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# Compensation

## Bond Rewards

Node Operators receive rewards for their work. They receive rewards if they are bonded and active on the network.

Rewards are allocated to nodes each time a block is processed. They're claimed whenever a node leaves the network. See Keeping Track of Rewards below for more details.

Nodes receive the same amount of rewards regardless of how much RUNE they've bonded. This stabilises the amount that nodes need to bond. Over time, this stability increases the median bonded amount and the security of the network.

Rewards are paid to Node Operators in RUNE.

Rewards are affected by the Emission Schedule and the Incentive Pendulum. Over time, the Emission Schedule decreases the amount of RUNE allocated to nodes. The Incentive Pendulum increases and decreases the amount of RUNE allocated to nodes according to the security and capital efficiency of the network.

### Keeping Track

When a node joins the network the current block height is recorded. Nodes claim their rewards when they leave the network

When they leave, the system calculates the number of blocks they were active for.

Every block the system sets aside rewards according to the Emission Schedule. It also creates one block unit for every active node.

When a node leaves, it cashes in its block units for a portion of the bond rewards. Then those spent block units are destroyed.

For example, there are 1000 RUNE in bond rewards outstanding. Node A has been active for 30 blocks, and has 30 block units. There are 1000 block units in total. Node A leaves the network and cashes in its 30 block units. It receives 30 RUNE, leaving 970 RUNE in node rewards. Its 30 block units are destroyed, leaving 970 block units.

## Income

Income for one node can be estimated based on a few inputs—

• Number of active nodes

• Reward emission rate

• % of rewards allocated to notes, set by the Incentive Pendulum

• Price of RUNE*

These inputs should be plugged into the following formula—

${{RewardAllocation * EmissionRate} \over {NumberOfNodes}} * RUNEPrice$

An example with mainnet day 1 inputs—

• 33 nodes

• 3.06 million RUNE rewards emitted per month

• 67% of rewards allocation to nodes (stable Incentive Pendulum)

• \$0.31 per RUNE

${{{0.67 * 3060000} \over {33}} * 0.31} = 19259$

In this example, an individual operator would receive 19,259 US dollars worth of RUNE.

*RUNE price can be estimated using the community-built RUNE Price Simulator.

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