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Validator economics are not final yet. Phase 1 is permissioned and does not include the full staking and slashing model described here.
This page covers the validator incentive model and rollout path. For protocol mechanics, use How It Works.

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Why validators get paid

Validators provide the PPS updates SuperVaults need to function safely. If updates stop or become dishonest, vault operations degrade quickly. Rewards exist to keep high-quality operators online and aligned with the network.

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Rewards

Vault operators pay upkeep fees in $UP for active oracle coverage. Those fees are distributed to participating validators. The intended model is:
  • more stake increases reward weight
  • better participation preserves reward eligibility
  • missed rounds reduce your effective payout
Exact thresholds and rates are governance parameters and have not been published yet.

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Staking

Phase 2 is expected to require validators to bond $UP. That bond is intended to:
  • serve as collateral for slashing
  • weight participation and rewards
  • enforce a minimum commitment to stay active

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Slashing

Slashing is designed to penalize two categories of failure:
  • misreporting — signing materially incorrect or invalid PPS data
  • insufficient participation — staying below required uptime / contribution thresholds
Exact slash sizes and observation windows are still pending.

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Insurance fund

A portion of validator economics is expected to seed an insurance fund intended to backstop depositors if oracle failures cause verified harm. It is not meant to cover:
  • unrelated smart contract bugs
  • strategy market losses
  • immaterial losses below a governance-defined threshold

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Rollout phases

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Practical takeaway for operators

Treat the current program as operationally serious even before the full economic model is live. Phase 1 may be permissioned, but uptime, correctness, and incident response still matter because the vaults depend on your node behaving like production infrastructure.