Validator revenue stream refers to the various sources of income for participants who validate transactions and propose new blocks on a proof-of-stake blockchain. This typically includes block rewards, which are newly minted tokens, and transaction fees paid by users. These revenue streams incentivize validators to secure the network. They are essential for the economic stability of the protocol.
Context
Validator revenue streams are a critical component of a blockchain’s economic security and decentralization, influencing the participation and distribution of validating power. Changes in network activity, fee structures, and protocol upgrades directly impact these revenue sources. Debates often address how to maintain attractive validator incentives while ensuring fair and low-cost transaction processing for users.
A new auction mechanism for transaction bundling transforms MEV from an externality into a direct revenue stream, enhancing chain efficiency and validator incentive compatibility.
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