The journey of a validator balance

A simplified overview of the most common validator rewards and penalties.

A validator can propose **one attestation** and **one block** per epoch and depending on their properties the reward varies.

Rewards and penalties are based on the correctness of

**Source****Head****Target**

**Head, Source, target,** can be either positive or negative, however the **inclusion delay** can just be positive. The **Source **has to be **correct **in order to get included.

The **worst **inclusion speed reward is **base_reward * 1/32 * 7/8 **with an inclusion distance of 32** **and the **best** is** base_reward * 1/1 * 7/8 **with an inclusion distance of 1.

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*Assumption: The participation rate is 100%*

You vote correctly and gets included in the next slot: you get

**31/8*base_reward**You miss head because you got a late block and it gets included in the next slot:

**15/8*base_reward**You miss head and target cause you got late a block, you get

**-1/8* base_reward**You attest and vote correctly, but the next block is missed, you get

**55/16 * base_reward**You attest correctly and get perfect inclusion distance, but you attested on a block that most people got late as in 2., you get

**~7/8 * base_reward***The last one is the most confusing one: When there is a late block where validators miss the head, the validator that misses the head earns***more***than the validator that votes correctly, as in 2. 15/8 > 7/8*

**Best possible reward**
31/8 * base_reward
**Worst possible reward with an included attestation ("Negative Reward")**
-249/256 * base_reward

Only **valid** attestations (correct source) can be included in a block and the rewards for a block proposal scale with the amount of included attestations. Theoretically, block proposers could include aggregated attestations from a parent block, but there is incentive to do so.

Each included attestation in a block will be rewarded (if it is the first time that is included in a block) with `base_reward/8`

where `8`

is the `Proposer_Reward_Quotient`

There is **no** penalty for not proposing a block.
A block proposer which includes slashing will be rewarded with the `slashed_validators_effective_balance / 512`

where `512`

is the `Whistleblower_reward_quotient`

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*Sources
**https://consensys.net/blog/codefi/rewards-and-penalties-on-ethereum-20-phase-0/**
**https://benjaminion.xyz/eth2-annotated-spec/phase0/beacon-chain/*