# Reward & Fee

## Reward

s\[Token]/sc\[Token] tokens accrue Token rewards, generated from delegation rewards of underlying ORAI delegations. 

### s\[Token]

Holders can send a request to the s\[Token] reward contract, which prompts the transfer of accrued rewards to their account. 

### sc\[Token]

Rewards earned from staking will be automatically re-staked and accrue to the sc\[Token] to earn compound rewards, thus increasing its value against Token.

For example, 1 sc\[Token] can redeem 1 Token at the start. However, when staking rewards accumulate to sc\[Token], it will steadily gain in value. If the Token staking APY is 30%, one year after genesis 1 sc\[Token] is worth 1.3 Token.

## Fee 

The following direct fees are collected:

* **Peg recovery fee:** Only applies to s\[Token] token. Slashing events decrease the s\[Token] exchange rate, lowering the calculated value of a s\[Token] token. The protocol applies a fee of **0.5%**( configurable) to s\[Token] mints and burns whenever the exchange rate is below **1**, targeting a gradual recovery to a one-to-one peg.
* **Maintenance fee:** Only applies to sc\[Token] token. This **2%** fee is charged on the automatic compounding of rewards.
* **Orchai operating costs fee.** All accrued rewards are taxed at a configurable rate. The fee is set at **0%** but can be increased later.