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Economics & Rewards

The Aztec network uses economic incentives to encourage honest participation and consistent operation. This page explains how rewards are distributed and what factors influence earnings.

Reward Sources​

Network participants earn rewards from two sources:

  1. Checkpoint Rewards: Protocol-funded rewards accruing for each proven slot
  2. Transaction Fees: Fees paid by users for transaction processing

Checkpoint Rewards​

Tokens are minted in advance to the RewardDistributor contract. The Rollup contract then claims from the RewardDistributor each slot and distributes them as checkpoint rewards — these are not net new inflation, but they are net new circulating tokens. The current checkpoint reward is 400 $AZTEC per slot, split between sequencers and provers:

RecipientShareAmount Per Slot
Sequencers70%280 $AZTEC
Provers30%120 $AZTEC

This value can be adjusted through governance.

How Checkpoint Rewards Flow​

Sequencer Rewards​

Sequencers earn rewards for successfully proposing and finalizing blocks:

  • Checkpoint share: 70% of each checkpoint reward (280 $AZTEC) goes to the block proposer, paid when the block is finalized on L1
  • Transaction fees: Sequencers collect fees from users; a portion (the congestion cost) is burned, and 70% of the remainder is awarded to the sequencer

Prover Rewards​

Provers earn rewards for generating validity proofs that finalize blocks:

  • Checkpoint share: 30% of each checkpoint reward (120 $AZTEC), distributed among provers who participated in the epoch
  • Transaction fees: Provers receive 30% of the unburnt transaction fees

Activity Score and Reward Distribution​

Prover checkpoint rewards are not split equally. They are distributed based on each prover's activity score, which measures consistency of participation. The score:

  • Increases by 125,000 per epoch of active proving
  • Decreases by 100,000 per epoch of inactivity
  • Maximum: 15,000,000 points

A prover's share of the reward pool is determined by a quadratic penalty formula:

shares = k - (a × (maxScore - score)²) / 1e10

Where k = 1,000,000, a = 1,000, and the minimum share is 100,000.

At maximum activity score, a prover receives the full k shares. As the score drops, the quadratic term reduces shares increasingly aggressively, meaning small drops have minimal impact but extended inactivity significantly reduces earnings.

This design rewards long-term, consistent provers and discourages sporadic participation.

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