Calculating root node compensation
Root nodes are a critical component of the Q protocol and serve an important purpose in maintaining the integrity of the network. They are responsible for monitoring validator nodes, enforcing the Q Constitution, maintaining a whitelist of honest validator nodes, and punishing misbehaving validator nodes. Root nodes are elected by a majority vote of Q token holders based on criteria that ensure their independence. Root nodes are of course subject to the rules of the Q Constitution themselves, and their performance is monitored by Q token holders.
The network requires root nodes to be appropriately compensated. The amount of compensation root nodes receive is based on a number of factors, such as the total amount of Q available for distribution from the inflation subsidy and the number of active root nodes in the panel. Additionally, root nodes receive a share of slashed Q tokens and integrated application fees, which increase the overall amount of Q available for distribution. This system helps to ensure that root nodes are adequately compensated for their services, while also providing an incentive for them to remain honest and diligent when performing their duties.
As the root node panel expands, I am often asked about root node compensation. To answer this question, I have created the Q root node revenue calculator, a tool that helps estimate a root node’s revenue:
Q root node rewards calculator
This tool is easy to use. The first section, ‘Expected rewards’ provides the expected root node rewards per annum in Q for the current active root node panel. It’s also possible to predict how revenue would change with an increasing size of the root node panel. Simply update the number of active root nodes. The second section, ‘Calculation parameters’ shows the parameters and their sources used to calculate the revenue.
By the way — I previously created a similar tool for validators; you can read more about it here.
A few words of caution: The model presented here is simplified in that it only takes into account rewards resulting from inflation. Other sources of rewards, such as slashing and integrated application fees, are not considered. Additionally, the model reflects the current state of Q and parameters may change in the future.
This tool is provided by the community for the community. It is intended to give root nodes an initial idea of what to expect when they become a root node. However, no guarantees can be made that the model works correctly.
Therefore, before committing resources to Q, it is strongly recommended to do your own research. Section 6.2 of the Q White Paper provides a good introduction to Q’s economics, while Article 5 of the Q Constitution outlines the details that determine root node compensation. Additionally, the current network stats can be found on hq.q.org.
