Rewards

Safenet Validators and Delegators can receive SAFE-denominated rewards through the Validator staking system. Rewards are calculated in recurring two-week reward periods. SafeDAO allocates 5,000,000 SAFE over 12 months to Validator and Delegator rewards. This page defines the Validator and Delegator reward calculation and distribution rules for Safenet Aegis.

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Who can earn rewards

Validators can earn rewards on their self-staked SAFE. SAFE holders who delegate SAFE to a Validator can earn Delegator rewards. A Validator must reach at least 75% participation during a reward period for the Validator and its Delegators to receive rewards for that period. Below 75% participation:

• The Validator receives no reward for the period.
• Its Delegators receive no reward for the period.

At or above 75%, rewards scale with the Validator’s participation. Validators receive a fixed 5% commission on rewards attributable to delegated SAFE. The remaining 95% is distributed among their Delegators. Validators must also maintain a minimum time-weighted self-stake of 3,500,000 SAFE over the reward period. Below this threshold, a Validator earns no commission on delegated stake for that period, though rewards on its own self-stake are unaffected. Delegators remain eligible for rewards provided the Validator still meets the participation requirement. Validator and delegated SAFE are not currently subject to slashing. Validator participation and behavior can affect rewards, but do not reduce staked SAFE.

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Reward calculation

Rewards depend on:

• Time-weighted stake: The amount of SAFE staked and how long it remains staked during the reward period.
• Stake concentration: Additional stake contributes less reward weight when a Validator is backed by substantially more stake than the network average.
• Validator participation: Validators must reach 75% participation, and higher participation above the threshold increases reward weight.
• Minimum self-stake: Validators must maintain at least 3,500,000 SAFE self-staked to earn commission on delegated stake.
• Validator commission: Validators receive 5% of rewards attributable to delegated stake.
• Reward eligibility: Validators must only participate in eligible attestations.

Approximate reward rate A rough annualized network-wide reward rate is: $$\text{Approximate reward rate} = \frac{5{,}000{,}000\ \text{SAFE}} {\text{Total SAFE staked across the network}}$$ For example, if 50,000,000 SAFE is staked across the network, the unadjusted network-wide rate would be approximately 10% per year. This is only an approximation. Individual rewards depend on the factors described below. Reward flow At a high level, the reward pool is allocated to Validators according to their effective reward weight. Each Validator’s allocation is then split between rewards attributable to self-stake and delegated stake. How rewards flow from the pool to a single Validator and its Delegators in a reward period. Time-weighted stake Rewards use the average amount of SAFE staked during the reward period rather than a single snapshot. SAFE therefore contributes to rewards only for the time it was actually staked or delegated. For example, SAFE delegated halfway through a reward period contributes for approximately half of that period rather than receiving the same reward as SAFE delegated for the full period. Stake-concentration weighting Reward weighting discourages excessive stake concentration with a single Validator. Reward weight grows linearly up to the average stake backing a Validator. Above that point, additional stake increases reward weight more slowly. This means additional SAFE delegated to an already heavily staked Validator can contribute less reward weight than the same amount delegated to a smaller Validator. Participation weighting A Validator’s stake weight is adjusted by its participation rate. Below 75% participation, its effective reward weight is zero. At or above 75%, the Validator’s effective reward weight increases with participation. Minimum self-stake requirement A Validator’s commission eligibility is separately gated by its own self-stake. Below 3,500,000 SAFE in time-weighted self-stake, a Validator earns no commission on delegated stake for that period. Rewards on the Validator’s own self-stake, and rewards for its Delegators, are unaffected. Allocating rewards Each Validator receives a share of the reward pool proportional to its effective reward weight. That allocation is attributed between:

• Rewards generated by the Validator’s self-stake.
• Rewards generated by SAFE delegated to the Validator.

The Validator receives all rewards attributable to its self-stake. If the Validator meets the minimum self-stake requirement, it also receives a fixed 5% commission on rewards attributable to delegated stake, with the remaining 95% distributed among Delegators in proportion to their time-weighted stake. If the Validator does not meet the minimum self-stake requirement, the full delegated-stake reward is distributed among Delegators instead.

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Eligibility and exclusions

Meeting the participation threshold is not sufficient on its own. Validators must also participate only in FROST signing ceremonies for results that are eligible under the Safenet result model. A Validator is subject to a reward exclusion if it participates in a FROST signing ceremony for a result that is not an eligible unanimous secure Sentinel result. This includes signing ceremonies for:

• An insecure Sentinel result.
• A split Sentinel result.
• An incomplete or otherwise unreliable result.
• A result that entered arbitration.
• A mismatched Safe, network, or transaction context.
• Any other result that is not an eligible unanimous secure Sentinel result.

If a Validator participates in such a signing ceremony, the following rewards are excluded for the entire two-week reward period:

• The Validator’s self-stake rewards.
• The Validator’s commission.
• Delegator rewards attributable to that Validator.

An insecure or otherwise ineligible result does not trigger an exclusion by itself. The exclusion applies as soon as the Validator participates in a signing ceremony for such a result, whether or not that ceremony produces a final attestation. Rewards excluded because a Validator participated in a signing ceremony for an ineligible result are redistributed among the remaining qualifying reward recipients.

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Distribution and claiming

Rewards are calculated every two weeks using the applicable staking and Safenet participation state for the reward period. Calculating, publishing, proposing, verifying, and executing a distribution are all permissionless. Each step is public, so anyone can check a distribution before it executes. A distribution moves from a reproducible calculation, through public verification on Reality.eth, to execution and cumulative claims. Routine distributions do not require a separate Snapshot vote. 1. Calculate Anyone can calculate the allocations for a reward period using the open-source tooling in the safenet-staking-scripts repository. The calculation applies the methodology on this page to the applicable staking, participation, and eligibility data. The result is deterministic, so anyone with the same inputs can reproduce it and compare it with a published distribution. Validator self-stake rewards and commission are allocated to the Validator’s Staker address registered at the end of the reward period. 2. Publish The resulting reward package is published on IPFS. It contains:

• The reward dataset.
• Recipient allocations, expressed as cumulative SAFE entitlements.
• Merkle proofs for each recipient.
• The Merkle root.
• The transaction bundle that publishes the distribution.

These parts correspond to each other. Each Merkle leaf commits to a recipient address and its cumulative entitlement, and the Merkle root is computed from all leaves in the dataset. The IPFS CID identifies the exact package. The transaction bundle sets that Merkle root on the reward-distribution contract, funds the contract, and sets the contenthash of rewards.safenet-gov.eth to that CID. 3. Propose Anyone can propose the distribution through the Zodiac Reality Module on the Safenet Governance Safe (Mainnet). The proposal uses the rewards authorization case of the Reality.eth question. It binds the IPFS CID to the hash of the exact transaction bundle and asks whether the package correctly applies the methodology approved in SEP 56, as amended by later approved SEPs. It also asks whether the bundle performs only the permitted distribution actions. Routine distributions use this case, so each distribution does not need its own Snapshot vote. A change to the methodology itself still requires SafeDAO approval. 4. Answer and challenge Anyone can answer or challenge the question on Reality.eth by posting a bond. Each challenge must at least double the previous bond and restarts the answer timeout. The answer that stands when the timeout elapses becomes final. Rewards questions have no arbitrator, so bond escalation is the only way to dispute an answer. Bonds make defending a wrong answer increasingly costly, but they do not guarantee a correct outcome. The result depends on participants who reproduce the calculation and challenge a wrong answer in time. See How proposals execute for the shared answer, bond, and outcome rules. 5. Execute Anyone can execute the distribution once the Reality.eth answer is a final Yes, the cooldown has elapsed, the answer has not expired, and the proposal has not been vetoed. Execution runs through the Safenet Governance Safe (Mainnet) and:

• Updates the Merkle root on the reward-distribution contract.
• Funds the reward-distribution contract.
• Updates the contenthash of rewards.safenet-gov.eth to the IPFS package.

If the answer is No or Invalid, or the answer expires before execution, the distribution does not execute. A corrected distribution can be proposed again. 6. Claim Recipients find their allocation and Merkle proof in the canonical reward dataset or through an interface that reads it. A staking interface can show rewards associated with a staking position and provide the claiming flow. The reward-distribution contract verifies each claim against its onchain Merkle root. Claims are cumulative: a claim pays the recipient’s cumulative entitlement minus anything already claimed. There is no minimum payout amount. Every positive reward allocation can be distributed. Canonical references and controls

• Merkle root: the onchain Merkle root on the reward-distribution contract determines which claims are accepted.
• Dataset: rewards.safenet-gov.eth references the IPFS CID of the canonical reward dataset. Copies in repositories or elsewhere are mirrors. See ENS records.
• Verification: anyone can reproduce the calculation, verify the dataset against the Merkle root, and pin or mirror the data.

See Contracts and audits for the reward-distribution contract, the Safenet Governance Safe (Mainnet), and its Reality Module. Operator commands, calldata, and validation procedures are documented in the safenet-staking-scripts repository. Configuration On Mainnet, rewards questions use a minimum answer bond of 10,000 SAFE and no arbitrator. An unchallenged answer becomes final after 3 days, and challenges can extend this. Execution waits for a 5-day cooldown after finalization. The answer expires 7 days after finalization, which leaves a 2-day execution window. See Current configuration. Screening and disclosures Reward distributions are subject to standard sanctions and AML checks. Recipient addresses are screened against sanctions lists maintained by the UN, EU, UK, US (OFAC), and Switzerland (SECO). See the sanctions-address-lists repository for the address lists used. Rewards are not guaranteed. The amount received can change between reward periods as stake, Validator participation, stake distribution, and reward eligibility change. Rewards are variable. Safenet does not custody funds in users’ Safes or control their transaction execution. Nothing on this page is financial advice. Sentinel grants are funded and evaluated separately from Validator and Delegator rewards. See SAFE rewards and subsidies. Their distribution mechanics are not described on this page. See How to stake for delegation and Lock-up and withdrawals for withdrawal rules.

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Mathematical specification

The following defines the reward calculation formally. Participants and stake

• V: Set of Validators.
• N = |V|: Number of Validators.
• s̄_i: Time-weighted self-stake of Validator i.
• d̄_{j,i}: Time-weighted SAFE delegated by Delegator j to Validator i.
• d̄_i = Σ_j d̄_{j,i}: Total time-weighted delegated stake to Validator i.
• S̄_i = s̄_i + d̄_i: Total time-weighted stake backing Validator i.
• S̄_total = Σ_i S̄_i: Total time-weighted SAFE staked across the Validator set.

Participation

• p_i: Participation rate of Validator i.
• p_min = 0.75: Minimum participation required to receive rewards.

Reward parameters

• R: SAFE reward pool for the reward period.
• T: Average stake backing a Validator.
• c = 0.05: Validator commission on delegated rewards.
• s_min = 3{,}500{,}000 SAFE: Minimum time-weighted self-stake required for a Validator to earn commission.

Time-weighted stake For any stake balance x(t) during a reward period [t_0, t_1]: $$\bar{x} = \frac{1}{\Delta t}\int_{t_0}^{t_1}x(t)\,dt$$ where: $$\Delta t = t_1 - t_0$$ Average stake threshold The threshold for linear reward growth is: $$T = \frac{\bar{S}_{total}}{N}$$ Stake weight Reward weight grows linearly up to the average stake threshold and sub-linearly above it: $$w(\bar{S}_i) = \begin{cases} \bar{S}_i, & \text{if } \bar{S}_i \le T \\ \sqrt{\bar{S}_i \cdot T}, & \text{if } \bar{S}_i > T \end{cases}$$ Effective reward weight Participation is applied to the stake weight: $$\tilde{w}_i = \begin{cases} p_i \cdot w(\bar{S}_i), & \text{if } p_i \ge p_{min} \\ 0, & \text{if } p_i < p_{min} \end{cases}$$ The total effective reward weight is: $$W = \sum_{k \in V}\tilde{w}_k$$ Validator allocation Validator i receives: $$R_i = R \cdot \frac{\tilde{w}_i}{W}$$ The allocation attributable to self-stake is: $$R_i^{self} = R_i \cdot \frac{\bar{s}_i}{\bar{S}_i}$$ The allocation attributable to delegated stake is: $$R_i^{del} = R_i \cdot \frac{\bar{d}_i}{\bar{S}_i}$$ Validator and Delegator rewards If the Validator meets the minimum self-stake requirement (s̄_i ≥ s_min), it receives its self-stake reward plus commission on delegated rewards: $$R_i^{validator} = R_i^{self} + c \cdot R_i^{del}$$ Otherwise, it receives only its self-stake reward: $$R_i^{validator} = R_i^{self}$$ Delegators collectively receive the remainder of the delegated-stake reward: $$R_i^{delegators} = \begin{cases} (1-c) \cdot R_i^{del}, & \text{if } \bar{s}_i \ge s_{min} \\ R_i^{del}, & \text{if } \bar{s}_i < s_{min} \end{cases}$$ For Delegator j: $$R_{j,i} = R_i^{delegators} \cdot \frac{\bar{d}_{j,i}}{\bar{d}_i}$$ The resulting allocations remain subject to the participation and attestation-eligibility rules described above.