# Reward Process

The **Reward Process** in the Yamata network is designed to promote **fairness and transparency** in the exchange by ensuring that both **Validating Nodes (VNs)** and the **Sequencer** are rewarded based on their performance, ensuring that rewards are distributed fairly for proper behavior while maintaining the integrity of the network.

<figure><img src="/files/N7ULCj57yginfPZ3nSag" alt=""><figcaption><p>Reward Process Flow</p></figcaption></figure>

1. [**Transaction Fee Distribution**](/yamata-nodes/reward-process/transaction-fee-distribution.md) **-** where fees are split into four different buckets for **Validating Nodes (VNs)**, **Yamata**, the **Future Reward Pool**, and the **Treasury**.
2. [**Challenge Results**](/yamata-nodes/reward-process/challenge-results.md) **-** If VNs successfully challenge the Sequencer, they are rewarded from the Treasury. If the challenge fails, the Sequencer receives the locked fees.
3. [**Validating Nodes (VNs) Rewards**](/yamata-nodes/reward-process/validating-nodes-vns-rewards.md) **-** given to VNs in the form of transaction fees, Treasury balance (when applicable), and base rewards from tokenomics for validating and overseeing the Sequencer.
4. [**Withdrawal Process**](/yamata-nodes/reward-process/withdrawal-process.md) **-** VNs can withdraw their rewards at any time, but slashing penalties are applied based on their reputation.


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