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Elrond is a descentralized blockchain network. This means that its nodes collaborate to create sequential blocks with strict regularity - blocks which contain the results of operations that were requested by the users of the network. Such operations may be simple transfers of tokens, or may be calls to SmartContracts. Either way, all operations take the form of transactions.

Any user who submits a transaction to the network must pay a fee, in EGLD tokens. These fees are what produces rewards for the nodes.

Validator node


Not all nodes earn rewards from these fees. Only validator nodes qualify, because they are the nodes which are allowed to take part in consensus, to produce and validate blocks and to earn rewards.

Because of the influence they have in the network, validator nodes are required to have a stake, which is a significant amount of EGLD locked as collateral for the good behavior of the validator. Currently, the stake amount is set to 2 500 EGLD. Nodes without a stake are called observer nodes — they don't participate in consensus and do not earn rewards, but they support the network in different ways.