Block Rewards

Reserve Pool

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.

Reward Distribution

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.