# Validating Nodes (VNs) Rewards In the Yamata network, validators (VNs) are rewarded through multiple streams to ensure they are incentivized to secure and validate transactions. Alongside the **fee rewards** from the **Treasury** (when applicable) and the **10% base rewards** from transaction fees, VNs also benefit from base **tokenomics pool rewards.**

In the early stages of the Yamata network, when there are fewer users and the transaction volume is potentially low, the network faces a **bootstrapping problem (**chart "Network Bootstrapping Problem"**)**. **Transaction fees** (which eventually become the main source of rewards) are not enough to cover all security and validation needs when the user base is small.

To solve this, the **tokenomics pool** plays a critical role. The financial utility provided by **$YMTA tokens** (chart "Network Bootstrapping Solution") supplements the rewards to **Validating Nodes (VNs)** during this initial phase. This ensures that VNs are properly incentivized to secure the network, even when transaction fees are low, as seen in the second graph.

Over time, as the **number of users** increases and the network matures, **transaction fees** naturally grow and become a more significant source of rewards. At this point, the **financial utility** from the tokenomics pool decreases, and the rewards gradually shift to being more **transaction fee-based**. This transition ensures a sustainable network where the **application utility** of the $YMTA token takes over, and the network no longer relies heavily on tokenomics-based rewards. This design stabilizes the network by balancing **financial utility** in the early stages with growing **transaction fees** as the user base expands, ensuring that both the exchange and the validators are properly incentivized throughout the network's lifecycle. *** ### Total Rewards for VNs The total rewards for each **Validating Node (VN)** can be calculated by considering several key factors: **base rewards**, **Treasury rewards (if applicable)**, and **tokenomics rewards**. The formula below demonstrates how these variables interact to determine total rewards. **Variables:** * **Tn**: Total rewards for the node. * **Rbase**: Base rewards from the 10% transaction fees. * **Rtreasury**: Additional rewards from the Treasury (if the Sequencer is found misbehaving). * **Rtokenomics**: Rewards from the tokenomics pool. **Formula:** $$ Tn = (R\_{base} + R\_{treasury}) \times Rep + R\_{tokenomics} $$ The **earned rewards** for Validating Nodes (VNs) are held in a **smart contract** once they are received. This smart contract acts as **collateral**, ensuring that if a node misbehaves or has a low reputation, **slashing penalties** can be applied to those locked rewards. This system holds VNs accountable for their actions while still allowing them to freely access their rewards when they choose to [**withdraw**](https://docs.yamata.io/yamata-nodes/reward-process/withdrawal-process).