Two revenue streams
| Stream | Currency | Source | Frequency | Depends on |
|---|---|---|---|---|
| Service fees | ETH | Gateways paying for compute | Per job (probabilistic) | Volume of work, price, uptime |
| Inflation rewards | LPT | New LPT minted each round | Once per round | Total bonded stake; the reward call |
Service fees (ETH)
Gateways pay with probabilistic micropayment tickets. Each ticket has a face value and a win probability; the orchestrator redeems only winning tickets on-chain for ETH. Over many tickets, earnings converge to face value × win probability. How fees are split is set by the orchestrator’s fee share (feeShare) — the percentage of fees
passed through to delegators:
feeShare of 80% means delegators share 80% of fee revenue and the orchestrator keeps 20%. For
delegators, higher feeShare is better.
Current Explorer surfaces label this Fee Share (the part passed to delegators), not “fee cut.”
Read it as: higher is better for delegators.
Inflation rewards (LPT)
The protocol mints new LPT each round. An active orchestrator’s pool receives a share proportional to its total bonded stake — but only if it callsreward() that round. A missed call forfeits
that round’s LPT for the whole pool, permanently.
How the pool is split is set by the reward cut (rewardCut) — the percentage the orchestrator
keeps:
| Reward cut | Orchestrator keeps | Delegators receive | Implication |
|---|---|---|---|
| 0% | none | 100% | Maximum pull for delegated stake; operator earns nothing from rewards |
| 10–25% | 10–25% | 75–90% | Common production range; balances operator return with delegator appeal |
| 100% | 100% | none | Maximum operator return; delegators get no LPT rewards here |
rewardCut and feeShare move in opposite
directions, which is a common source of confusion — see the table below.
The two settings, side by side
| Setting | Controls | Better for delegators when |
|---|---|---|
rewardCut | Share of LPT inflation the orchestrator keeps | Lower |
feeShare | Share of ETH fees passed to delegators | Higher |
A worked example (delegator’s view)
Suppose in one round:- 900 LPT of issuance is available to delegators and orchestrators (after any treasury cut),
- your orchestrator controls 5% of total bonded stake → its pool gets 45 LPT,
- its
rewardCutis 10% → delegators share 40.5 LPT, - you hold 10% of that pool’s stake.
Why inflation matters even if you don’t operate
The protocol targets a bonding rate (~50% of LPT bonded) and adjusts inflation to steer toward it: under-bonded → inflation rises to attract stake; over-bonded → inflation falls to reduce dilution. Issuance can also carry a treasury cut (LIP-92 set 10%, currently paused at its balance ceiling). The practical takeaway for both roles: the mint rate is not static — check the live values rather than an old annualized figure.An orchestrator’s costs
Earnings are only half the picture. Orchestrator costs fall into three buckets:- Hardware — GPU(s), server, networking (capital, amortized).
- Infrastructure — electricity, bandwidth, colocation/cloud (electricity is usually the largest recurring cost).
- Staking opportunity cost — LPT locked in self-bond can’t be used elsewhere.
Next
Set pricing (orchestrator)
Price competitively so gateways select you.
Choose an orchestrator (delegator)
Use these settings to compare operators.
Governance & the treasury
Where the treasury cut goes — and the vote your stake carries.