diff --git a/consensus/reward.go b/consensus/reward.go
new file mode 100644
index 0000000..f7dd0ea
--- /dev/null
+++ b/consensus/reward.go
@@ -0,0 +1,78 @@
+// Copyright (c) 2017-2026 Lethean (https://lt.hn)
+//
+// Licensed under the European Union Public Licence (EUPL) version 1.2.
+// SPDX-License-Identifier: EUPL-1.2
+
+package consensus
+
+import (
+	"fmt"
+	"math/bits"
+
+	"forge.lthn.ai/core/go-blockchain/config"
+)
+
+// BaseReward returns the base block reward at the given height.
+// Height 0 (genesis) returns the premine amount. All other heights
+// return the fixed block reward (1 LTHN).
+func BaseReward(height uint64) uint64 {
+	if height == 0 {
+		return config.Premine
+	}
+	return config.BlockReward
+}
+
+// BlockReward applies the size penalty to a base reward. If the block
+// is within the granted full reward zone, the full base reward is returned.
+// If the block exceeds 2*medianSize, an error is returned.
+//
+// The penalty formula matches the C++ get_block_reward():
+//
+//	reward = baseReward * (2*median - size) * size / median²
+//
+// Uses math/bits.Mul64 for 128-bit intermediate products to avoid overflow.
+func BlockReward(baseReward, blockSize, medianSize uint64) (uint64, error) {
+	effectiveMedian := medianSize
+	if effectiveMedian < config.BlockGrantedFullRewardZone {
+		effectiveMedian = config.BlockGrantedFullRewardZone
+	}
+
+	if blockSize <= effectiveMedian {
+		return baseReward, nil
+	}
+
+	if blockSize > 2*effectiveMedian {
+		return 0, fmt.Errorf("consensus: block size %d too large for median %d", blockSize, effectiveMedian)
+	}
+
+	// penalty = baseReward * (2*median - size) * size / median²
+	// Use 128-bit multiplication to avoid overflow.
+	twoMedian := 2 * effectiveMedian
+	factor := twoMedian - blockSize // (2*median - size)
+
+	// hi1, lo1 = factor * blockSize
+	hi1, lo1 := bits.Mul64(factor, blockSize)
+
+	// Since hi1 should be 0 for reasonable block sizes, simplify:
+	if hi1 > 0 {
+		return 0, fmt.Errorf("consensus: reward overflow")
+	}
+	hi2, lo2 := bits.Mul64(baseReward, lo1)
+
+	// Divide 128-bit result by median².
+	medianSq_hi, medianSq_lo := bits.Mul64(effectiveMedian, effectiveMedian)
+	_ = medianSq_hi // median² fits in 64 bits for any reasonable median
+
+	reward, _ := bits.Div64(hi2, lo2, medianSq_lo)
+	return reward, nil
+}
+
+// MinerReward calculates the total miner payout. Pre-HF4, transaction
+// fees are added to the base reward. Post-HF4 (postHF4=true), fees are
+// burned and the miner receives only the base reward.
+func MinerReward(baseReward, totalFees uint64, postHF4 bool) uint64 {
+	if postHF4 {
+		return baseReward
+	}
+	return baseReward + totalFees
+}
diff --git a/consensus/reward_test.go b/consensus/reward_test.go
new file mode 100644
index 0000000..f1e8044
--- /dev/null
+++ b/consensus/reward_test.go
@@ -0,0 +1,65 @@
+//go:build !integration
+
+package consensus
+
+import (
+	"testing"
+
+	"forge.lthn.ai/core/go-blockchain/config"
+	"github.com/stretchr/testify/assert"
+	"github.com/stretchr/testify/require"
+)
+
+func TestBaseReward_Good(t *testing.T) {
+	assert.Equal(t, config.Premine, BaseReward(0), "genesis returns premine")
+	assert.Equal(t, config.BlockReward, BaseReward(1), "block 1 returns standard reward")
+	assert.Equal(t, config.BlockReward, BaseReward(10000), "arbitrary height")
+}
+
+func TestBlockReward_Good(t *testing.T) {
+	base := config.BlockReward
+
+	// Small block: full reward.
+	reward, err := BlockReward(base, 1000, config.BlockGrantedFullRewardZone)
+	require.NoError(t, err)
+	assert.Equal(t, base, reward)
+
+	// Block at exactly the zone boundary: full reward.
+	reward, err = BlockReward(base, config.BlockGrantedFullRewardZone, config.BlockGrantedFullRewardZone)
+	require.NoError(t, err)
+	assert.Equal(t, base, reward)
+}
+
+func TestBlockReward_Bad(t *testing.T) {
+	base := config.BlockReward
+	median := config.BlockGrantedFullRewardZone
+
+	// Block larger than 2*median: rejected.
+	_, err := BlockReward(base, 2*median+1, median)
+	assert.Error(t, err)
+	assert.Contains(t, err.Error(), "too large")
+}
+
+func TestBlockReward_Ugly(t *testing.T) {
+	base := config.BlockReward
+	median := config.BlockGrantedFullRewardZone
+
+	// Block slightly over zone: penalty applied, reward < base.
+	reward, err := BlockReward(base, median+10_000, median)
+	require.NoError(t, err)
+	assert.Less(t, reward, base, "penalty should reduce reward")
+	assert.Greater(t, reward, uint64(0), "reward should be positive")
+}
+
+func TestMinerReward_Good(t *testing.T) {
+	base := config.BlockReward
+	fees := uint64(50_000_000_000) // 0.05 LTHN
+
+	// Pre-HF4: fees added.
+	total := MinerReward(base, fees, false)
+	assert.Equal(t, base+fees, total)
+
+	// Post-HF4: fees burned.
+	total = MinerReward(base, fees, true)
+	assert.Equal(t, base, total)
+}