The Elrond network is made up of nodes and their interconnectivity - balanced by virtue of its design, secured through its size and fast, very fast, because efficiency is what motivated its development. Every time a node joins the network, it adds more security and efficiency. The network, in turn, rewards the nodes for their contribution, generating a virtuous cycle.
We will call a node any running instance of the software application developed by the Elrond team, publicly available as open source. Anyone can run a node on their machine - great care was taken to make the node consume as little computing resources as possible. Mid-level recent hardware can effortlessly run multiple individual nodes at the same time, earning more rewards for the same physical machine.
We will call a node operator any person or entity who manages one or more nodes. These pages are for them.
Elrond is a descentralized blockchain network. This means that its nodes collaborate to create sequential blocks with strict regularity - blocks which contain the results of operations that were requested by the users of the network. Such operations may be simple transfers of tokens, or may be calls to SmartContracts. Either way, all operations take the form of transactions.
Any user who submits a transaction to the network must pay a fee, in ERD tokens. These fees are what produces rewards for the nodes.
Note that not all nodes earn rewards from these fees. Only validator nodes qualify, because they are the nodes which are allowed to take part in consensus, to produce and validate blocks and to earn rewards.
Because of the influence they have in the network, validator nodes are required to have a stake, which is a significant amount of ERD locked as collateral for the good behavior of the validator. Currently, the stake amount is set to 2 500 000 ERD. Nodes without a stake are called observer nodes - they don't participate in consensus and do not earn rewards, but they support the network in different ways.
If the validator consistently misbehaves or performs malicious actions, it will be fined accordingly and lose ERD, an action known as stake slashing, and by also having its validator status removed. This form of punishment is reserved for serious offences.
Validator nodes each have an individual rating score, which expresses their overall reliability and responsiveness. Rating will increases for well-behaved nodes: every time a validator takes part in a successful consensus, its rating is increased.
The opposite is also true: a validator which is either offline during consensus or fails to contribute to the block being produced will be considered unreliable. And a consistently unreliable validator will see its rating drop.
Consensus selection probability is strongly influenced by a validators rating. The consensus process favors validators with high rating and will avoid selecting validators with low rating.
This implies that a node with high rating produces far more rewards than a node with low rating, so it is essential that operators maintain their validators online, up-to-date and responsive.
Moreover, if the rating of a validator becomes too low, it will be jailed. A jailed validator will not be selected for consensus - thus earning no rewards. To restore the validator, it must be unjailed, which requires a fine to be paid, currently set to 2500 ERD.