Midnight Proposes NIGHT Block Rewards for Cardano SPOs and Delegators
Two draft Midnight Improvement Proposals outline how Cardano stake pool operators and ADA delegators would receive NIGHT rewards for producing blocks on Midnight. The proposed system would distribute rewards directly on Midnight rather than through Cardano-based payout contracts.
By SongMarketCap
Midnight improvement proposal repository don introduce two draft specifications wey cover how to calculate, distribute, and fund NIGHT block production rewards. The proposals wey dem link to change request #406 go first make Cardano stake pool operators (SPOs) and their ADA delegators fit collect rewards.
Di new design aim to replace di payout mechanism wey MIP-0024 describe, wey dey route rewards through Cardano. Both new specifications still be drafts, and di proposed changes never activate.
How Cardano SPOs Go Earn NIGHT for Midnight
Midnight na privacy-focused partner blockchain of Cardano. Im initial block production model dey rely on authorized producers, and Cardano SPO participation go help as di network dey move toward decentralized block production.
Di first draft, Native NIGHT Block Production Rewards: Accrual and Claims, specify how di protocol go record block producers, calculate rewards using di published tokenomics formula, and assign NIGHT to eligible operators.
For di end of each Midnight epoch, di pool accumulated rewards go divide between di operator and ADA delegators. Di calculation go use di operator existing margin from im Cardano stake pool registration, plus optional fixed fee wey dem denominate in NIGHT.
Delegator allocations go base on di finalized ADA stake snapshot wey dem use determine di producer committee for that epoch. According to di proposal, people fit independently recalculate di distribution from publicly available finalized data.
Authorized producers wey dey operate during Midnight initial phase no go qualify for these rewards. Blocks wey those participants produce no go draw NIGHT from di designated reserve.
Di draft still prevent any retroactive change to reward eligibility. To expand di eligible producer group go need separate MIP and network upgrade wey dem go announce at least one full epoch before e start.
How ADA Delegators Go Claim NIGHT Rewards
Di proposed payout mechanism different from di earlier MIP-0024 design, wey dey use virtual accounts, smart contracts, and batch processing to distribute NIGHT on Cardano.
Under di new approach, rewards go dey paid as unshielded NIGHT directly on Midnight, using capabilities wey don already dey inside di network ledger.
ADA delegators no need to register separately as block producers to accrue rewards. Dem go calculate their allocations automatically based on di stake wey dem get inside participating Cardano pools.
But to claim those rewards, dem go need one-time registration process.
Until registration complete, Midnight go hold di accumulated rewards for escrow wey dem associate with each delegator Cardano stake address. To access di funds, di delegator go submit Cardano transaction wey link im stake key to designated Midnight reward withdrawal key.
Di registration process go require refundable ADA deposit. Dem never fix di final amount, but di draft reference preliminary range of 10 to 40 ADA from earlier technical testing.
Di mechanism separate reward accrual from withdrawal authorization. Delegators fit accumulate NIGHT through their existing ADA delegation, while access to those rewards go depend on completing di required key registration.
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Cardano Reserve Funding and Remaining Approval Requirements
Di second draft, Cardano Reserve Release, address how NIGHT tokens go become available to fund block production rewards.
Under di proposed mechanism, one reserve contract for Cardano go release fixed proportion of di remaining NIGHT balance at predetermined intervals. Midnight go mirror those releases through di existing cross-chain bridge, to make di corresponding tokens available for reward distribution.
Withdrawals go limit to di NIGHT wey actually release from di Cardano reserve. Di design intend to preserve supply accounting across both networks without creating additional tokens.
Both proposals need approval and activation together, to link di reward calculation system to im funding mechanism.
Di initial implementation no go include block producers wey dey participate through native NIGHT staking. Their reward eligibility, operator margins, and stake snapshot rules go need separate MIP.
Several issues still need resolution before di drafts fit advance to Proposed status. Dem include governance control over reward and reserve parameters, how to allocate rewards among multiple pool owners, and clarification of di applicable documentation under European Union Markets in Crypto-Assets Regulation (MiCA).
Di proposed RekeyUnclaimedReward operation go still require Midnight ledger release wey pass version 9.1.
Dem no fit activate di system until both proposals receive approval and di necessary ledger and network upgrades don implement.