How Do Transaction Fees Get Distributed in a Proof-of-Activity System?
Similar to block rewards, transaction fees in a Proof-of-Activity system are typically split between the miner who includes the transactions in a block and the validators who approve the block. The specific distribution of transaction fees is determined by the protocol of the blockchain.
This sharing of transaction fees helps to create a more balanced incentive structure, where both miners and validators are rewarded for their contributions to the network. As with block rewards, the goal is to encourage participation from both groups to ensure the security and stability of the network.
Glossar
Distributed
Architecture ⎊ Distributed ledger technology, within cryptocurrency and derivatives, fundamentally alters systemic architecture by removing centralized intermediaries.
Transaction Fees
Fee ⎊ Transaction fees, inherent in cryptocurrency, options, and derivatives markets, represent the cost of executing trades and utilizing network infrastructure.
Transaction Fee Distribution
Incentive ⎊ Transaction Fee Distribution is the mechanism by which the cost paid by a user to execute a transaction on a blockchain is allocated among network participants, primarily miners or validators.