Cardano Staking Profits Calculator

staking
calculator

#1

Hi, everyone!

There’s a new Cardano staking profits calculator that might be useful for some people. I would really appreciate if you read the following information first:

History

For the last couple of months there was a lot of speculations going on about how much profit the Cardano staking will provide. The closer we are to the test-net the denser those speculations become. Up to the point where some individuals are writing articles and creating telegram groups about specifically the Cardano staking, but at the same time they cannot understand plain english of documentation and just make 10 logical errors per statement. Or up to the point where people just say: “tell me in simple words - what the profit will be?”

This is an EDUCATIONAL project

All of the above has inspired the creation of this project. And the main point of this project is to show how COMPLEX and UNCERTAIN those estimates are and to show how much yet UNKNOWN variables are used in the process.

No results, provided by this calculator, should be considered to be a promise of future profits! All this project does is shows the complex formula that might be somewhat similar to the one that will be used in the Cardano platform and demonstrates what would be an approximate average profit for a person IF all the system behaviour were somewhat similar to the selected parameters in the same period of time.

Support

You can ask questions in this thread or in the specific GitHub issue (link in the About section). There is a little roadmap for this project so future development is still supported.

As soon as new data about staking will be available - I will change default parameters or the calculation method in the calculator. All news will be also posted in this thread.

Link: https://antipalos.github.io/cardano-calculator


Staking ada
Proof of stake rewards question
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Shelley to go live by 4Q18 or 1Q19
#2

Looks very good, thanks for creating and sharing!


#3

Good job! Would be nice to see the return/year in percentage in the approximate profit section.


#4

Done! :slight_smile: Really good idea, thanks!


#5

Cudos! I am actually curious. Where did you find the information in the cardano docs about the variables for returns in the staking pool? I know this information exist, I just can’t find it.


#6

There’s a Formula page on the calculator website that provides detailed explanation of how calculations are done, and there are also three links at the top that are used to get all the required information :slight_smile: Along the way of the explanation each used value is also explained. Additionally there’s some info on the FAQ page.


#7

:man_facepalming:

Edit: Seems like they took down the page for staking currently:
https://www.cardano.org/en/staking/


#8

Unfortunately, the whole Cardano website seems to have some technical problems right atm :slightly_frowning_face: I’ve replaced the link address so it goes to the forum summary now. Hope it’s fixed soon - then I will put it back in :slight_smile:


#9

Awesome contribution @vantuz-subhuman

The roadmap is impressive.
The FAQ section made me laugh. Maybe add
When to the moon eh?


#10

Well done.

Just one question… so are you saying this is a completely accurate and official calculator?

Also on a last note…

If we had to be completely honest about things… The inflation per year has to be deducted from the end result… While the “Profit” in ADA is correct, the profit in terms of value would require a new row. Most people who look at calculators are looking for ways to calculate their profit in value (that is what they are inherently thinking they are looking at)

But nice work, when we got all the parameters, we can get a insight into the exact numbers, and I am curious to see the after-inflation results - they will depend on the amount of coins staked and rewards from fees - early on most of the rewards will come from deflating the non-stakers.

The main incentive early on to stake is actually not rewards, it is to not be inflated.

At about 78% staking-participation, just with your numbers, which I feel will be pretty close, staking becomes a negative-event (loss) - I think the treasury tax will actually be higher than 20%, so the number might be slightly lower… -Which is also what Ive been saying in the forum, that is expected, just wasn’t sure where this point would be.

The main reason for this loss is that the treasury is not participating, but only gaining from this inflation… It is true though that if the treasury money is put to good use, providing ROI, this value is increased or retained, so while it will have a negative effect short-term in the long term it will provide value recouping the loss.

So if we get a high amount of staking, you can rename it the Cardano Staking Loss calculator… Lol… Just doesnt have the same ring to it :smiley:


#11

Good point, but where it differs from fiat staking?

What do you think about these red ornaments on top and bottom of the calculator? At the first moment - while not looking at it exactly - I also thought this are flowers… :wink:


#12

Doesn’t look like anything to me.


#13

I am saying exact opposite over and over again.

The main point is to show that this is the MOST accuracy ANY calculator will be able to get at this point.

UPD:

Ah, you got me there for a second

This is planned for next versions along with restaking. Thanks!


#14

Thanks for sharing!!!
Now I realize that I need more Cardano… :thinking:


#15

Thanks for sharing. Playing around with the numbers and looks like current formula is around 2-3% profit per year depending on stake %. (I think stake will be higher than 50%.) If that is the case that is probably going to be too little, I could get better interest rates in my bank and most of the world can as well. Then again not going to make any surefire statement on that as perhaps people will like to have ada currency for other reasons and the POS reward is more an “icing” on the cake. But will be interesting to see how it plays out and at what % of staking it will balance at and how many will sell or buy more ada currency depending on staking reward.


#16

Thank you for your feedback. Regarding this point, please consider these points:

  1. Not all people have access to banks, and for those people having even 3% stable yearly profit would be amazing.

  2. Do not forget that you get completely passive profit in capped deflationary resource - after year 3 total inflation on supply will already be under 2% and further lowering.

  3. Do not forget that for some initial years after launch of the staking, when supply inflation is the highest, the main incentive of staking is not to get profit, but is to not get loss in value due to inflation, as @jb455 validly pointed out.

So, in bank you may get greater % on your deposit, and you will receive dividends in an inflationary currency that’s constantly loses in value, and the dividends are in a constant race with inflation. And in Cardano you will probably get lower % but in deflationary currency that additionally to being handed to you also grows in value.

Anyways, the whole point of staking reward is not really to make people rich, so: the more people consider staking unprofitable - the more profitable it becomes for everyone else :slight_smile:


#17

Again thanks for you work and also for your active discussion on the matter.

  1. In general I agree, however most of those will have a hard time gaining access to ADA as well unless some better way of purchasing ADA arrives it is currently usually made from a starting point of either a credit card or a bank transfer unless there are other methods I am not aware of. Hopefully in the future it will be easier to gain ADA from other sources and cold wallet / paper wallet stake so people who do not have computers or bank accounts can participate.

  2. Again in general I agree, however the asset class you are invested in is by many investors considered highly risky and volatile and while it is a capped deflationary resource - the future value of the resource is much more unsure.

  3. Yes I think so as well and will be well sought after as wealth / buying power preservation is something many want to achieve.

Absolutely. But I am pragmatic on the issue. I think you need greed to get mass adoption fast enough. Also I understand that there will be an equilibrium at the point of those who want to accept a lower interest rate and who are staking vs those who don’t. However this fails to consider that many of those who do not stake will then also possible sell the currency.


#18

Thank you for sharing this calculator.

I think IOHK needs to hire an experienced economist to sort out the financial incentive schemes. Maybe they have… I don’t know.

I have a huge respect for developers, but they have a significant knowledge gap in how the business/finance dynamics work and might overlook some simple parameters.

Assuming the technical issues of the network (persistency, stability, etc.) are resolved the financial incentives should be reasonable enough not to jeopardize the system. You need players with all sorts of background to support your network. There should be a healthy mix and the more diverse these participants are (and yes I do include the day traders, and speculators, etc.) the more prolific the system will be.

Maxims such as: “it is not about making people rich”, are just childish in a free market system where Cardano eventually will operate. Let them take risks, let them get rich…because at the end it will drive Cardano’s adoption one way or another.

At the end the value of the platform will be unlocked through its actual utility. At the heart of it, any network provides computing power, storage and connectivity. When the project is complete, I am sure we will have a far superior platform to what already exists in the market.

People will want to develop serious projects on Cardano. Countries will want to use it to augment their financial infrastructure, people will store their bitcoin on Cardano’s chain, cryptokitties and other games will live on this network all because it will be the safest and most reliable platform ever developed in this space. All of this will create a huge demand for ADA. Compared to that demand, the ADA45bln capped supply will be a drop in the bucket and I would not be too surprised if prices start being quoted in Lovelaces 18-24 months from now.

I feel those who are just focused on staking are missing a bigger picture. I am absolutely certain we will have an unparalleled platform. The one that will not only revolutionize the crypto space but the internet itself through the use of RINA.

How much would you pay to own the token that fuels the next generation of Internet?


#19

I think this is a good approximation of returns from staking ADA

Do I need to send some ADA to a staking smart contract or can I get returns by holding ADA in Daedalus or some other Hardware wallet?

Thank you


#20

You can hold the ADA on Hardware or paper wallets (cold staking) or in Daedalus and then select & delegate to the pools directly from there.
You cannot hold ADA on exchanges and stake them at the same time.