diff --git a/contracts/sfc/ConstantsManager.sol b/contracts/sfc/ConstantsManager.sol
index b5283ea..d99082a 100644
--- a/contracts/sfc/ConstantsManager.sol
+++ b/contracts/sfc/ConstantsManager.sol
@@ -32,6 +32,9 @@ contract ConstantsManager is Ownable {
     uint256 public targetGasPowerPerSecond;
     uint256 public gasPriceBalancingCounterweight;
 
+    // number of epochs for counting the average uptime of validators
+    int32 public numEpochsAliveThreshold;
+
     /**
      * @dev Given value is too small
      */
@@ -186,4 +189,14 @@ contract ConstantsManager is Ownable {
         }
         gasPriceBalancingCounterweight = v;
     }
+
+    function updateNumEpochsAliveThreshold(int32 v) external virtual onlyOwner {
+        if (v < 10) {
+            revert ValueTooSmall();
+        }
+        if (v > 87600) {
+            revert ValueTooLarge();
+        }
+        numEpochsAliveThreshold = v;
+    }
 }
diff --git a/contracts/sfc/SFC.sol b/contracts/sfc/SFC.sol
index 0135406..dd67607 100644
--- a/contracts/sfc/SFC.sol
+++ b/contracts/sfc/SFC.sol
@@ -368,6 +368,47 @@ contract SFC is SFCBase, Version {
         minGasPrice = newMinGasPrice;
     }
 
+    function _sealEpochAverageUptime(
+        uint256 epochDuration,
+        EpochSnapshot storage snapshot,
+        EpochSnapshot storage prevSnapshot,
+        uint256[] memory validatorIDs,
+        uint256[] memory uptimes
+    ) internal {
+        for (uint256 i = 0; i < validatorIDs.length; i++) {
+            uint256 validatorID = validatorIDs[i];
+            uint256 normalisedUptime = uptimes[i] * (1 << 30)/ epochDuration;
+            if (normalisedUptime < 0) {
+                normalisedUptime = 0;
+            } else if (normalisedUptime > 1 << 30) {
+                normalisedUptime = 1 << 30;
+            }
+            // Assumes that if in the previous snapshot the validator
+            // does not exist, the map returns zero.
+            int32 n = prevSnapshot.numEpochsAlive[validatorID];
+            int64 tmp;
+            if (n > 0) { 
+                tmp = int64(n-1) * int64(snapshot.averageUptime[validatorID]) + int64(uint64(normalisedUptime));
+                if (n > 1)  {
+                    tmp += (int64(n) * int64(prevSnapshot.averageUptimeError[validatorID])) / int64(n-1);
+                }
+                snapshot.averageUptimeError[validatorID] = int32(tmp % int64(n));
+                tmp /= int64(n);
+            } else {
+                tmp = int64(uint64(normalisedUptime));
+            }
+            if (tmp < 0) {
+               tmp = 0;
+            } else if (tmp > 1 << 30){
+               tmp = 1 << 30;
+            }
+            snapshot.averageUptime[validatorID] = int32(tmp);
+            if (n < c.numEpochsAliveThreshold()) {
+                snapshot.numEpochsAlive[validatorID] = n + 1;
+            }
+        }
+    }
+
     function sealEpoch(
         uint256[] calldata offlineTime,
         uint256[] calldata offlineBlocks,
@@ -387,6 +428,7 @@ contract SFC is SFCBase, Version {
             }
             _sealEpochRewards(epochDuration, snapshot, prevSnapshot, validatorIDs, uptimes, originatedTxsFee);
             _sealEpochMinGasPrice(epochDuration, epochGas);
+            _sealEpochAverageUptime(epochDuration, snapshot, prevSnapshot, validatorIDs, uptimes);
         }
 
         currentSealedEpoch = currentEpoch();
diff --git a/contracts/sfc/SFCState.sol b/contracts/sfc/SFCState.sol
index 68906db..271368c 100644
--- a/contracts/sfc/SFCState.sol
+++ b/contracts/sfc/SFCState.sol
@@ -78,6 +78,12 @@ contract SFCState is Initializable, Ownable {
         mapping(uint256 => uint256) accumulatedRewardPerToken;
         // validator ID => accumulated online time
         mapping(uint256 => uint256) accumulatedUptime;
+        // validator ID => average uptime as a percentage 
+        mapping(uint256 => int32) averageUptime;
+        // validator ID => error term of average uptime
+        mapping(uint256 => int32) averageUptimeError;
+        // validator ID => number of epochs alive for average uptime calculation
+        mapping(uint256 => int32) numEpochsAlive;
         // validator ID => gas fees from txs originated by the validator
         mapping(uint256 => uint256) accumulatedOriginatedTxsFee;
         mapping(uint256 => uint256) offlineTime;