UBI & Fee Reward Distributor

This is the second of a series of articles aimed at unpacking the contents of KIRA Improvement Proposals 71-87. The first set of these articles will cover Group 1 of these KIPs, detailing the economic incentive structure for staked consensus nodes on KIRA.

This article is about the UBI (Universal Basic Income) and Fee Reward Distributor modules. These modules economically reward honest, active, network participants, aiming to foster non-Sybil behavior in line with the KIRA Code of Conduct.

Universal Basic Income

UBI is an incentivization model in which every non-Sybil network participant such as consensus node operators or governance members can earn KEX tokens, enabling these actors to perform their roles and ensure long-term maintenance of network operations.

KEX tokens are periodically issued to spending pools responsible for UBI distribution. Accounts belonging to non-sybil participants are added as beneficiaries to these spending pools, from which they may claim their share of the rewards.

KIRA defines a fixed maximum amount of KEX that may be inflated each year to UBI. This figure is immutable and not subject to governance.

Fee Reward Distributor

In KIRA, execution fees may be paid in any whitelisted token at a defined rate - these fee rewards are equally divided amongst all active consensus nodes regardless of their wealth, stake or number of delegators. These execution fees are a source of incentive for consensus nodes to maintain network operations.

The fee rewards distribution module periodically distributes a configurable percentage of all the accumulated execution fee rewards (paid by users) to all active consensus nodes. Initially these rewards will be entirely distributed to consensus nodes, later transitioning to a 50/50 split between stakeholders and consensus nodes once the staking module is live.

How This Benefits KIRA Participants

UBI and fee rewards are essential incentives to bootstrapping and sustaining long-term non-Sybil participation in KIRA Network. These economic rewards ensure that consensus nodes and governance members remain active and behave in line with KIRA Code of Conduct.

Stay tuned for the next article covering the Staking Module.

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