Why

Proposing a new block to be included in the network is usually rewarded as a way to incentivize participation in the protocol.

It’s the action of proposing (i.e. actively participanting in the protocol) that is rewarded, not simply the fact of owning stake.

When

Although some protocols (like Cardano) distribute rewards per-epoch, this would require to have a mapping between identities and blocks proposed, which would go against our goal of hiding this information from the general public.

The most promising option seems thus to let nodes collect rewards for participation in consensus when proposing a block. Other rewards (e.g. mixnet participation) can follow other patterns)

How

Rewards can come from two sources:

Regardless of the source of the reward, the effect is that the block proposer is entitled to redeem this value, and the rest of the document will ignore the origin.

In essence, there should be a way for the block proposer to redeem R amount of stake, with the amount being determined through some external mechanism (for example, monetary expansion could be a function of the block number like in Bitcoin).