Network Rewards

Network Rewards are issued for the previous Challenge's Assertions approximately every hour when the next Challenge is created. The total network reward amount will be calculated based off of the emission schedule and time in seconds since the last Challenge. To calculate this you use the following formula

((daily emission rate)/(86400 seconds in a day)) * (seconds since last challenge) = total network rewards for the challenge

Although the total network Reward for each Challenge is fixed by the emission schedule, the division of the Network Reward amongst the operational and participating Sentry Keys depends on a number of factors: the total supply of XAI and esXAI, the number of keys that are operating for a given Challenge, and the reward tier of those keys.

When determining the total supply, please keep in mind the following;

1. The combined total of XAI and esXAI will never exceed 2,500,000,000. Given the Xai ecosystem is dynamic, accurately predicting monthly token reward per operational Sentry Key is not possible.

2. 100% of gas is burned, so it is not guaranteed that the supply will always be inflationary; it may experience periods of deflation.

When determining the number of keys that are operating, please keep in mind the following;

1. The total number of Sentry Keys. The Xai Foundation will not sell more than 5,000,000 Sentry keys. This is expected to take 2-3 years. The price per Sentry key will increase over time.

2. The monthly quantity of esXAI per Sentry Key will fluctuate based on the number of keys that are being operated by a Sentry Node and the reward tiers of those keys.

When determining the reward tier of Sentry Keys, please keep in mind the following:

1. Each Sentry Key has a 0.01% percent probability of participating in a Challenge, therefore some Sentry Keys will generate no rewards from each given Challenge.

2. The probability that a Sentry Key will participate in a Challenge can be increased by Staking (refer to Staking Explained).

   1. If a wallet has a v1 stake, the Reward Tier applicable to any unstaked keys in the wallet will be determined by the lower of (a) the staking capacity of all the unstaked keys in the wallet or (b) the v1 stake.

   2. If keys are staked in a pool, that pool's Reward Tier will apply to all keys staked in the pool. The pool's Reward Tier is determined by the lower of (a) the pool's esXAI staking capacity, or (b) the esXAI staked in the pool.

All Sentry Keys that participate in a Challenge will receive a pro-rated equal share of the Network Reward.

• Read more about how the total supply affects daily emissions in the section XAI & esXAI Emissions & Burning.

• Sentry key owners should prepare to stake their rewards to maintain or improve their monthly rewards.