# Validator Rewards

{% hint style="warning" %}
**Testnet Validator Reward Values**

The $500,000 annual budget and \~$100,000/year per validator figures shown below are **testnet parameters** used for network testing and validation. Mainnet validator economics will be announced separately.

Liquid staking is live on both mainnet ([Onyx App](https://app.onyx.org)) and testnet ([Slingshot Yield](/defi/slingshot/yield.md)).
{% endhint %}

## What Are Validator Rewards?

Validator rewards are **daily payments to node operators** who run consensus nodes on the Goliath Network. This is the primary income stream for validators.

## Key Facts (Testnet)

| Aspect            | Value              | Notes                              |
| ----------------- | ------------------ | ---------------------------------- |
| **Annual Budget** | $500,000 USD       | Total for all validators (testnet) |
| **Per Validator** | \~$100,000/year    | With 5 active validators (testnet) |
| **Daily Payment** | \~$273.97/day      | Per active validator (testnet)     |
| **Payment Time**  | UTC Midnight       | Automatic, every 24 hours          |
| **Requirement**   | >10% Participation | Must participate in consensus      |

{% hint style="warning" %}
**Reminder:** All values above are testnet configuration. Mainnet values TBD.
{% endhint %}

***

## How Validator Rewards Work

### Reward Flow

```
+-----------------------------------------------------------------------+
|                     VALIDATOR REWARD FLOW                              |
+-----------------------------------------------------------------------+

     Validator Reward Fund                   Active Validators
     =====================                   =================

+------------------------+          +----------------------------------+
|                        |          |  Validator 0: +$273.97/day       |
|  Fund Balance:         |          |  Validator 1: +$273.97/day       |
|  ~100M XCN             |  ======> |  Validator 2: +$273.97/day       |
|                        |          |  Validator 3: +$273.97/day       |
|  Daily Distribution:   |          |  Validator 4: +$273.97/day       |
|  $1,369.86 total       |          |                                  |
|  (testnet config)      |          |  Total: $1,369.86/day            |
|                        |          |         (testnet config)         |
+------------------------+          +----------------------------------+

Distribution happens automatically at 00:00:00 UTC every day
```

### Distribution Process

1. **Daily at UTC Midnight** - System calculates rewards
2. **Check Active Status** - Only validators with >10% consensus participation qualify
3. **Equal Distribution** - Budget divided equally among active validators
4. **Automatic Transfer** - XCN sent directly to validator accounts
5. **USD Conversion** - Amount calculated in USD, converted to XCN at current rate

***

## Reward Formula

```
Daily Reward (USD) = Annual Budget / 365 / Number of Active Validators

Current Testnet Example:
  Daily Reward = $500,000 / 365 / 5 validators
               = $273.97 per validator per day
               = $100,000 per validator per year (testnet)
```

### XCN Conversion

The USD amount is converted to XCN using the network exchange rate:

```
Daily Reward (XCN) = Daily Reward (USD) / XCN_USD_Price

Example at $0.00108/XCN:
  Daily Reward = $273.97 / $0.00108
               = 253,676 XCN per day
```

***

## USD-Denominated Stability

Validator rewards are **calculated in USD**, not XCN. This means:

| XCN Price Change | USD Reward         | XCN Amount           |
| ---------------- | ------------------ | -------------------- |
| Price doubles    | $273.97/day (same) | Half as many tokens  |
| Price halves     | $273.97/day (same) | Twice as many tokens |
| Price unchanged  | $273.97/day (same) | Same tokens          |

**Benefits:**

* **Stable income** regardless of market volatility
* **Predictable revenue** for business planning
* **Fair compensation** that maintains real-world value

***

## Requirements to Earn Validator Rewards

### 1. Run a Consensus Node

Your node must meet [minimum hardware specifications](/rewards/running-a-validator.md#system-requirements):

* 24 cores / 48 threads CPU
* 256 GB DDR4 ECC RAM (mandatory ECC)
* 5 TB NVMe storage
* 1 Gbps dedicated network
* Bare metal hosting (no VPS)

### 2. Stay Active

Your node must participate in **at least 10% of consensus rounds** during each staking period. This means:

* Node must be online and synced
* Node must create consensus events (judges)
* Brief downtime is tolerated, extended outages disqualify

### 3. Enable Rewards

By default, new nodes have rewards disabled (`decline_reward = true`). You must:

* Submit a configuration update to enable rewards
* This is typically done during onboarding

***

## Profitability Analysis (Testnet Example)

{% hint style="warning" %}
**TESTNET VALUES** - For illustration only. Mainnet economics will differ.
{% endhint %}

```
+============================================================================+
|                    VALIDATOR PROFITABILITY ANALYSIS                        |
|                        (Goliath Testnet Example)                           |
+============================================================================+
|                                                                            |
| REVENUE (Annual) - TESTNET:                                                |
|   Validator Rewards:      $100,000/year  (if node stays active)            |
|   Staking Rewards:        ~$216/year     (on 1M XCN at 20% APY)           |
|   --------------------------------------                                   |
|   TOTAL REVENUE:          ~$100,216/year                                   |
|                                                                            |
| COSTS (Annual):                                                            |
|   Bare Metal Server:      $3,600-7,200/year  ($300-600/month)              |
|   Bandwidth:              Included or ~$1,200/year                         |
|   Monitoring:             ~$600-2,400/year                                 |
|   Operations/On-call:     Varies                                           |
|   --------------------------------------                                   |
|   ESTIMATED COSTS:        $5,000-12,000/year                               |
|                                                                            |
| ========================================================================== |
| ESTIMATED NET PROFIT:     $88,000 - $95,000/year (TESTNET VALUES)          |
| ========================================================================== |
|                                                                            |
+============================================================================+
```

### Server Cost Reference

| Provider               | Configuration                       | Monthly Cost |
| ---------------------- | ----------------------------------- | ------------ |
| Hetzner AX162          | 32 cores, 256GB RAM, 2x 3.84TB NVMe | \~$300       |
| OVH HG-1               | 24 cores, 256GB RAM, 4x 1.92TB NVMe | \~$500       |
| Equinix Metal m3.large | 24 cores, 256GB RAM, 2x 3.8TB NVMe  | \~$2,500     |

***

## Validator Rewards vs Staking Rewards

Validators earn **BOTH** reward types:

| Reward Type           | Source                | Amount (Testnet)        |
| --------------------- | --------------------- | ----------------------- |
| **Validator Rewards** | Validator Reward Fund | \~$100,000/year         |
| **Staking Rewards**   | Staking Reward Fund   | \~20% APY on staked XCN |

By staking XCN to your own node, you earn staking rewards **in addition to** validator rewards.

```
Total Validator Income = Validator Rewards + Staking Rewards (on self-stake)
```

***

## Reward Distribution History

Recent distributions on Goliath Testnet:

| Date (UTC) | Config     | Per Validator | Total         | USD Equivalent |
| ---------- | ---------- | ------------- | ------------- | -------------- |
| 2026-02-05 | $500K/year | 252,742 XCN   | 1,263,711 XCN | $1,369.86      |
| 2026-02-04 | $25K/year  | 571 XCN       | 2,854 XCN     | $68.49         |

***

## Monitoring Your Rewards

### Validator Dashboard

Track your validator rewards on the [**Validator Dashboard**](/rewards/validator-dashboard.md):

1. **Account Page** - View your validator account balance and transactions
2. **Transactions Tab** - See daily reward distributions from the Validator Reward Fund
3. **Validators Page** - Monitor your node's status and participation

### API Access

Query validator information via the Mirror Node API:

```
GET /api/v1/network/nodes
```

Returns validator status, stake, and reward configuration.

***

## Frequently Asked Questions

**Q: How do I become a validator?**

A: Validator onboarding is currently limited during the testnet phase. See [Running a Validator](/rewards/running-a-validator.md) for requirements and updates on open registration.

**Q: What if my node goes offline?**

A: If your node's consensus participation drops below 10%, you won't receive rewards for that period. There's no slashing - you just miss the reward. Get back online to resume earning.

**Q: Are validator rewards guaranteed?**

A: Rewards are paid as long as:

* The Validator Reward Fund has balance
* Your node maintains >10% consensus participation
* You haven't disabled rewards (`decline_reward = false`)

**Q: Can I run multiple validators?**

A: Each validator requires a separate node setup. If you operate multiple nodes, each earns rewards independently.

**Q: When will mainnet values be announced?**

A: Mainnet economics will be finalized and announced before mainnet launch. Current testnet values are for testing purposes only.

***

## Related Documentation

* [**Rewards Overview**](/rewards/overview.md) - Compare staking vs validator rewards
* [**Slingshot Yield**](/defi/slingshot/yield.md) - Primary staking experience for XCN holders
* [**Running a Validator**](/rewards/running-a-validator.md) - Complete validator setup guide
* [**Validator Dashboard**](/rewards/validator-dashboard.md) - Monitor your node and rewards


---

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