What are block rewards on THORChain?

THORChain block rewards

THORChain (TC) has a maximum supply of 500m native RUNE, and 44% (or 220m) of this supply was set aside and allocated for Block Rewards. Block Rewards are that portion of the reserve designated to pay out to Node Operators (NO) and Liquidity Pool (LP) depositors for their participation in and securing of the network. NO’s receive two-thirds of the Block Rewards; LPs receive one-third.

The Block Rewards are set via an emission curve over a ten-year span, which can be tweaked (via consensus among the NO) and is designed to slowly reduce towards a constant value in the far future. At the time of writing, Block Rewards are targeted to provide around 30% APY to both NO and LP, and will target 2% after these ten years, after which the majority of revenue will be paid in fees. This is partly because Reserves are also being constantly topped up via system income (e.g. part of outbound fees charged, internal network fees, node bond slashing penalties, etc.).

The block reward system on THORChain is designed to incentivize both validators and liquidity providers to participate in the network and contribute to its growth and security. Validators are rewarded for validating transactions and maintaining the network, while liquidity providers earn a portion of the transaction fees generated by the network.