Unlike most other blockchains, a block producer of KCC does not directly take any transaction fees from a block, but all the transaction fees will go to the reserve pool first. However, for each block, a fixed amount of KCS will be taken out of the reserve pool as a block reward and distributed to all the validators and stakers. The specific amount taken from the reserve pool is a global parameter governed by the foundations.
Apart from the transaction fees, anyone could donate their KCS to the reserve pool. Currently, the foundations take advantage of this feature to maintain a reasonable APY for validators and stakers to encourage early participation.
For each validator, there is a pool of KCS. The KCS in the pool has two sources: either deposited by the validator himself as a margin or staked by the users( i.e., users' votes).
In each block, the reward taken out of the reserve pool is distributed as follows:
- 1.The amount of reward distributed to each pool is proportional to the total amount of votes in that pool, with 1 KCS for each vote. And both the validator's margin and users' stakes are counted as votes.
- 2.The reward distributed to each pool is then distributed to the validator and his stakers as follows:
- 1.The validator takes part of the reward as a commission.
- 2.Then, the remaining part of the reward will be distributed to the validator and stakers. The amount distributed to each party, either the validator or a user, is proportional to their votes.