Validator rewards and incentives
Validators on Buburuza, particularly under the BoLD protocol, are incentivized in the following ways:
Active proposers (validators who propose assertions with a bond) are eligible for a service fee, denominated in ETH, meant to compensate for the opportunity cost of locking up capital. This fee is intended to correlate with the annualized income Ethereum mainnet validators receive, typically around 3% to 4% of their bond
The service fee is paid out when an active proposer's top-level assertion is confirmed on Ethereum and is based on the duration they were considered active by the protocol.
There can only be one “active” proposer at any point in time. Once a new assertion is posted, the previous proposer's bond is refunded upon confirmation.
In the event of a dispute, honest defenders can earn a “defender’s bounty,” which is 1% of confiscated funds from malicious actors, proportional to the amount they put up to defend a correct state assertion. Honest defenders also get their gas costs 100% refunded by the Buburuza Foundation for Buburuza Chain challenges.
All bonds put up by honest parties are returned, while those from malicious parties are confiscated.
For Buburuza Chain, entities wishing to receive these rewards must undergo the Buburuza Foundation’s KYC process.
Validator Minting Mechanism
Annual Issuance Formula:
Annual Issuance = Total Staked Supply × (Base Rate + Performance Multiplier)Parameters:
Base Rate: 0.5% (minimum inflation during low activity)
Maximum Rate: 2.0% (cap during high network usage)
Performance Multiplier: 0-1.5× based on validator effectiveness
Target Staking Ratio: 25-35% of total supply
Validator Rewards Distribution:
Proposer Rewards: Extra rewards for block proposals (2-5% bonus)
Attestation Rewards: Base rewards for validation participation
Slashing Penalties: 1-5% stake burned for malicious behavior
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