🔲Aleo SRB
ALEO Staking Rewards Benchmark (ALEOSRB™) Methodology
AleoSRB is a benchmark representing the mean, annualized staking rate across all active Aleo validators.
AleoSRB is calculated and published by Staking Rewards via the Aleo Profile and Staking Data API.
| Formula key | Metric name | Description |
|---|---|---|
br | Block Reward | The reward for successfully mining a block. Reward paid in Aleo Credits |
mw | Miner's Contributed Work | Miner's share of the total work done by the network. Number of valid ZK-SNARK proofs they generate |
nw | Total Network Work | The total computational work done by all miners on the network to solve the cryptographic puzzle for that block |
Rewards come from miners contributing computational power to the PoSW system, earning Aleo Credits.
Privacy-Preserving Rewards: All validator rewards are calculated and distributed without revealing the identity of participants, leveraging Aleo's zero-knowledge proof technology.
Validator Effectiveness: AleoSRB uses an average validator effectiveness that takes into account the private and decentralized nature of Aleo’s validation process. This ensures that rewards distribution is efficient while maintaining the privacy guarantees of the network.
Non-compounded Basis: Similar to the ETHSRB, AleoSRB does not reinvest rewards automatically, ensuring that the staking returns are distributed without additional compound interest.
ALEO rewards distribution
Aleo's reward distribution for its Proof-of-Succinct-Work (PoSW) mechanism involves two main components: provers and validators. Provers, sometimes referred to as "zk miners," generate zero-knowledge SNARK proofs to solve cryptographic puzzles (Coinbase puzzles). These puzzles are essential for block generation and securing the network.
Here's how the process works:
Provers' Role: Provers use specialized hardware (such as GPUs) to generate SNARK proofs, competing to solve these Coinbase puzzles. The more efficient and effective they are in generating valid SNARK proofs, the higher their chances of earning a portion of the block reward. If multiple provers submit valid solutions, the rewards are split proportionally based on the number of solutions each prover submits.
Validators' Role: Validators verify the SNARK proofs generated by provers and include them in the blocks they create. Validators also secure the network through Aleo's consensus algorithm (AleoBFT), which is based on Proof-of-Stake principles. A key point is that validators also receive a share of the block rewards for their work verifying transactions and proofs.
Reward Calculation: The rewards (Aleo Tokens) are distributed in proportion to the number of valid solutions provided by provers and the staking weight of validators. Provers are incentivized to submit more proofs, and the efficiency of their hardware plays a crucial role in determining the number of rewards they receive.
Aleo Real Reward Rate (AleoSRB^R)
The real reward rate calculates the AleoSRB adjusted for inflation in the network.
| Formula key | Metric name | Description |
|---|---|---|
i | Inflation Rate | Inflation refers to the increase in the total supply of ALEO due to block rewards distributed to validators for block production and attestations, adjusted by the burning of transaction fees as per EIP-1559, which can impact the net inflation rate. |
Inflation Rate Behaviour
Aleo’s inflation rate is initially set at 12% for the first year, with the issuance of new Aleo tokens through block rewards distributed to provers and validators in its Proof of Succinct Work (PoSW) system. After the first year, the inflation rate will gradually decrease over time, aiming to reach 2% by the 10th year, and it will continue to decline until it eventually approaches zero.
Other Flow metrics calculated by Staking Rewards:
| Metric | Description |
|---|---|
Delegated Tokens | The number of ALEO tokens delegated to workers. |
Self Staked Tokens | The number of ALEO tokens bonded by workers directly. |
Staking Wallets | The total number of unique delegations on-chain. It doesn't distinguish based on unique delegator addresses. |
Aleo’s Validator Framework: A Slashing-Free Environment
In Aleo, validators are not penalized with slashing for mistakes or misbehavior, which means stakers do not risk losing their funds due to validator errors. This design aims to make staking safer for participants. However, while there are no slashing penalties, validators can still experience issues such as downtime, which may affect their ability to earn rewards. Overall, the absence of slashing encourages participation without the fear of significant financial loss due to validator misconduct.
You can find more info here.
Data Sources:
Staking Rewards from indexed Aleo Blockchain RPC Endpoints
References:
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