As a Cardano investor I think it’s about time we know what our rewards for staking will be. Why are we getting left in the dark regarding this. With the 3rd phase of the testnet due in November I would like to start making investment decisions based on the staking rewards.I will not be buying anymore ADA until this is disclosed.
We have all been very patient and I will continue to do so. I just think it’s time to let everyone know. All this news about test net staking and Shelley just around the corner. It would help all ADA investors and also potential investors understand there purchase into Cardano more clearly.
A few different people have put out “calculators” to give a bit of an idea (have a look at https://antipalos.github.io/cardano-calculator/#calculator), but the reality is that there are still factors to be worked through as part of the testnet that prevent anyone from giving any definitive answers.
I would suggest you familiarise yourself with how the staking rewards will work so you understand how your returns might different from different pools.
If your decision about whether to buy ADA is based on what return you will get from staking then I would suggest you wait and not buy yet.
You’d be quite safe to assume low single figures, all of the knowledgeable speculation has been in that area. As available from much safer investments. And it will be offset by inflation anyway.
we are not Cardano or IOHK investors we are owners of Cardano utility tokens.
Short description about utility token can be found here
you can find specifics about incentives on the following website
the crudest calculation if the entire circulating supply stakes from day 1 and you distribute the rewards evenly it will be ~2.6% of your stake
- but not everyone will be staking
- staking rewards will depend on staking pool parameters
- random number generator/lotto
so it’s impossible to say… at any rate… no one should be trying to convince you what to do with your money/investments, this is your responsibility and if you spent a little more time thinking about these things rather than worrying you’d be far better off both mentally and as far as capital is concerned
I recently read an article that quoted David Esser as saying the Staking rewards (at least initially) would be on the “high end” between 6% and 12%. I hope that is not fake news.
I have said this before, but I will touch on it again.
Inflation is not a wealth creation mechanism. Instead, it is a wealth re-distribution mechanism. If the Cardano protocol were to give 100% staking rewards (meaning that every year your coin holding doubled), do you think everyone in the ecosystem would be worth twice as much as they were the previous year? The obvious answer here is ‘no’. For the same reason the US Treasury can’t just give everyone $1M USD and make everyone rich… In the case of Cardano, inflation is simply a temporary way to force every ADA holder to pay his/her share for pool operator services.
Everyone talks about staking like it is a way to get ahead, when in reality it is just a way to not fall behind. If virtually every stakeholder of ADA is receiving 3-4% from staking, and you opt not to stake, then your % ownership in the network will begin to dwindle. Because of this, staking is a way to tread water and nothing more… for now.
The idea is that the fees collected by the platform’s use will eventually be more than the costs incurred by pool operators. This is the point when ADA stakeholders will effectively be ‘making money’ from staking. Until this threshold is reached, staking rewards are meaningless for building wealth.
You are absolutely right. However for better or worse 99% of humanity doesn’t care in my opinion.
yes, i agree staking within the “incentive” period of the first 10 years is inflationary however there is another part to this calculation and that is the amount of people coming into the cardano ecosystem
those people entering the cardano system can be seen as a deflationary force
how strong that deflationary force depends on how successful ada gets adopted, if the team are successful in building a scalable, efficient, secure, dependable and feature rich ecosystem then these deflationary forces could very easily overpower the inflation of the monetary base
ultimately cardano will be deflationary of course and as we know all deflationary systems reward those who don’t spend their wealth, there is no need to risk your capital via lending for interest
We bought ADA utility tokens on exchange markets from another private persons without any obligations on our own risk.
IOHK or CF not offer to buy tokens from they companies. All tokens of CF and IOHK are on hold.
So if I was to buy 100K ADA @ 0.038, roughly 2,500,000 coins and choose to stake at 6-12% or even 3-4% I wouldn’t be getting ahead, the returns are meaningless? And then what if the price of ADA goes up, (which I know your hoping and thinking it will too) I’m pretty sure that’s going to provide passive income that isn’t meaningless. Some clear direction on rewards from Cardano/IOHK would be nice.
I am also optimistic that as time goes by the appreciation of Ada relative to fiat will dramatically outweigh the inflation of coin creation used to pay stakeholders. The average person does not consider inflation when looking at staking or mining returns in my opinion anyway.
By way of evidence for this opinion please see the picture in this article:
I would be surprised if these “articles” you refer to are published by any of the primary Cardano companies.
I would say they are articles by people who are as good as guessing or trying to drive hype, as they have interested.
Some clarification would be useful
He’s banned Phil, click on his name for more info. A compatriot of your’s I believe.
I think you are missing the point. IOHK are building the infrastructure, the protocol on which the Cardano blockchain will run. They can’t tell you what your returns will be though as it isn’t something they control.
There are lots of great videos and web pages that describe how staking will work and that different pools will have different returns for different reasons.
IOHK aren’t a bank that you can ask what interest rate they are going to give. This is a new financial system, so if you get involved it must be with the acceptance that there are still some unknowns. If you don’t want to take that risk then don’t.
Hopefully that helps.
Oh, thanks for the heads up
I really thought the trolls had given up. Most move on pretty quickly when they don’t get the same kind of reaction they do elsewhere. Trolls hate logic and reason
We sure do have a great community.
At this stage, the rewards are simply a way to incentivize stakeholders to care about staking their coins to a stake pool. If everyone in the network is staking and earning a reward of 10%, is anyone really earning anything? As an example…
Let’s say staking goes live and I have 100k ADA to start and you have 200k ADA. The expected return of block rewards is 10% annum. After one year I would now have 110k ADA and you would have 220k ADA. While nominally you have more coins than me, you still have exactly twice the amount of spending power/value as I do. This is why percentage ownership matters more than any nominal number of coins.
As I stated above, inflationary staking rewards are more about punishing those individuals that don’t participate in staking more than it is about rewarding those that do. The ones that do participate will essentially be maintaining their same % ownership in the Cardano ecosystem, and those that don’t participate will begin to fall behind and lose value over time.
As usage of the network grows organically, we will see more fees being collected and distributed to stakeholders. That’s when your true wealth begins to increase from block rewards.
Yes, all of this is true. There are definitely multiple forces that will ultimately impact the value of ADA. My only argument is that comparing one protocol that pays 5% via inflation to one that pays 10% does not mean that you are profiting twice as much in value each year.
I won’t argue with points raised here… these have been discussed many times.
The only thing I will say is this: To have a shot at becoming a self-sustaining ecosystem, Cardano needs to set its reserve reduction rate at 10-12%. (note this is different from inflation rate that you may individually get, that number depends on a lot of other factors). Why? To protect its future development.
You see a part of these rewards will go to the treasury to fund future developments. If the pot of money isn’t big enough, the protocol is likely to fail to attract and retain the high caliber talent to maintain/develop the protocol.
With 10-12% reserve reduction rate, the treasury could, at very adverse conditions (sub $2c/ADA), have a sizable budget to keep the project going, when IOHK, CF and Emurgo funds have been depleted.
For an individual investor it wouldn’t matter if he/she gets 3% or 5% staking rewards… I have done the calculations and relying on staking rewards to make your money is like flying on the plane because you like free peanuts. But for the Cardano treasury, the difference between 8% and 12% could be quite meaningful in economic terms.
Returns for investors should come from price appreciation (this is how the system is set up anyway) and that would come from non-speculative demand… Where would that demand come from? It will come from the utilization of Cardano’s blockchain. NB partnership is a perfect example of that.
I don’t think the start of staking would increase the price of $ADA beyond speculative reasons. The real, sustainable price movement will come when we have Goguen and when companies, governments and people start buying $ADA to spend it on goods and services that have been made available to them through Cardano’s ecosystem.
That price action (given we keep our supply cap) would dwarf anything you’d see in the next 1-2 years. Its a long game, its a painful game, especially considering the undue influence of $BTC on $ADA, but the work that has been done should really lead to de-coupling as markets mature.
Fast forward to 2025 and you will likely find $BTC in the bottom 20 coins that hang around just because they have some support from legacy investors. But the future will be written by 3rd generation platforms that manage to gain and sustain their economic momentum.
It’s not an easy fight (others are entering the platform space as we speak) but Cardano is by far the most advanced in bringing a superior product to market.