Key Points
- See the 8-year schedule of future Staking and Bridge Rewards in our Staking Reward Schedule.
- Use our formula to calculate RON staking rewards.
- We’ve set aside Bridge Rewards of 8M RON over 8 years, and have committed 1M RON for Bridge Rewards for year 1.
Rewards: On Schedule
Our mission to onboard the next generation of Web3 games is just getting started. That’s why we’ve designed an 8 year reward schedule – starting in 2023 and ending in 2031 – that builds towards a future where Ronin is more decentralized and better sustained by transaction fees. This is the RON Staking Reward Schedule we will implement after the upgrade to DPoS is complete.
In years 1 to 8, the RON Staking Reward Allocation will subsidize a decreasing amount of RON rewards starting at 30M in Year 1 and ending at 6M in Year 8. That means higher rewards early in the schedule – for both Validators and Delegators – that taper down year over year as we bootstrap transaction activity. We envision the long-term staking yield to be around 10%, but initial staking yields may be higher depending on the amount of RON staked.
You might notice that we’ve made adjustments to the previous RON unlock schedule. In essence, we’ve taken 5% of the total RON supply intended for years 9 to 24 and spread it out into the 8 year schedule above. This fits our approach to grow the ecosystem faster in the early years because it allows greater rewards and a larger budget to create positive incentives for the community. While this increases the circulating supply of RON by the end of year 8, total RON supply remains capped at 1B. We’d also like to clarify that a portion of the staking rewards allocation was used for Katana Liquidity Pool Staking rewards which was used to bootstrap RON ownership with the community. The updated unlock schedule will be available in the whitepaper on roninchain.com soon.
How RON Staking Rewards Will Work
When Staking Rewards are live, the top 10 validators by RON staked will be selected to produce blocks which emit rewards. This means validators capable of emitting rewards may change from day to day: we encourage delegators to choose validators with this in mind. Here’s how rewards will be distributed:
First, a validator produces a block which emits a RON reward of ~2.85 RON per block (based on 30M RON rewards in Year 1). Then, the reward is divided between the validator and its delegators based on how much RON each contributed. Finally, the validator receives a % of that 2.85 RON reward called their commission rate. See the formulas where C is the commission rate in % terms and R is the total RON reward with an example using whole numbers below.
Validator Reward: (Initial Stake / Total Stake) * (1 - C) * R + C * R
Delegator Reward: (Initial Stake / Total Stake) * (1 - C) * R
Validator’s Commission: C * R
Let’s walk through a simple example with round numbers.
Imagine a validator sets their commission rate to 10%, and has a total stake of 10,000 RON: 9,000 RON from delegators and 1,000 RON from the validator itself.
If the validator earns 10 RON from producing blocks, they will keep 1.9 RON while delegators will share 8.1 RON from the total block reward.
Commission: 10% of 10 RON = 1 RON
Validator Reward: (1,000 / 10,000) * (1 - 10%) * 10 + Commission = 1.9 RON
Delegator Reward: (9,000 / 10,000) * (1 - 10%) * 10 = 8.1 RON
In this example, the validator earns 1.9 RON while the delegators will share 8.1 RON amongst each other.
What Are Bridge Operators Rewards?
Bridge Operators process deposits and withdrawals between Ronin and Ethereum currently. As the bridge currently doesn’t charge fees, incentives will be required to offset the costs of secure bridge operation. Each validator must maintain a bridge operator to claim their block rewards. We’ve set aside Bridge Rewards of 8M RON over 8 years, and have committed 1M RON for Bridge Rewards for year 1 while we research more sustainable bridge designs.
Final Thoughts
Thank you to our powerful Ronin community for your stalwart commitment to our vision. We know how long you’ve been looking forward to RON Staking, and we’re thrilled to announce that it’s almost here.
🌱| Litepaper
