> For the complete documentation index, see [llms.txt](https://docs.frequencychain.org/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.frequencychain.org/11.-reward-generation-and-distribution.md).

# 11. Reward Generation and Distribution

FreCx employs a deterministic reward model, where rewards are generated at the protocol level and distributed across node participants and ecosystem allocations.

Node rewards are structured as follows:

* Sync nodes receive a fixed reward per unit staked
* Vault nodes receive a smaller fixed reward per unit
* Cluster nodes receive a share of the remaining reward pool

An important characteristic of the system is its dynamic redistribution mechanism. When the number of active Sync or Vault nodes is below the expected capacity, their allocated rewards are not lost. Instead, the unutilized portion is redistributed within the node reward pool, increasing the effective reward for Cluster participation.

This ensures that:

* total rewards are always fully utilized
* network incentives remain balanced
* block production remains strongly incentivized

Rewards are accumulated continuously but are displayed and settled at defined intervals, which may not align with every block.


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