How does Quilibrium reward the most efficient nodes?

Introducing... the "Prover Rings" (feature available after 2.0).

Imagine a set of concentric rings. Each ring contains 8 nodes, and the rings extend outward until there are no longer enough nodes to form a complete ring. The nodes with the highest uptime (seniority) and best performance over time are positioned at the core. If a node makes a mistake, such as missing a few ticks of the master clock or providing an invalid proof, a higher-scoring node can move up to replace it.

This is why, if you've been running a node since the early days, you have an advantage. You will already have an excellent uptime score, and if you maintain your server well, you should receive the best rewards. For a complete technical explanation of what Prover Rings are, read: https://paragraph.xyz/@quilibrium.com/one-ring-to-prove-them-all

Seniority and Inactivity

Inactivity before 2.0

As of now (v 1.4.21), no prover rings exist, as they are a 2.0 feature. Measurement of seniority is based effectively on historic data in rewards (and iterations from versions 1.4.1.19/.20/.21). The total seniority is derived from the ten-second intervals of peer uptime prior to .19, the total difficulty accumulated during .19/.20/.21 for the increments a prover generated divided by the determined difficulty factor, and thereafter, the proofs generated by a peer for their prover rings.

Inactivity in 2.0

When a prover is explicitly in a prover ring however, has a penalty, in which the missed intervals degrade the seniority value of the prover, in a square of the missed intervals.

For example, if a prover misses three intervals, the penalty is nine times as impactful as missing one. Restoring presence on the ring will stop the penalty from continuing to accrue, but the penalty will begin anew if the trend continues.

When penalties accrue to a significant degree, the provers in the outer rings of the given shard will be promoted in order of precedence.

If a prover wishes to retain seniority with no penalty but needs to shut down for some time (upgrades should have no impact, but server hardware migration may take time for it to be worthwhile), they should emit a leave message for the ring to avoid score penalization.

I changed peer keys and configurations over time, can I combine them for seniority?

Many node operators experimented with different deployment strategies in order to maximize rewards as the network evolved.

To ensure that fairness is possible for operators who have changed peer keys and configurations, the prover slot join request is going to include the option of essentially "combining" multiple prover signatures, such that their seniority is additive, but not overlapping (albeit, overlapping time intervals if both peer keys were active do not count as "extra").

So for someone who ran a node during the Dawn era, generated a new key set in the lead up to 1.4.19, and once more did so during 1.4.19, they can combine these keys via a configuration step; such that their initial join request can have greater continuity of seniority for their prover range claim. Instructions on how to perform this step will accompany the 2.0 release guide, and we are working with guide writers to ensure their own instructions will include these steps in conjunction with their upgrade info.

Source: https://paragraph.xyz/@quilibrium.com/one-ring-to-prove-them-all