Staking Rewards and Penalties

A staking reward pool is also provided for each Service requiring trust. Services that require more trust have a higher reward pool. This reward pool is distributed monthly based on the distribution of Citizens and DAOs that stake LEOS on the Services. Staking is done by locking LEOS coins in a fund attributed to a specific Service provider.

If the Service makes a mistake, they can also be fined. There are two parts to each fine. The base fine is charged to the DAO that runs the Service, while the stake fine is covered by all those that have staked in the Service.

This model incentivises Service providers to provision correctly running software while providing a shared risk and reward exposure for Citizens and DAOs that want to back the Service based on their trust in the DAO that runs it.

This is similar to staking pools on Ethereum but is more explicit, predictable for node operators, transparent, and fairly governed.