Economics

SAFE is central to Safenet’s economic and governance model. SAFE supports staking, delegation, participant incentives, and SafeDAO governance. Safenet Aegis also introduces transaction fees paid in USDC, creating usage-based revenue for Sentinels alongside SAFE-denominated incentives.

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SAFE utility

SAFE connects network participation, incentives, and governance. SAFE holders can:

• Stake or delegate SAFE to support Validators.
• Receive SAFE-denominated rewards through eligible Validator or Delegator participation.
• Participate in SafeDAO governance over Safenet’s economic and protocol parameters.

Validators participate through staked SAFE, while SAFE holders who do not operate Validator infrastructure can delegate to Validators. See Staking for staking and delegation.

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SAFE rewards and subsidies

SafeDAO-approved SAFE funding supports Safenet participants during the network’s growth phase. Validators and Delegators can receive SAFE-denominated rewards when the applicable participation requirements are met. Validators that do not meet the required participation threshold do not receive rewards for that period. Sentinels can also receive SAFE-denominated rewards subject to their own participation requirements. These SAFE incentives are separate from the USDC transaction fees earned by Sentinels. See Rewards for Validator and Delegator rewards.

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USDC transaction fees

Safenet Aegis introduces USDC-denominated transaction fees that create usage-based revenue for Sentinels performing security checks. These fees are separate from SAFE-denominated rewards and subsidies. SafeDAO governs the fee amount and can allocate a share of Safenet fee revenue to DAO-controlled protocol funds. See Fees for current fee parameters, distribution, and the SafeDAO fee share.

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SafeDAO governance

SafeDAO governs key economic parameters across Safenet. This includes parameters related to:

• Transaction fees and their distribution.
• The SafeDAO share of protocol fee revenue.
• Sentinel bonds and slashing.
• The Sentinel and Validator sets, and other governed protocol parameters.

Changes follow the applicable SafeDAO governance process. See Governance for how Safenet parameters are governed.

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Sentinel bonds and accountability

Sentinels post economic bonds when participating in Safenet checks. Bonds create accountability around Sentinel decisions. Depending on the outcome and applicable protocol rules, a Sentinel can recover its bond or have part of it slashed. This mechanism is separate from SAFE staking, SAFE-denominated incentives, and USDC transaction-fee revenue. See Sentinels for the Sentinel participation model.