Validation-client Economics

Validator-clients are eligible to receive protocol-based (i.e. via mining pool) rewards issued via stake-based annual interest rates by providing compute (CPU+GPU) resources to validate and vote on a given PoH state. These protocol-based rewards are determined through an algorithmic schedule as a function of total amount of Solana tokens staked in the system and duration since network launch (genesis block). Additionally, these clients may earn revenue through two types of transaction fees: state-validation transaction fees and pooled Proof-of-Replication (PoRep) transaction fees. The distribution of these two types of transaction fees to the participating validation set are designed independently as economic goals and attack vectors are unique between the state- generation/validation mechanism and the ledger replication/validation mechanism. For clarity, we separately describe the design and motivation of the three types of potential revenue streams for validation-clients below: state-validation protocol-based rewards, state-validation transaction fees and PoRep-validation transaction fees.