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Validators stake POL tokens as collateral to secure the network and earn rewards in return. Rewards consist of staking rewards and transaction fees: ValidatorRewards=StakingRewards+TransactionFeesValidator Rewards = Staking Rewards + Transaction Fees Polygon allocates 12% of its total supply of 10 billion tokens to fund staking rewards. The yearly incentive is fixed, distributed to all signers periodically, irrespective of overall stake or target bonding rate.

Reward schedule

YearTarget Stake (30% of circulating supply)Reward Rate for 30% BondingReward Pool
First1,977,909,43120%312,917,369
Second2,556,580,02312%275,625,675
Third2,890,642,8559%246,933,140
Fourth2,951,934,0487%204,303,976
Fifth2,996,518,7495%148,615,670 + 11,604,170

Annual reward rates by staked supply

Expected annual rewards for the first 5 years, for staked supply ranging from 5% to 40%:
% of circulating supply staked5%10%15%20%25%30%35%40%
Annual reward for year
First120%60%40%30%24%20%17.14%15%
Second72%36%24%18%14.4%12%10.29%9%
Third54%27%18%13.5%10.8%9%7.71%6.75%
Fourth42%21%14%10.5%8.4%7%6%5.25%
Fifth30%15%10%7.5%6%5%4.29%3.75%

Who receives rewards

  • Validators: earn staking rewards and transaction fees. Validators may charge a commission on rewards earned by their delegators.
  • Delegators: earn staking rewards proportional to their delegated stake, minus validator commission.
  • All staked funds are locked in a contract on the Ethereum mainnet. No validator holds custody over delegator tokens.

Checkpoint proposer bonus

Validators earn a bonus for committing periodic checkpoints to the Ethereum mainnet. To receive the full bonus, the proposer must include all signatures in the checkpoint. The protocol requires 2/3+12/3+1 weight of total stake; a checkpoint accepted with 80% votes yields the proposer 80% of the calculated bonus. Rewards minus the bonus are shared among all stakers (proposer and signers) proportionally.

Transaction fees

Each block producer at Bor receives a percentage of transaction fees collected per block. Producer selection per span depends on the validator’s ratio in overall stake. Remaining transaction fees are distributed to all validators working at the Heimdall layer.