> For the complete documentation index, see [llms.txt](/llms.txt)

# 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:

| Recipient      | Share | Amount Per Slot |
| -------------- | ----- | --------------- |
| **Sequencers** | 70%   | 280 $AZTEC      |
| **Provers**    | 30%   | 120 $AZTEC      |

This value can be adjusted through governance.

### How Checkpoint Rewards Flow

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## 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:

```text
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.

***

Learn More

* [Staking Tokens](/participate/token/staking.md) - How to stake and earn rewards
* [Governance](/participate/governance.md) - How protocol parameters (including rewards) can change
* [Running a Prover](/operate/operators/setup/running_a_prover.md) - Technical setup for provers