A very nice ADA calculator by Dr. Ichikawa

Where does the mentioned interest rates came from?

`Interest Rate = 9.13% (1st & 2nd year), 6.28% (3rd year), 4.57% (4th year)`

This calculator sounded very much magical to me.

What is the formula of it?

9.13% (1st & 2nd year)

6.28% (3rd year)

4.57% (4th year)

So for example if you have 1,000 ADA:

1,000 x 0.0913 = 91.3 ADA

9.13% = 0.0913

6.28% = 0.0628

etc

Did this help?

Nop, where did 9.13, 6.28 and 4.57% came from?

And why stops at year 4?

what interests rate?where can I read about it?

It is a forward looking calculator, when the ** reward era** starts Cardano will operate completely decentralized until then this is an EXAMPLE of what you can expect.

Given the source I would say the reward example should be close.

This calculator only goes to up to year 4,a design choice.

Read more about Cardanoâ€™s novel reward mechanism for incentivizing Proof of Stake:

Ouroboros: A Provably Secure Proof-of-Stake Blockchain Protocol

@Chainomatic I wish I could understand that paper, but that math is accessible only to PhDs, am I wrong?

would be nice someone summing it up to make it accessible to common mortals

At the top of the calculator site, it says:

This site is unofficial and the result is approximate. We canâ€™t guarantee your future rewards.

It sounds like the rates of return are currently speculative.

This is awesome! Where did you get the numbers from? Arigato Hozarimas.

All these questions, without an answerâ€¦

And yet, 3 months later:

We are all interested, but I think the answer is lost in time

P.S. But everyone seem to enjoy some magic that shows them â€śmuch profit!â€ť =)

Data comes from the old monetary policy.

So Dr. Ichikawa just did the math ( 2000 ada per block)

No magic my man

Friendsâ€¦ please review this â€śbasicâ€ť math

so 2000 ada per slot

for 3 744 961 slots

1 epoch = 21599 slots

so for 173 epochs (865 days

7 489 922 000 ada will be minted

-25 % to treasury = 5 617 441 500 distributed as rewards

5 617 441 500 ada during 865 days (2.3 years) = 1 year = 2 442 365 869 ada

Circulating Supply

25,927,070,538 ADA

9% of it is ~ 2.3 bil ada - very close to this 2.4 bil math

**If all ada will be staked we will still be getting almost 10%**

**if less, than even more**?

Thatâ€™s nice, where did you get that as I was trying to find any related stuff on the web archive and other sources wo/ any success.

Thank you @Adafans_io for finally resolving this age-old question!

I now understand the reasoning behind the calculator, so that question is closed, thank you!

About the numbers, tho: they still seem waaaay off to me 10% inflation is way much, and then rapid drop to 5% seem way rapid. It would be an explosive inflation for few first years decreasing at speed `2000/2^(year-1)`

so in year 6 it would already be `2000/2^5 = 2000/32 = 62 ADA per block`

and this would only be 2025, which is not that far away. I guess ADA would cost more in 2025, but not necessarily **that** much more, and the competition would also probably get higher for pools.

In the current revision of the monetary policy - thereâ€™s no such numbers, which makes sense to me (https://cardanodocs.com/cardano/monetary-policy/). I reckon something more smooth, like: 5% first year, 4.5% next year, 4% next year, 3.66% next year, 3.33% next year, etc. would be more suitable, but I didnâ€™t run the math, tho

UPD: math is *waaaaay* off, since I wrongly assumed that halving would happen each year. In reality it would happen ~ each 2.5 years (3â€™744â€™961 slots, but it implies an assumtion that slot time will not change, so in reality might be way more often, if we switch, for example to a 10 second slots). That would give us inflation reduction at more conservative rate of `2000/2^((year/2.5)-1)`

, so 62 ADA per block would be reached in around year 2031, not 2025. Sorry for the mistake.

Thx, it makes sense.

why they used 2000/1000/500 in old policy? Halving countdown for btc http://www.bitcoinblockhalf.com/