# Rewards XYO Layer One implements two primary reward mechanisms to incentivize participation: **Block Rewards** and **Step Rewards**. While both reward systems serve complementary roles, they differ in distribution timing, frequency, and intent.
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Block RewardsBlock Rewards are issued every new Block. The reward is split between two parties: The Block Producer and the Step Reward Pool./files/SOJR456HuiQ1d195JOBa/files/S6V6poyrLXNOibpZ4SWg/pages/Kmd0tuNpjA2nZrNSTLVw
Step RewardsStep Rewards issue rewards at designated "Steps", following the Step Hash feature of XYO L1. They are designed for incentivizing participation, so the majority of the rewards go to Validator Nodes and System Stakers. /files/wANQPDlM6OVHWDPoHIYZ/files/FZqZ8THyjIYKI0tzAb9L/pages/lnHADsFVvI5erA6V4lu2
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