Rewards Case Study

Almost all rewards delivered to operators are dependant on the total number of other operators providing the same service (relays, authorities, even staked tokens!) and their relative quality. Hence, any estimations into per-user token rewards must cast assumptions on this value.

The following section is an example breakdown of rewards in different scenarios. None of it is to be taken as a guarantee or as formal advice - your token rewards, especially in the early days, could vary significantly. Throughout this section, all relays are considered to earn equal rewards and thus create projections for mean rewards.

Fixed Emissions By Year

Here we outline the tokens emitted per category per year - this is fixed regardless of the number of relays

Reward Constants	All Relays	HW Bonus	Stakers
% Rewards Emitted	70%	20%	10%
% of pool emitted daily	0.100%	0.100%	0.100%
% of pool emitted yearly	31%	31%	31%

This naturally leads to the following base tokens emitted per category for each year

Year	Tokens in Pool	Emitted	Emitted All	Emitted HW	Emitted BW
1	10,000,000	3,059,301.13	2,141,510.79	611,860.23	305,930.11
2	7,140,698.87	2,184,554.81	1,529,188.37	218,455.48	436,910.96
3	5,456,144.06	1,669,198.77	1,168,439.14	166,919.88	333,839.75
4	4,786,945.29	1,464,470.71	1,025,129.50	146,447.07	292,894.14

Year-1 Emissions Per Scenario

The following tables show the mean base rewards (rewards without the inclusion of premium rewards or refilled token pools) for different numbers of total active relays in the network. In reality, for a given number of relays, a proportion are likely to be non-performant and thus leave more rewards for consistently active operators.

Regular Relays

Relays:	2,500.00	10,000.00	25,000.00	50,000.00
Year 1	856.60	214.15	85.66	42.83
Year 2	611.68	152.92	61.17	30.58
Year 3	467.38	116.84	46.74	23.37
Year 4	410.05	102.51	41.01	20.50

Hardware Relays

Hardware Relays	1000	5000	10000	10000
(Regular Relays)	2,500.00	10,000.00	25,000.00	50,000.00
Year 1	1,468.46	336.52	146.85	104.02
Year 2	830.13	196.61	83.01	52.43
Year 3	634.30	150.23	63.43	40.06
Year 4	556.50	131.80	55.65	35.15

Case Study With Assumptions

This case study is based on assumptions on the total number of active relays at the end of each year. However, for the purpose of net relay rewards for the year, the average number of active relays in the year is more accurate.

End-of-Year Active Relays or Staked Tokens

(End of) Year	Virtual Relays	Hardware Relays	Tokens Staked
0	3,000.00	500.00	-
1	10,000	2,500	1,000,000.00
2	30,000	5,000	2,000,000.00
3	50,000	10,000	3,000,000.00
4	0,000	10,000	4,000,000.00

Year Average Number of Relays

Year	Virtual Relays	Hardware Relays	Tokens Staked
1	6,500	1,500	500,000
2	20,000	3,750	1,500,000
3	40,000	7,500	2,500,000
4	50,000	10,000	3,500,000

Yearly Assumptions - Inflow to Reward Pools

Given these average active relays values, we can form an additional assumption - the total token inflow for premium rewards that enter the general reward pools.

Year	Token Inflow
1	0.00
2	200,000.00
3	500,000.00
4	1,000,000.00

Relay Rewards By Category

Thus, we can form the projected number of tokens rewarded, on average, to each relay type.

Year	Virtual Relays	Hardware Relays
1	267.69	675.60
2	64.39	122.64
3	24.60	46.85
4	17.09	31.73

Staking APYs

We can also consider the staking 'APY' (percentage yield) on tokens delegated to bandwidth alternative.

Year	APY
1	61%
2	29%
3	13%
4	8%

Total Tokens Locked

We can alternatively consider a minimum return that holders expect, before they stake tokens. Given that staked tokens only have a 14-day unstake period, the required premium could be as low as 5%. We can add this to the tokens locked for relays to get an estimate, on the above assumptions, for the total tokens that may end up being locked up.

Year	Relay Staked	BW Staked	Total Staked
1	1,000,000.00	6,118,602.26	7,118,602.26
2	3,000,000.00	8,738,219.25	11,738,219.25
3	5,000,000.00	6,676,795.07	11,676,795.07
4	5,000,000.00	5,857,882.85	10,857,882.85

Uptime Quality Tiers

The introduction of uptime quality tiers will see 20% of normal relay rewards (the pool of 7,000,000 tokens) allocated purely to relays that demonstrate consistent uptime as opposed to raw bandwidth. This biases the network slightly towards smaller operators who nevertheless maintain their relays, making rewards slightly more egalitarian and rewards more accessible for home setups.

Points	0-3 days	3-14 days	14+ days
All Relays	0	1	3

Assumptions Average Non-Hardware Relays Y1: 6500 Average Hardware Relays Y1: 1500

We can also assume the following distribution of relays and their average 'uptime status'

Proportion	0-3 days	3-14 days	14+ days
Hardware	30%	30%	35%
Other	20%	20%	50%

Based on this, we get an idea of the delta (addition or reduction in yearly rewards) for being consistently in different categories

Delta (year)	0-3 days	3-14 days	14+ days
Hardware	-53.53	-20.78043454	44.73423592
Software	-53.53776977	-20.78	44.73423592