Identity Validator and Staking Rewards

Staking Rewards for Identity Validators

To operate as an Identity Validator and gain the right to issue Verifiable Credentials (VCs) on the network, an entity must lock up a significant stake of the native token. Each Identity Validator is required to stake a minimum of 100,000 $H tokens. This stake serves as a bond that aligns the Identity Validator’s incentives with the network’s integrity and security. By having value at risk, Identity Validators are disincentivized from behaving maliciously or issuing fraudulent credentials, since any misconduct could lead to penalties or loss of stake (as governed by the protocol’s security measures). The staking requirement maybe modified through DAO governance and ensures that only committed and trustworthy parties participate in credential issuance. Each Identity Validator also has the right to set the verification fee it levies upon developers and verifiers for each type of Verifiable Credential issued.

Delegation and Stake Aggregation: The Humanity Protocol also enables a delegation mechanism for general token holders. Any $H token holder can delegate their tokens to an Identity Validator, contributing to that Identity Validator’s total staked amount. Delegation allows community members who may not be Identity Validators themselves to still participate in securing the network and to earn a share of the rewards. When you delegate tokens to an Identity Validator, your tokens remain in your custody (managed by a smart contract) but are counted toward the Identity Validator’s stake. In return, the delegator earns a portion of the Identity Validator’s rewards. Delegation fosters broad participation in the ecosystem, as even small holders can support the network’s identity validation process and share in the economic benefits.

Verification Fee Distribution: Whenever a verifiable credential issued by an Identity Validator is used (for example, when a third-party application queries and verifies a user’s credential), a verification fee is paid by the requester. This fee is distributed among various participants in the network according to a reward split, ensuring all key stakeholders are compensated for their roles in the verification process. The fee distribution may down the road be modified by DAO governance, but at the onset is as follows:

• Identity Validator & Delegators (25%): Twenty-five percent of each verification fee is awarded to the Identity Validator who issued the credential and its delegators. This means if an application pays a fee to verify a user’s credential, one quarter of that fee goes back to the validator responsible for originally validating/issuing that credential, along with those who delegated stake to that validator. The internal allocation of this 25% between the validator and its delegators is determined by the validator’s preset commission or reward-sharing policy. For instance, a validator might take 10% of this portion as a commission for its services and give the remaining 90% of it to the delegators, distributed proportionally to each delegator’s contribution to that validator’s stake. This flexible split allows validators to compete for delegations by offering attractive share terms, while ensuring that both the validator and supporters (delegators) are rewarded whenever the validator’s credentials see usage on the network. In essence, the more a validator’s issued credentials are utilized for verification, the more rewards that validator and its delegating community earn.

• General Staking Pool (25%): Another 25 percent of the verification fee is allocated to a general staking rewards pool that benefits all $H stakers across the network. This pool is periodically distributed (e.g. in epochs or blocks) among all users who have staked $H, regardless of which validator they are delegated to. Every staker’s reward from this pool is proportional to their share of the total staked tokens in the network. This mechanism ensures that anyone who stakes $H (either by running a validator or by delegating to one) earns a baseline of rewards tied to overall network activity. Even if a particular staker’s chosen validator hasn’t issued many credentials yet, the staker still earns rewards from the general pool as long as other activity is happening in the network. In other words, this global pool aligns the incentives of all token holders with the growth of the ecosystem: as more identity verifications occur network-wide, every staker benefits. It provides a balanced incentive so that staking remains attractive universally, while still encouraging delegators to pick capable validators (since they get additional rewards from the validator’s 25% share as described above).

• zkProofers (25%) & Foundation Treasury (25%): The remaining 50 percent of each verification fee is distributed to other critical participants and resources in the Humanity Protocol, specifically the zkProofers and the Humanity Foundation Treasury. zkProofers. In brief, this half of the fee is used to reward the network’s proof verification service and to fund future improvements, ensuring the long-term sustainability of the protocol.

In summary, the Identity Validator and Staking Rewards mechanism is designed to align the incentives of all participants in the Humanity Protocol. Validators and their delegators are financially motivated to onboard real humans and maintain high-quality, trustworthy credential issuance (since their earnings scale with each use of the credentials they issue). Everyday token holders are encouraged to stake $H — either by running a validator or delegating to one — because they receive a share of all verification activity on the network, even beyond their direct contributions. Meanwhile, those who perform the critical task of proof verification and the stewards of the ecosystem’s development are also compensated from each transaction. This holistic tokenomic design not only rewards active participation and honest behavior at every level, but also ties the value of the $H token to the growth in usage of the network’s identity services. As more applications and users leverage Humanity Protocol for verifications, more fees flow into these reward pools, creating a positive feedback loop that fuels network security, reliability, and expansion in a sustainable manner.