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Provider rewards

Providers receive compensation from a pool of all fees paid by dapps for containers on the network. The compensation a Provider receives is calculated based on several parameters, such as the number of SCUs contributed to the network, node uptime, and provider role (system provider or node provider). The reward calculation formula can be updated by a proposal as the network evolves and the optimal balance of parameters changes.

Provider reward estimator

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Weekly reward for system nodes (USD):$670.55

Weekly reward for dapp nodes (USD):$793.89

Total weekly reward (USD):$1,464.44

System cluster provider rewards​

Chromia provides a performance-based reward system for system cluster nodes. It considers factors like the total cost of running the system, risk sharing between providers and the system, and individual node uptime.

Here's the formula for system provider reward per node:

System Provider Reward per Node = max {
  (Total System Providers Cost * (1 - System Provider Risk Share)) +
  (System Provider Revenue Share per Node * System Provider Risk Share),
  System Provider Revenue Share per Node
} * Availability Factor

Explanation of the formula:​

  • Total System Providers Cost: This represents an estimate of the costs incurred by a system provider in hosting a single system node.
  • System Provider Risk Share: This value (between 0 and 1) adjusts the financial risk taken by system providers. The value is currently set at 0.1, meaning that system providers are guaranteed to make at least 90% of their costs back, adjusted down depending on their node's uptime.
  • System Provider Revenue Share per Node: This represent the share of total revenues from dapp hosting fees allocated as rewards to system providers for each node in the system cluster. It's calculated from the total revenue potential of all dapp clusters on the network, multiplied by the system provider fee share (currently 0.1), divided by the number of nodes in the system cluster.
  • Availability Factor: This value (between 0 and 1) reflects the individual node's uptime or availability during the reward period. Nodes with higher availability receive a higher reward. An uptime of 90% results in an availability factor of 0, and an uptime of 100% results in an availability factor of 1. In other words, an uptime higher than 90% results in rewards.
  • max { ... }: This function ensures that the final reward per node is the greater value between the two calculations within the curly braces.

Dapp cluster provider rewards​

Chromia provides a performance-based reward system for dapp cluster nodes. Similar to the system cluster rewards, it considers factors like the cluster's value and node availability to determine individual node rewards.

Here's the formula for dapp provider reward per node:

Dapp Provider Reward per Node =
( (Dapp Cluster Value * (1 - Dapp Provider Risk Share)) +
  (Dapp Cluster Value * Occupancy Rate * Dapp Provider Risk Share) )
/ Number of Nodes in Dapp Cluster
* Availability Factor

Explanation of the formula:​

  • Dapp Cluster Value: This represents the value of a dapp cluster, based on the total revenue it can generate from dapp hosting fees at full utilization after accounting for fee shares with system providers, staking rewards, and the system itself.
  • Dapp Provider Risk Share: This value (between 0 and 1) adjusts the financial risk taken by dapp providers. The value is currently set at 0.2, meaning that dapp providers are guaranteed to make at least 80% of the potential max revenue of a cluster, adjusted down depending on their node's uptime.
  • Occupancy Rate: This value (between 0 and 1) reflects the percentage of Standard Containers Units (SCUs) leased by dapps within the dapp cluster. A higher occupancy rate suggests the cluster is being more actively used.
  • Number of Nodes in Dapp Cluster: This represents the total number of nodes participating in the specific dapp cluster.
  • Availability Factor: This value (between 0 and 1) reflects the individual node's uptime or availability during the reward period. Nodes with higher availability receive a larger reward. An uptime of 90% results in an availability factor of 0, and an uptime of 100% results in an availability factor of 1. In other words, an uptime higher than 90% results in rewards.