Rewards and Penalties
Last updated
Last updated
Rewards and Penalties
Operators in a shared security environment are incentivised through rewards for making attestation and executing diverse specialised tasks. Rewards scale with the effective balance, which provides an economic incentive for Operators to behave honestly and act in the networks’ best interest.
To maximise reward, a single Operator opt-in to validate multiple networks, and puts its staked ETH at additional risk of penalties. Operators are penalised for missing, late, or incorrect attestations. Violating a consensus rule of chain A, carries consequences on effective balance, which results in a lower reward and voting power on AVS B and C, alongside A.
The amount of rewards earned by each Operator depends on the total number of active Operators (participation_rate) in the network, individual re-staked liquidity (effective_balance), and total liquidity re-staked in the network (active_balance).
Configurable Rewards and Penalties
The node software creates an additional Merkle tree that represents the Operator's attestations. The Merkle tree is periodically updated (configurable intervals) and subsequently publishes data by Operators to smart contracts on L1.
Rewards
Vesting schedule (e.g. 20% immediately vested, 80% six months vesting).
Conditional reward (e.g. if Operator stakes rewards for X periods).
Complex financial settlements (e.g. send to other addresses, split payment with delegators).
Penalties and slashing
Penalties result from offline behaviour, timeframe to validate, or execute a task
Failing to execute a transaction when expected
Failing to produce an attestation when expected
Slashing result from misbehaviour (forging, maliciously manipulating data)
Making two signatures in a single state update
Violating consensus (Casper FFG) rule
