REACT Tokenomics & Staking: Inflation, Rewards & APY Explained
The Reactive Network’s tokenomics model combines transaction fee burns, staking incentives, and controlled inflation to maintain long-term stability. REACT’s structured emission schedule ensures sustainable rewards for validators and participants.
Introduction
This article covers the economic design of the Reactive Network, including REACT’s inflation model, staking incentives, and the network’s Proof-of-Stake mechanism. It provides an overview of emission schedules, validator rewards, and staking distributions.
Understanding Reactive Tokenomics
Reactive’s economic model focuses on sustainability, self-regulation, and controlled inflation. Through a dynamic burn mechanism and structured incentives, the network aims to balance token emissions with its overall economic stability.
At its core, Reactive operates similarly to Ethereum’s model. However, there are distinct differences that set it apart:
Burning All Transaction Fees
Every transaction on the Reactive Network incurs fees in REACT, which are fully burned rather than redistributed to validators. This deflationary mechanism helps counteract inflation by reducing the total supply as network activity grows.
Each subscribed event triggers the execution of the reactive contract’s code, consuming gas for processing. Events can be filtered using multiple parameters to ensure they activate only when necessary, while additional contract logic can validate more complex conditions before execution.
Validator Rewards from New Token Emissions
nstead of transaction fees, validators are compensated with newly minted REACT tokens. They are selected for epochs lasting 32 blocks, during which they earn fixed rewards per epoch. Each block is produced in 7 seconds, meaning an epoch lasts approximately 224 seconds.
For example, during the initial phase, validators receive approximately 326.52 REACT per epoch, which is approximately 10.2037 REACT per block. These rewards decrease in subsequent stages.
Inflation and Deflation Balancing
While REACT follows an inflationary emission schedule, the burning of transaction fees offsets this, making the model deflationary when network activity is high. The more the network is used, the more inflation is naturally counteracted.
Epoch-Based Inflationary Stages
The network's economic cycle consists of the following stages: Early Expansion – higher inflation to drive adoption, with increased rewards per epoch and block), Growth – moderate inflation with reduced rewards as the network matures, and Maturity – inflation stabilizes, and rewards decrease as the network reaches stability.
REACT Supply & Inflation Model
- Circulating Supply: 310,256,872 REACT
- Total Supply: 500,000,000 REACT
- Target Annual Inflation: < 4.6% (after Maturity Phase, excluding burns)
- Epoch Duration: 32 blocks
- Block Time: 7 seconds
- Annual Block Production: ~4,508,136
- Annual Epochs: ~140,880
- Monthly Epochs: ~11,740
| Stage | Annualized Inflation Rate | Epoch Reward (REACT) | Block Reward (REACT) |
|---|---|---|---|
| Early Expansion | < 9.2% | 326.52 | 10.2038 |
| Growth | < 6.9% | 244.89 | 7.6528 |
| Maturity | < 4.6% | 163.26 | 5.1019 |
Reactive Staking
Staking plays a crucial role in the Reactive Network’s tokenomics, ensuring a fair distribution of rewards while maintaining network stability. At early stages, all validator rewards are allocated entirely to stakers, with distribution based on each user’s proportional stake in REACT and the duration of their participation in the staking pool, measured in blocks.
To maintain stability in the early stages, only official Reactive Network validators will be permitted to secure the network, before access is gradually opened to external participants.
Staking will begin with 6 month duration stages where REACT tokens will be locked in the staking contract until the end of the period, at which point all staked tokens and rewards will be unlocked before the next staking stage.
Staking Rewards
| Stage | Epoch Rewards (REACT) | GWEI Equivalent | Reward Per Block (REACT) |
|---|---|---|---|
| Early Expansion | 326.52 | 326,519,023,300 | 10.2037 |
| Growth | 244.89 | 244,889,267,500 | 7.6528 |
| Maturity | 163.26 | 163,259,511,600 | 5.1019 |
The Reactive Network’s economic model introduces a self-balancing mechanism where inflation is controlled through:
- Burning transaction fees to reduce total supply;
- A structured inflation curve that gradually declines;
- A staking model that incentivizes long-term participation.
The combination of deflationary pressure from fee burns and inflationary rewards for validators and stakers creates a self-regulating economy. As the network gains traction, its supply mechanics ensure that the value of REACT remains stable, making it a reliable system built for long-term growth.
How To Stake
All network information and wallet setup details can be found in this document.
- Visit Token Portal. (The portal will go live at mainnet launch, and the link will be shared at that time.)
- Connect your wallet holding REACT.
- Specify the amount to stake.
- Confirm the transaction.
Note: Unstaking is not possible until the program ends.
Dynamic APY Consideration
APY is not fixed—it depends on the total amount staked.
- If more participants stake, individual rewards decrease because the fixed reward pool is shared among more tokens.
- If fewer participants stake, individual APY increases as rewards are distributed among fewer tokens.
Dynamic Reward Distribution
Due to the nature of the validation staking distribution, the APY is not fixed but is calculated based on the total number of tokens staked at any given period. We anticipate that staking rewards will range between 15-20% in year 1, depending on participation levels.
Rewards Lock & Withdrawal
- Staking is fully locked for 6 months, meaning stakers cannot withdraw their principal or rewards early.
- Once the 6-month period ends, staked REACT and earned rewards will be released together.
Check out the PRQ to REACT Migration article to explore the bridging process and supported chains.
About Reactive Network
The Reactive Network, pioneered by PARSIQ, ushers in a new wave of blockchain innovation through its Reactive Smart Contracts (RSCs). These advanced contracts can autonomously execute based on specific on-chain events, eliminating the need for off-chain computation and heralding a seamless cross-chain ecosystem vital for Web3’s growth.
Central to this breakthrough is the Inversion of Control (IoC) framework, which redefines smart contracts and decentralized applications (DApps) by imbuing them with unparalleled autonomy, efficiency, and interactivity. By marrying RSCs with IoC, Reactive Network is setting the stage for a transformative blockchain era, characterized by enhanced interoperability and the robust, user-friendly foundation Web3 demands.
