Empowered by the Tezos Ecosystem DAO, Tez Capital’s new API solution improves reward distribution, ensuring fairness and accuracy in the post-Paris upgrade era.

Protocol-Rewards by Tez Capital, solutions for delegations.

Blockchain upgrades are typically a good thing in the blockchain world. They bring exciting new features, but they also come with their fair share of challenges. The recent Paris upgrade on Tezos is no different. While it introduced several improvements, it also changed how delegation rewards work, leaving many in the community scrambling to adapt. Enter Tez Capital, a team that saw the writing on the wall and decided to take action. With support from the Tezos Ecosystem DAO, they have developed Protocol-Rewards, a tool designed to ensure that reward distribution remains fair and accurate for all Tezos delegators.

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When the Oxford and Paris upgrades introduced Adaptive Issuance, it signaled a significant shift in how Tezos operates, namely in protocol rewards. Moving from a snapshot-based reward system to a minimum delegated balance model wasn’t just a technical adjustment. It became a paradigm shift. For many delegators, the risk of missing out on rewards just because they moved their tez during a cycle was more than frustrating; it felt unfair.

This sentiment was brought to light by La Bulange, a well-respected baker of the Tezos community, who took to X to voice his concerns. In a detailed post, he outlined how Kolibri oven contract delegations were being miscalculated by the new rules, leading to significant discrepancies in rewards. The post quickly gained traction, sparking a discussion among delegators and bakers on Tezos Agora. It became clear that the community was not just concerned. They were demanding a swift and effective solution to what was becoming a widespread problem.

Seeing the potential for widespread frustration, Tez Capital stepped up with a solution. Creating a proposal through the Tezos Ecosystem DAO, they outlined what they hoped to accomplish to solve this issue. Their proposal was Protocol-Rewards, an API designed to calculate rewards based on the minimum delegated balance during each cycle. But this wasn’t just about crunching numbers. It was about trust and confidence in the system, ensuring that the API would prevent unfair reward dilution and keeping both bakers and delegators satisfied with the solution.

Voting results of the Tezos Ecosystem DAO proposal.

What’s particularly impressive about Protocol-Rewards is the community support it received. The proposal used a tez-based voting system, and the project received overwhelming support. With more than 1.5 million XTZ votes to support the proposal, the community voiced their belief in the value of this project. This level of support shows how much the Tezos community cares about fairness and transparency. I can’t help but feel proud to be part of such a forward-thinking community.

So, how does Protocol-Rewards work? This system utilizes the TzGo blockchain SDK, which interfaces directly with the TzKT API to track Tezos cycles and ensure delegation rewards are tracked and paid out with high accuracy. Moving away from outdated methods guarantees that every baker and delegator receives a fair distribution of rewards. The changes do not apply to staking. Those rewards are calculated and distributed automatically on the protocol level.

What truly sets this tool apart is the autonomy it offers to bakers. By self-hosting the service, bakers like Baking Benjamins, who has spent years navigating the intricacies of delegation, can directly manage and verify reward distributions without relying on third-party platforms, taking a ton of stress out of the process, providing Baking Benjamins with peace of mind and a new level of independence in their operations.

Tez Capital has hinted that while the service operates quietly in the background, they’re exploring possibly adding a front-end interface. For bakers who prefer visual tools, this could make managing rewards as simple as a few clicks and transforming complex data into easily digestible metrics. Imagine how much simpler it could be to oversee rewards by glancing at a user-friendly dashboard. Protocol-Rewards is designed with both present needs and future growth in mind, positioning it as an essential resource for the Tezos community as the ecosystem continues to evolve.

The new locked staking mechanism on Tezos pays rewards automatically on-chain and is not addressed here, other than being mentioned along with delegation as part of the way Adaptive Issuance works. — Tez Capital

Protocol-Rewards is a big step forward for Tezos, but it’s just the beginning. As Tez Capital continues to refine the system, I’m excited to see how it will adapt to future upgrades and challenges. The issues caused by the Paris upgrade were a wake-up call, but thanks to Protocol-Rewards, we’re now better prepared to handle similar situations in the future. It’s clear that Tez Capital is committed to keeping the network fair and reliable, and I’m confident that we’ll see even more innovative solutions from them down the line.

Protocol-Rewards by Tez Capital isn’t just another tool. It is the product of what happens when the community comes together to solve a problem. With the support of the Tezos Ecosystem DAO, this project has shown that collaboration and innovation are essential in maintaining the integrity of the Tezos network. As Tezos continues to adapt and change, tools like Protocol-Rewards demonstrate how Tezos remains fair, transparent, and trustworthy. I’m excited to see what lies in the future for Tez Capital and Tezos. Together, we’re building something uniquely significant.

Tez Capital’s Protocol-Rewards: A Community-Driven Leap for Fair Delegation on Tezos was originally published in Tezos Commons on Medium, where people are continuing the conversation by highlighting and responding to this story.