint new tokens as of now; it distributes rewards from the allocated pool of 2%. The total supply, capped at 9,057,971,000, remains unchanged from the TGE date.

Future inflation model:

  • Controlled inflation (1–4%) will replace pre-allocated rewards. See Tokenomics Paper  for more details.
  • Inflation parameters (rate, staking thresholds) that are adjustable via governance will largely determine the rewards mechanism. For example,
    • Low staking rate → Higher potential APY → Stake more to earn more profit.
    • High staking rate → Lower potential APY → Stake less and use ANLOG elsewhere.
  • For more details, read the Tokenomics Paper .

Rewards Calculation

Rewards in Analog are calculated per era (12 hours) and distributed to validators based on era points earned. Era points are awarded for actions such as:

  • Authoring blocks on the Timechain
  • Producing references to previously unreferenced blocks

Validators receive rewards proportionally to their earned era points, regardless of their total stake. This approach prevents centralization by ensuring validators with larger stakes don't automatically receive more rewards.

Example:
If the network distributes 1,000 $ANLOG tokens in an era, and there are 4 validators with equal era points:

  • Each validator would receive 250 $ANLOG tokens
  • These rewards are then shared between the validator and its nominators after the validator commission has been deducted.

Validators set a commission rate as a percentage of block rewards. This commission is deducted before distributing the remaining rewards to nominators.

Example:

  • Given a 1,000 $ANLOG token distribution per era, equally split between 4 validators, and validator Alice's 10% commission rate:
    • Alice will receive 250 $ANLOG in rewards
    • 25 $ANLOG (10%) goes to Alice as commission
    • The remaining $225 ANLOG is distributed proportionally between Alice's self-stake and her nominators.

For nomination pools, pool operators can also set commissions that apply to rewards before distribution to pool members:

  • Commission Rate: The percentage of rewards taken by the pool operator
  • Max Commission: The maximum commission rate the pool can charge
  • Change Rate: The maximum rate increase allowed for a single commission update

Example:

Assuming a pool with a 10% commission receives 1,000 $ANLOG in rewards:

  • 100 $ANLOG goes to the pool operator
  • 900 $ANLOG is distributed proportionally to pool members based on their contribution

Claiming Rewards

Due to Substrate's design, validator and nominator rewards in Analog are not automatically distributed and must be claimed via transaction.

For Direct Nominators (to be implemented later)

  1. Rewards can be claimed by calling the staking.payoutStakers function
  2. Anyone can trigger the payout for all nominators of a validator
  3. Rewards must be claimed within 84 eras (approximately 42 days) before they expire

For Pool Members

Pool members can claim their rewards in two ways:

  1. Manual Claiming: Navigate to the Pools tab in the staking dashboard and select either:

    • "Withdraw" to add rewards to your transferable balance
    • "Bond" to compound rewards by adding them to your staked amount.

  2. Permissionless Claiming: Enable others to claim rewards on your behalf by setting permissions:

    • Permissioned: Only you can claim/bond rewards.
    • PermissionlessCompound: Permits others to claim and bond your rewards
    • PermissionlessWithdraw: Permits others to claim rewards to your transferable balance
    • PermissionlessAll: Permits both compounding and withdrawing actions by others

    For more details, see Permissionless Claiming.

Network ParametersBoosted Rewards Campaign