#projectdeeplearning #SAGA-5:

Saga uses the staking rewards mechanism to motivate validators to participate in the security and operation of the network. Validators can mortgage Saga tokens as a deposit to participate in network consensus. In return, they will receive a certain percentage of staking rewards, which are token rewards.

Staking rewards are mainly divided into two parts. First, validators provide services to developers by providing chainlets to obtain staking rewards [1]. Chain shards are the main component of Saga and are the foundation for developers to build distributed applications. Developers can subscribe to chain shards by paying fees, and these fees will become the source of staking rewards for validators. To encourage validators to offer competitive prices to developers, Saga uses an auction mechanism where only the validator with the lowest bid is selected to become part of the active validator set. Developer fees will be set at the rate offered by the highest bidding validator in the active validator set.

Secondly, Saga also uses the staking rewards mechanism to reward validators for participating in network security. Validators will set the delegator commission rate to earn the revenue they receive from delegators. In the early days of the network, validators may not be able to fully cover their operating costs through fees, so the delegation commission rate can serve as compensation. However, in the long term, Saga's goal is to create an economic system where all costs and profits of validators are fully covered by fees. When this goal is achieved, the network may eventually target zero or even negative commission rates, where validators pay delegators through their fee income to attract delegation [2].

In general, the staking rewards mechanism in Saga plays a role in motivating validators to participate in network security and operations. By providing chain shard services and earning delegation commissions, validators can earn staking rewards in return for their participation in the network.