I have already read the topic “staking and delegating for beginners a step by step guide”, but i still don’t understand how it works. When i’m using Cardano staking calculator, it says if i will stake 10 000 ADA, i will get “7.96” ADA reward for the epoch №1, and “6.19” ADA for epoch №73. Please, can you explain how it works, why reward for epoch 73 less? It seems that reward for every next epoch should be higher, cause our staking balance increasing after every reward payout?
After 72 epochs (1 year) the ADA rewards will have decreased according to a geometric curve:
The current value of ρ (in protocol parameters, rho = 0.003) compounded by 72 epochs in a year will yield a decrease in rewards by about 20% per year… though note there are other accounts like the treasury which affect the available rewards (the thread above is a good outline of these):
1 - ((1 - 0.003) ^ 72) = .19452623720183441825
At least this should explain why the rewards expectations go down in a big step this year, and the same proportion every year, geometrically: your staking rewards are a direct result of deliberate inflation at a fixed percentage per year.
I don’t think a Staking Calculator would compound your rewards like that, since not everybody has rewards credited back into the address or wallet they’re delegating from. In general it will depend on the staking calculator you are using.