Block Rewards

A ZCN block reward is minted with each new block and paid out to Miners, Sharders, and Blobbers to incentivize the growth of the Züs Cloud Network expansion.

Blobber Block Rewards

In the first year of mainnet, the Blobber network as a whole will receive a total of ~7,500,000 ZCN in block rewards designated for all active Blobbers on the Züs Cloud Network.

The proportion of block reward that each blobber receives is determined by their contributions to the network relative to the average blobber’s contribution on the network. These contributions are measured using the Blobber Weight Formula, which is explained more thoroughly below.

Miners and Sharders Block Rewards

In the first year of mainnet, the Active Set as a whole will be paid a total of ~8,500,000 ZCN in block rewards. The rewards will be spread out equally to its 141 Miners and Sharders.

*After the first year of mainnet, future network upgrades will modify the Active Set selection process, and thus the annual block reward breakdown per Miner and Sharder may also see modifications.

Blobber Reward Process

Blobbers are given rewards based on a lottery mechanism that favors the most productive and honest Blobbers on the network. Any Blobber who passes a challenge within the given time period is entered into the lottery.

1. Blobbers assigned to partitions

To enter a Blobber into the lottery, the network will randomly assign a Blobber to a “partition” - a fancy word for a group of Blobbers. There are numerous partitions and the members within each partition are constantly shuffled. Thus, the partition that a Blobber is in today may differ from the partition that they are entered into tomorrow.

2. Lottery mechanism to select a partition winner

For every block, a randomized selection is made to choose a winning partition. This selection process can be best understood metaphorically as the “lottery drawing” process.

3. Partition winner is randomly selected

To choose a winning partition, the network uses VRF (verifiable random function), which ensures randomness in the selection of each winner.

4. Block Reward Released to the Blobbers within the Winning Partition

Once the winning partition is selected, the rewards are distributed to the blobbers within it. The rewards that a blobber receives is in accordance to their overall contribution to the Züs Cloud Network relative to the other blobbers within the partition.

The overall contribution of a blobber is determined by their “weight”, which is calculated using the Blobber Weight Formula (explained below).

Blobber Weight Formula

The proportion of block reward that each Blobber receives is determined by their contributions to the network relative to the average Blobber’s contribution on the network.

These contributions are measured using the Blobber Weight Formula, which is comprised of the following: “Goodness Factor”, which is determined by the [free egress multiplier] and the [fair usage multiplier]; and “Adjusted Stake”, which is determined by [ZCN Delegated] and [Successful Challenges]

Variable	Description
Free Egress Multiplier	Blobbers are incentivized to provide Free Egress (also known as Free Reads) and facilitate adoption of Züs. Blobbers who provide Free Egress will receive the maximum multiplier.
Fair Usage Multiplier	Blobbers will be incentivized to provide honest storage performance. In order to prevent malicious Blobbers from exploiting the rewards mechanism, the Fair Usage function audits the bandwidth of a Blobber to detect and penalize any inorganic data usage patterns. The Fair Usage function is a ratio of a Blobber’s Egress Activity relative to their Active Data Storage. The closer a Blobber keeps this ratio to 2, the higher the multiplier.
ZCN Delegated	Blobbers will be incentivized to stake and collateralize value on their active storage commitments. Since ZCN is the staking asset required for any storage commitment, the weight formula rewards those Blobbers with more ZCN delegated (both self-delegated and externally delegated) to active storage commitments.
Successful Challenges	Blobbers are incentivized to store data. They are randomly issued Challenges to prove that they’re storing data. When a Blobber receives a Challenge, it must submit a proof of the file to successfully pass the Challenge. Blobbers who store more files have a higher probability of receiving more challenges.