ADR 029: Bond Yield Reward-Time Payouts

Changelog

2026-05-16: Initial draft.
2026-05-16: Clarified Bond Yield event accounting semantics.

Bond Yield lets a bond provider route a configured basis-point share of future validator bond rewards to a payout destination at reward distribution time. The remaining provider reward is added to slashable bond in the same distribution cycle.

A provider with no Bond Yield configuration, or with bps = 0, receives the standard full-rebond treatment. Bond Yield stores payout configuration only; it does not introduce a separate yield balance or settlement transaction.

Context

Validator rewards allocated to a node are shared between the node operator and the node's bond providers. Provider rewards normally increase slashable bond, which compounds future reward weight and strengthens the security backing the node.

Some bond providers want predictable realized income from rewards while keeping their existing bonded security intact. Bond Yield supports that requirement by splitting only the incoming provider reward stream: the configured share is paid before it is added to bond, and the remaining share is immediately rebonded.

This keeps provider payout preferences separate from bond accounting. Existing slashable bond is not reduced by a payout, and the bond module does not need a separate ledger for unsettled yield.

Decision

Introduce MsgBondYield as the configuration message for automatic reward-time payouts. The message has one bps field and an optional payout_target.

Reward distribution applies the provider configuration as follows:

When Bond Yield is disabled, when the provider is not configured, or when bps = 0, the provider reward is fully rebonded.
When bps > 0, that basis-point share of the provider reward is paid out immediately through the configured payout route.
The remaining provider reward is rebonded immediately.

Bond Yield settlement occurs only during reward distribution. Feature state contains payout configuration, not provider yield amounts awaiting settlement by a separate transaction.

Detailed Design

Mimir Controls

BondYieldEnabled: Economic Mimir that enables automatic reward-time bond-yield payouts. When disabled, provider rewards are fully rebonded.

Provider State

BondProvider stores:

bond_address: the provider account.
bond: slashable provider bond.
bps: the share of future provider rewards to pay out automatically. 0 means no reward split.
payout_target: either empty, a THORChain address, or a THORName.

Reward Distribution

Validator bond rewards are processed before churn status changes. The node operator fee is taken from the reward first. The remaining provider reward is allocated by provider bond share.

When Bond Yield is active for a provider, its reward share is split:

payout_amount = provider_reward * bps / constants.MaxBasisPts
rebonded_amount = provider_reward - payout_amount

Only rebonded_amount increases NodeAccount.Bond. payout_amount leaves the bond module through the configured payout route. If payout cannot be completed, the payout amount is rebonded in the same distribution cycle. In that fallback case, the emitted bond_yield event reports the final settled amounts: payout_amount = 0 and rebonded_amount includes the fallback amount.

When Bond Yield is inactive for a provider, the full provider reward is rebonded and no Bond Yield payout event is emitted.

Churn and Bond Provider Operations

Bond Yield is settled only during reward distribution, not during churn. It does not change existing churn, bonding, unbonding, or provider removal processing.

Message and Memo Behavior

MsgBondYield configures future reward-time payouts:

bps: the future reward share to pay out automatically, from 0 to constants.MaxBasisPts.
payout_target: the optional payout route. Empty means native RUNE to the bond provider.

bps = 0 disables reward-time payouts for that provider and clears the stored payout_target. A target supplied with bps = 0 is not stored.

Memo form:

bondyield:<node_address>:<bps>[:<payout_target>]

Payouts

An empty payout target pays RUNE to the provider. A THORChain address pays RUNE to that address. Any other payout target is interpreted as a THORName.

The THORName must exist and be owned by the bond provider. Ownership is checked when the payout target is configured and again when a payout is attempted.

If the THORName has no preferred asset, the payout is sent as RUNE to its THORChain alias when one is set, or to the owner otherwise.

If the THORName has a preferred asset, Bond Yield credits the affiliate collector for the THORName owner. Preferred-asset swap execution then follows the existing affiliate collector rules and may be skipped when the preferred asset route is unavailable.

Events

Each successful Bond Yield payout emits the existing bond event with bond_returned for the RUNE leaving the bond module. Reward distribution also emits a bond_yield event with the provider reward share, final payout amount, rebonded amount, configured basis points, and payout target. Indexers should use bond_yield for yield-specific accounting and treat the paired bond event as the underlying transfer event to avoid double-counting the same payout.

Invariants

Bond Yield does not change the existing bond invariant:

bond module RUNE = node bond + pending bond rewards

Payout configuration is not part of the invariant.

Consequences

Positive

Unconfigured providers keep standard full-rebond behavior.
Providers can realize part of each reward without reducing existing slashable bond.
The non-paid reward share compounds immediately into bond and contributes to future reward weight, subject to the normal bond hard cap.
If a payout cannot be completed, that reward share is rebonded instead.
THORName payouts can use either direct RUNE aliases or preferred-asset affiliate collector behavior.

Negative

Yield can be received only at reward distribution time.
Non-RUNE payout depends on pool availability and payout configuration.

Neutral

Governance controls feature enablement.

THORChain Dev Docs