# Withdrawal Process

Whenever a Validating Node (VN) decides to withdraw its rewards, they are free to do so at any time. However, the **amount** they can withdraw depends on their **reputation**. The system ties the withdrawal process to a node’s behavior, ensuring that nodes are incentivized to maintain high standards of validation.

<figure><img src="/files/7hzkmBsdnCUOVqeEzPTb" alt=""><figcaption><p>Withdrawal Process</p></figcaption></figure>

### **Full Withdrawal with No Penalty**

If the VN has a **perfect reputation**, meaning they have consistently behaved properly, they can withdraw their rewards **without any slashing penalties**. This reflects that the node has maintained the network's integrity and fulfilled its validation duties effectively.

### **Slashing with Lower Reputation**

If the node’s reputation is not perfect, whether it’s slightly degraded due to minor mistakes or significantly reduced due to misbehavior, a scaling slashing fee is applied during the withdrawal process. The slashing can range from as low as 5% for nodes with moderately low reputation to as high as 100% for nodes with very poor reputation, meaning they could forfeit all rewards locked in the smart contract.

**Withdrawal Formula:**

$$
R\_{withdrawn} = Tn \times (1 - S\_{penalty})
$$

**Where:**

* **Rwithdrawn​** - is the total rewards the node can withdraw after slashing is applied.
* **Tn -** the Total rewards in the smart contract.
* **Spenalty​** - the penalty applied (ranging from 0 for no slashing to 1 for 100% slashing).

This [**slashing mechanism**](#slashing-with-lower-reputation) ensures that VNs are financially incentivized to act in the best interest of the network. The better the node's reputation, the more of their earned rewards they can withdraw, while misbehaving nodes face significant penalties when attempting to access their funds.


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