Block Reward

A block reward is the compensation given to the entity that successfully validates a new block. It is usually paid out in the native coin of the network at a fixed, but often decreasing rate. Block rewards serve as the primary mechanism for creating new currency within a blockchain network and play a vital role in incentivizing network operation and security. In Proof-of-Work (PoW) blockchains like Bitcoin, miners are responsible for block validation and earning block rewards. In Proof-of-Stake (PoS) consensus models used by blockchains like Cardano, Algorand, and Ethereum Consensus Layer, the block reward is given to those who stake the native cryptocurrency of the network.