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Participation in Celeste is incentivized through a combination of Staking Rewards and Dispute Fees. Staking Rewards are given to keepers proportional to the amount of activated HNY they have in the system, regardless of whether or not they get drafted to resolve a dispute or their performance in the dispute resolution process.
Staking Rewards are distributed from the Staking Rewards Module, which accumulates Honey from conviction proposals as well as potential future Celeste integrations and distributes rewards to keepers using the following mechanism.
Due to the way Celeste manages staking balances and the reward pool, staking rewards can not be distributed on a continuous basis. Instead, rewards must be distributed periodically. Each reward period is one month long. To avoid locking users into staking for an entire reward period as some protocols do, rewards are distributed probabilistically.
At the start of each reward period, a random block in the previous reward period is chosen to snapshot Keeper balances to determine eligibility for claiming rewards in the current period. A keeper may stake for a partial reward period and will end up with their proportional share of rewards based on their balance of activated HNY at the chosen snapshot block.
This approach ensures that rewards are distributed roughly proportionally to the amount and time staked during the period while allowing Keepers the flexibility to activate and deactivate their stake at any time.
Keepers must claim their rewards during the period they are eligible, otherwise, these rewards will be forfeited and included in the reward distribution for the subsequent period.