How do XRD emissions work?

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How do XRD emissions work?

XRD emissions are new XRD tokens created to incentivize good network security and performance. Emissions of new XRD tokens happens at the end of fixed periods of network time called epochs. The exact length of an epoch varies based on how fast the network is running, but they are generally between 30 - 90 minutes long.

Note: The first epoch of the Radix Public Network is a special two-week bootstrapping epoch. This means that there will be no rush for stakers or node-runners to take action immediately at launch. More information is provided in this linked blog.

At the end of each epoch, the Radix Protocol adds a fixed amount of XRD tokens to the circulating supply as emissions. The amount of XRD emitted is set so that a total of roughly 300m XRD tokens are emitted over the course of one year. 

The actual amount of emissions distributed to stakers and validator node-runners is reduced by a penalty factor applied if a given validator has failed to participate in consensus some of the time during the epoch. The penalty amounts are deducted from the emissions and are effectively burned. This is important to ensure that stakers choose good, performant nodes – and that node-runners are incentivized to run them.

At the start of each epoch, the total amount of XRD staked to each validator node is checked, and a new validator set of 100 is automatically selected for the full duration of that epoch. This means that the total amount of XRD emitted at an epoch’s end is automatically distributed to stakers and node-runners based on the validator list and stakes set at the epoch’s start.

Further reading: