Replication-validation Transaction Fees

As previously mentioned, validator-clients will also be responsible for validating PoReps submitted into the PoH stream by replicator-clients. In this case, validators are providing compute (CPU/GPU) and light storage resources to confirm that these replication proofs could only be generated by a client that is storing the referenced PoH leger block.2

While replication-clients are incentivized and rewarded through protocol-based rewards schedule (see Replication-client Economics), validator-clients will be incentivized to include and validate PoReps in PoH through the distribution of the transaction fees associated with the submitted PoRep. As will be described in detail in the Section 3.1, replication-client rewards are protocol-based and designed to reward based on a global data redundancy factor. I.e. the protocol will incentivize replication-client participation through rewards based on a target ledger redundancy (e.g. 10x data redundancy). It was chosen not to include a distribution of these rewards to PoRep validators, and to rely only on the collection of PoRep attached transaction fees, due to the fact that the confluence of two participation incentive modes (state-validation inflation rate via global staked % and replication-validation rewards based on global redundancy factor) on the incentives of a single network participant (a validator-client) potentially opened up a significant incentive-driven attack surface area.

The validation of PoReps by validation-clients is computationally more expensive than state-validation (detail in the Economic Sustainability chapter), thus the transaction fees are expected to be proportionally higher. However, because replication-client rewards are distributed in proportion to and only after submitted PoReps are validated, they are uniquely motivated for the inclusion and validation of their proofs. This pressure is expected to generate an adequate market economy between replication-clients and validation-clients. Additionally, transaction fees submitted with PoReps have no minimum amount pre-allocated to the mining pool, as do state-validation transaction fees.

There are various attack vectors available for colluding validation and replication clients, as described in detail below in Economic Sustainability. To protect against various collusion attack vectors, for a given epoch, PoRep transaction fees are pooled, and redistributed across participating validation-clients in proportion to the number of validated PoReps in the epoch less the number of invalidated PoReps [DIAGRAM]. This design rewards validators proportional to the number of PoReps they process and validate, while providing negative pressure for validation-clients to submit lazy or malicious invalid votes on submitted PoReps (note that it is computationally prohibitive to determine whether a validator-client has marked a valid PoRep as invalid).