Staking rewards

Staking & Delegation Stake Delegation
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Merry Christmas to all!!!

  1. How long do you predict the staking pools will be paying out rewards?

  2. Is there a time limit during which the staking pools pay rewards, but after a certain date that stops?

Thanks

2

I’m not sure I understand your Q’s. But will try an anwser.

  1. As long as the pools live and theres ADA staked.

  2. The rewards are paid in the finale of each epoch, wich consists in 5 days +/-. And, again, as long as there are ADA staked in any number of pools there will be rewards delivered.

Cheers

3

So rewards are a perpetual happening.

It will never stop and there will ALWAYS be rewards paid to the pools.

What the pool is paid now (% etc.) will never change.

There will perpetually be epoch’s every 5 days (73 a year) year after year.

Am I correct?

Thanks

4

Rewards are paid as long as the Pool keeps producing blocks and honor its declared Pledge.

Anual ROA% is about 5%, maybe more, maybe less.

Nowadays an Epoch last 5 days, and it will be always like that, unless a proposal of changing that be voted once Voltaire (governance era) be completely functional (few years for that I think)

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Pledging and Rewards — Cardano Documentation 1.0.0 documentation.

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Rewards

The expansion and future improvement of the Cardano blockchain will be greatly influenced by its community, who need to be incentivized through rewards to participate in Cardano’s development.

Staking rewards for delegators and stake pool operators come from two sources:

  • Transaction fees - fees from every transaction from all blocks produced during every epoch go into a virtual ‘pot’. A fixed percentage (ρ) of the remaining ada reserves is added to that pot.
  • Monetary expansion - a certain percentage (τ) of the pot is sent to the treasury, and the rest is used as epoch rewards.

This system is designed to ensure that the portion of rewards taken from the reserves is high at the beginning, when transaction numbers are still relatively low. This incentivizes early adopters to move quickly to benefit from high initial rewards. Over time, and as the number of transactions increases, additional fees will compensate for smaller reserves.

This mechanism also ensures that available rewards are predictable and do not vary dramatically. Instead, rewards change gradually. The fixed percentage taken from remaining reserves every epoch guarantees a smooth exponential decline.

Funding the Treasury

The Treasury’s goal is the provision of funds to develop Cardano activities through a voting process. This necessitates a process whereby funds are regularly sent to the Treasury to ensure that funds are always available.

8

See the documentation that XZact llinked, but to summarize:

  • Rewards are every epoch (5 days), though there is a delay between when they are calculated and when they are paid out.

  • What the pool is paid (on a % of stake basis) is dependent on both its pledge and how many blocks it produces in a given epoch, so some epochs will be better than others if the pool happened to be ‘lucky.’ Statistically, each pool’s ‘luck’ will average out over a prolonged period of time.

  • Yes, there will perpetually be epochs every 5 days year after year. The rewards will change over time, however, as the reserves are depleted (there is a 45 billion cap on the total ADA supply). The idea is that initially, nearly all of the rewards are paid out from the reserves, but over time as the network grows and has more transactions the transaction fees will become the dominant source of these rewards.

  • Currently, delegators receive around 5-5.5% annual return on the ADA they delegate, depending on the fees the pool charges. Anything well outside this range is due to either luck, high fees, being a poorly operated pool, or high oversaturation.

9

Aha!!

So while the tewarda will pay out doe a while, EVENTUALLY the rewards WILL STOP?

THAT was the real question I was trying to get an answer to

NOW - will they decrease over time or stop suddenly?

NOW - as rime passes will tle pools earn a lower return ( which obviously means I will also receive a lower return)?

Thank you for understanding the question I was seeking an answer to. I guess I should have written it better. LOL

10

Rewards from monetary expansion decrease over time according to the monetary expansion parameter ρ = 0.0022. Each epoch you take the remaining reserves and multiply it by ρ to determine the rewards split by all pools (this is technically not the case, but I won’t go into the details here…conceptually it’s the same though). So if the reserves had 10B ADA, then rewards for that epoch would be 22M ADA split among all pools. The next epoch, there is 9.978B ADA left in reserves so the rewards for the next epoch is 21.95M ADA…so on and so forth.
Keep in mind that this is only part of the reward pool though, the other part being the transaction fees accrued during that epoch (which is much less deterministic). The total rewards = rewards from monetary expansion + rewards from transaction fees, so there is no guarantee as to whether over time the total rewards overall increases or decreases. If, for example, there is a Defi boom on Cardano then the rewards from transaction fees could make the annual return even higher than it is now.

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Once the reserves are depleted ( which isn’t anytime soon) then rewards will come from transaction fees.

CPX

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Thank you. Two answers ago nailed in in a way that I finally understood the answer everyone has been trying to help me understand.

I sincerely appreciate everyone’s help.

I now have been able to understand the i so I consider myself completely informed about my question.

Consider this question closed.

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