Incentives and Penalty Mechanism

The Incentive Mechanism & Reputation System in the WebHash Protocol ensures sustainable, fair, and transparent rewards for storage nodes while maintaining high-performance and reliable decentralized hosting.

Core Goals:

✅ Reward nodes for uptime, bandwidth, and storage ✅ Penalize unreliable nodes through slashing and inactivity rules ✅ Encourage long-term participation with a reputation boost ✅ Ensure economic sustainability with trustless payments

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1. Key Components of the Incentive System

The Incentive System is governed by smart contracts. Each node must submit periodic proofs to remain eligible.

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2. Reward Structure & Calculation

A. RewardContract

Manages metrics-based reward distribution.

Data Structure:

struct NodeMetrics {
    uint256 storedData;       // Stored data in MB
    uint256 uptime;           // Uptime % (0-100)
    uint256 retrievalCount;   // Retrievals served
    uint256 reputationScore;  // Node's reputation
    uint256 lastUpdated;      // Last update timestamp
}

Key Functions:

• submitMetrics(uint256 storedData, uint256 uptime, uint256 retrievalCount)

• calculateRewards(address node)

• claimRewards()

Reward Formula:

reward = (storedData * STORAGE_WEIGHT) + 
         (uptime * UPTIME_WEIGHT) + 
         (retrievalCount * BANDWIDTH_WEIGHT);

if (reputationScore > 800) {
    reward += (reward * REPUTATION_BONUS) / 100;
}

✅ All metrics are on-chain validated ✅ Rewards are locked for 3 epochs to prevent manipulation

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3. Reputation System

Each node starts with 1,000 reputation points.

• Nodes < 300 reputation become ineligible.

Function:

function updateReputation(address node, int256 delta) external {
    nodeMetrics[node].reputationScore += delta;
    if (nodeMetrics[node].reputationScore < 300) {
        deactivateNode(node);
    }
}

✅ Enforces reliability with real performance tracking

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4. Penalty & Slashing System

Nodes must stake WebHash tokens. Dishonest or inactive nodes risk slashing.

Function:

function slashNode(address node) external {
    require(nodeMetrics[node].reputationScore < 300);
    uint256 slashAmount = stakedTokens[node] / 2;
    burn(slashAmount);
}

✅ Guards network integrity through economic disincentives

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5. DAO Governance & Disputes

The WebHash DAO oversees:

• Reward policies

• Penalty enforcements

• Dispute resolution

Function:

function disputePenalty(address node) external;

✅ The DAO votes on disputes for fair outcomes ✅ Innocent nodes recover scores ✅ Fraudulent ones get slashed and blacklisted

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WebHash’s incentive system aligns network incentives with decentralized values, ensuring that reliable nodes are rewarded and malicious ones are weeded out.