Rewards

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Validator Rewards

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Rewarded Duties

In Cardano, validators are referred to as stake pools. Stake pools are server nodes that combine the stake of various stakeholders into a single entity (i.e. a single stake pool). These stake pools have the responsibility of validating and producing blocks, and processing transactions. As such, the rewards that these stake pools receive are based on these duties.

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Calculation and Timing

The rewards are calculated and distributed on a per epoch basis, with each epoch being 5 days. Once the rewards are calculated, they are held by the Cardano treasury at the end of the epoch when they are earned. After the treasury takes a 20% cut, the rewards are then locked up for 2 epochs before they are distributed to stake pools.

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Commission and Distribution

With the rewards being distributed to the stake pools, the leader (i.e. stake pool owner/validator operator) first takes a “fixed fee” (poolFlatFee) from the rewards which is usually a static amount, then takes their “margin fee” which is a percentage commission (poolFee). The remaining rewards are then split proportionally between the leader and the members (i.e. delegators) depending on how much they have staked in the stake pool.

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Network Rewards

This network rewards endpoint gives you a breakdown of all rewards earned and realized/received by stake pools over a specified period of time.