Docs/Legal & Compliance/Transaction Fee & Validator Incentive Specification v1.0

Transaction Fee & Validator Incentive Specification v1.0

Last updated: June 2026 | Public Release v1.0

Network Economic Incentive Rules

1. Transaction Fee Model

ANCORA implements a dynamic EIP-1559 style fee market with base fee adjustment algorithm:

1.1 Fee Components

Base Fee: Algorithmically adjusted per block based on network congestion

Priority Fee: Optional tip paid by users for priority transaction inclusion

Maximum Fee Cap: Hard cap of 1 ANC per transaction to prevent excessive fees

1.2 Base Fee Adjustment Algorithm

Target block utilization: 50%

Maximum base fee adjustment per block: ±12.5%

Base fee is burned permanently, reducing circulating supply

2. Fee Distribution

All collected transaction fees are distributed as follows:

3. Validator Incentive Structure

3.1 Block Reward Distribution

Block Proposer: 15% of total block fees

Active Validators: 55% of total block fees, distributed proportionally to stake weight

Reward Distribution: Automatic at the end of each epoch (2 days)

3.2 Staking Rewards

Validators earn staking rewards proportional to their stake and uptime:

Uptime requirement: ≥99% for full rewards

Rewards reduced linearly for uptime below 99%

No rewards for uptime below 90%

Rewards compound automatically at the end of each epoch

3.3 Unbonding Rules

Stake unbonding period: 28 days (14 epochs)

No rewards earned during unbonding period

Early unbonding penalty: 10% of staked amount

4. Long-Term Sustainability

After the 50-year vesting period completes:

All validator incentives will be fully funded by transaction fees

No inflationary block rewards will be required

The burn mechanism will create mild deflationary pressure over time

The network will be fully self-sustaining without reserve funds

5. Governance Adjustment

All fee parameters and incentive structures may be adjusted via governance proposal, subject to 67% validator approval threshold. Core monetary policy (total supply, vesting schedule) may never be adjusted.