Cardano’s Shelley Testnet Staking Calculator: a deep dive with Lars Brünjes

Staking & Delegation Stake Delegation
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Cardano’s Shelley Testnet Staking Calculator: a deep dive with Lars Brünjes

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Want to see what ada rewards you could earn when staking arrives on mainnet later this summer? IOHK has released a staking calculator for the Shelley Testnet, so you can estimate what your rewards could be on mainnet.
(See short explanatory video on IOHK’s Twitter here:

While you can try out delegation and staking features, there are currently no rewards on the Shelley testnet. ada rewards come with Shelley on the Cardano mainnet. Currently, we estimate rewards of around 4.6% annualized on your staked ada. *****

Factors like stake pool performance total staking volume will affect the exact % (percentage) rewards you should expect. Here’s the calculator. So you can do the math. Use the sliders to understand how various parameters will affect your rewards:

For a deeper dive, check out our full walkthrough with Dr. Lars Brünjes, one of the core team behind #Cardano incentive design and implementation. He’ll take you through the core features and help explain some of the theory.

Lars will take you through the full calculator functionality, explaining parameters and options for both ada holders and stake pools, and covering both basic and advanced modes, in an extensive explanatory video.

Exciting times ahead, with staking coming soon. But a final note of caution. Scammers will try to take advantage and catch the unwary. Remember: to earn rewards, you delegate securely from your wallet.

You’ll NEVER need to send your #ADA anywhere, whatever you may be promised!

*(Please note that the Shelley Testnet rewards calculator is based on what comes out of the Treasury, and doesn’t include any Transaction Fees.)

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The current HTN-2 network appears to be giving much higher reward amounts than predicted by this calculator. For example in the last 24 period I’ve made 112 blocks with a 1.5M stake. There are about 135 pools. In that time I’ve earned about 150K ADA in rewards. Need help understanding that lol

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I tried to use the calculator and I saw that if I change the value of the inflation factor, setting it from 0.3 to 0, the ROI for the delegators goes from 4.64% to 6.07%. Why ? Shouldn’t this parameter only create a difference in Roi between the pools with a high pledge and those with a low pledge leaving the total of the distributed rewards unchanged? Instead it seems like the distributed rewards will decrease if it is set to 0.3. Thanks for a clarification.

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Does the total staked ADA influence the rewards? It does not appear as parameter in the new calculator.

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I think when you say “inflation factor”, you mean “pledge influence factor”?

Well, when the influence factor goes down to zero, pledge becomes irrelevant, so pool rewards no longer get reduced for lower pledge. That’s why your rewards increase.

The price you pay for these higher rewards is reduced protection against Sybil attacks.

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No, it does not. This is by design, so that rewards don’t change when more people decide to stake.

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Thanks for your answer Lars!
Wouldn’t it have been enough to reward pools with pledges at the expense of those without pledges to protect the network from Sybil attacks? Why then penalize all pools again by sending a large slice of rewards to the treasure?
If with the pledge factor the average rewards drop for all pools (with pledge and without pledge) from 6% to 4.6%, it means that the difference goes to the treasury, right?

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The reward scheme has been designed in a way that doesn’t change the rewards of one pool if another pool’s rewards change. If we rewarded pools at the expense of others without (or lower) pledge, then if those other pools increased their pledge, your pool’s rewards would dwindle. Which means your pool (and every other pool) would have an incentive to block pool registration certificates.

If your pledge is high, rewards for delegators to your pool won’t drop, or won’t drop as much.

That’s exactly right, yes. And it also means that if we see on the mainnet that the treasury fill quicker than expected due to effects like this, we can lower the treasury parameter and/or the monetary expansion to adjust for this.

And money in the treasury is not lost, of course. On the contrary. It will be used for important improvements to the system and benefit all in the long rung.

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What do you mean by high?
The calculator says 4.6364% with 10K pledge and 4.6449% with 5 million pledge.
Thanks!

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For the first epoch we have 0.22% of 14 billion available which is equivalent to 30.8 million and of these, if there is a 100% participation, 11.3 million will go to the treasury and only 19,5 million will remain for the delegators, which will generate an average ROI of 4.6%. If there is a participation lower of 100%, the coins for the treasury will increase and the ROI for the delegators will remain the same.
I have been with Cardano since 2018 and I will continue to hold and do staking, but honestly I was hoping for a slightly higher income.
Thanks !

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If you’ve been with Cardano long enough you’d also have noticed (during 2017/'18) several other calculators floating around, created by officials/community members, roughly estimating a first year ROS for mainnet of around 3%~3,5%. So actually this current 4,6% Shelley Testnet estimation is much higher than the initial expectation. The project will also need to sustain itself long-term, which it cannot do if the starting-year-ROS kicks off from let’s say 8%~12%, it’s just not realistic. :wink:

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Do you have a webpage that shows a rough calculation with respect to staking?

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Does this make any sense?

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Im not sure if that calculator is updated. Anyway the link for the updated calculator has been posted already in the first post.

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Thank you. It appears to be significantly lower than what the net return is based on the stakes pools list however.

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You delegate only your money (which cannot be lost by delegation) and in the worst case you will lose some interest, but can redelegate to an other pool.

While a stake pool invest real money and has other costs too (operational, marketing etc.) to secure the network and can be bankrupted i.e. much higher risk.

It works like banks or other businesses who charge a small portion of the principal’s interest for services (later more to come), and also for securing and sustaining the whole system.

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I find it odd that currently some pools have no fees of a charge a 6% fee.

I’ll just do some analysis and I’ll spread it between a couple pools and we’ll see what comes up

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I apologize. If I had to say thank you

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Can anyone tell me please, how the initial rank of the pools will be calculated? Given that the performance parameter will initially be the same for all pools, how will the other parameters such as pledge, fixed cost and variable fees be used to determine the rank? Is there a mathematical formula?
Thanks