Q&A about app rewards and fees
- You might find this Q & A exchange useful if you're working on the business model for an application that bills in Canton Coin and / or plans to seek featured application status:
Q: Eligibility for App Rewards: Are rewards only paid to partyIDs or wallet addresses held on a validator, or could an MPC wallet also qualify for featured app status?
A: App reward collection is a minting action; the minting action involves using a proof of work completed (called a weighted activity record) as the input to a transaction. By default the automation is performed by the Splice app, on behalf of a party hosted on a Validator node. If you use an external party you'd need to write automation yourself, in some other environment, that recognizes that you've been issued an activity record by the Super Validators, and then initiate the transfer to mint the rewards. That might be feasible, but the overall design is that the application provider operates a Validator node that hosts the smart contract code and automation for its app, and uses that node to. mint its rewards. The recommended approach is to mint to a party hosted on a Validator node, and then use the automated sweep functionality in Splice to periodically move your balance from the minting Validator node to an externally-hosted wallet (for example an MPC wallet at a crypto custody service provider)Q: Triggering Rewards: What exactly triggers a reward? Is it:
- Any withdrawal from the wallet?
- Any deposit into the wallet?
- Some other type of transaction?
A: An app reward is triggered in the following way:
- An app facilitates a transaction, with the featured app provider party as one party to that transaction
- The Super Validators record all the Canton Coin burned by featured and unfeatured transactions in a round
- The total available app rewards in the round are weighted by the application weights times the amount of Canton Coin burned. Unfeatured applications currently receive a weight 0.8 for every $1 of Canton Coin burn. Featured applications currently receive a weight of 20,000 for every $1 of Canton Coin burned (these weights are configured by vote of the Super Validators, and published publicly) The Super Validators then distribute the application rewards in a given round based on these weighted records of Canton Coin burn, producing "weighted activity records" of application activity
- Automation, kicked off by the node(s) hosting each party ,then uses these weighted records as input to minting actions, which are just transfers that include weighted activity records as input.
Q: Types of Transactions: Are rewards only triggered by fund movements, or could writing data to the chain also qualify?
A: Up to and including Splice 0.3.21, app rewards are triggered by Canton Coin transactions that include a featured app party in the "provider" role. Starting in Splice 0.4.0, an app can claim any asset transfer as a featured application transaction. For the future, the Splice team proposes identifying all the transactions that carry Featured App markers, and weighting their app rewards by the amount of traffic they burn. In that approach, there's no specific constraint on what a featured app transaction may do; it will depend on the application provider's proposal to the Tokenomics working group, which approves featured apps.
Q: Transaction Costs: I’ve been told that the $8 charged by DA for the Utility license fee is essentially a cost. Does this mean every transaction on Canton incurs an $8 fee? If so, do all apps—whether or not they use the utility—need to factor this into their cost models?
A: This is an example of an application fee. Separately, the typical size of a Splice transaction across the Global Synchronizer is about 16 kB. The Super Validators require $60 equivalent in Canton Coin to be burned to produce a 1 MB traffic balance; that means that a typical transaction across the Global Synchronizer ultimately costs about $1 in Canton Coin burn, above what the application provider might charge.
