F1 Fee Distribution

Abstract

In a proof of stake blockchain, validators need to split the rewards gained from transaction fees each block. Furthermore, these fees must be fairly distributed to each of a validator’s constituent delegators. Delegators accrue this reward throughout the entire time which they are delegated, and they have a special operation to withdraw accrued rewards. 
The F1 fee distribution scheme works for any algorithm to split fees and inflation between validators each block, with minimal iteration, and the only approximations being due to finite decimal precision. Per block there is a single iteration over the validator set, to enable reward algorithms that differ by validator. No iteration is required to delegate or to withdraw. The state usage is one state update per validator per block and one state entry per active delegation. F1 can optionally handle arbitrary inflation schemes, auto-bonding of rewards, and varying validator commission rates.