# Managing Rewards

Nodes earn rewards through a 3-step process: Earn → Redeem → Withdraw

## Step 1: Earn (Accumulate vH)

* Functioning nodes earn/accumulate rewards daily as vH (Verification Hours)
* Two types of rewards:

  • Node Incentive Rewards — \[Formula TBD]

  • Verification Fees — \[% Split TBD]
* Rewards accumulate continuously while node is operational

## Step 2: Redeem (Convert vH → H)

* Owner must KYC before redeeming (see eligibility below)
* Redeem action: Convert accumulated vH to H tokens
* Redemption triggers 6-month vesting period
* New rewards continue to accumulate during vesting period

## Step 3: Withdraw (Receive H Tokens)

* Option 1: Wait 6 months → Withdraw 100% of redeemed rewards
* Option 2: Withdraw immediately → Receive 25% (75% penalty)
* Withdraw sends H tokens directly to your wallet<br>

> 💡 Example\
> \
> Node earns 1,000 vH over 3 months → Owner redeems to 1,000 H (starts 6mo vesting) → After 6 months, owner withdraws 1,000 H to wallet. OR owner can withdraw immediately for 250 H (75% penalty).


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