Why shelley rewards reduced twice as in itn?


I see in shelley calculator only about 5 perc return it is twice less than it was in itn. Can anybody explain why?

Presumably they think that’s the minimum return required to get enough people staking. There are probably also other factors but that would be the main one.

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A comparison to Bitcoin was made in Lars’s Blog : cut the rewards in half every 4 years.
I guess they could have set up a system distributing 15% returns, but the reserve would have been used up too quickly.

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The ITN was a testnet and IOHK (I had zero visibility into the decision) must have thought that if it was only a testnet then above normal incentive would be required to get people involved to make the testnet experiment produce the useful information IOHK was hoping for.


We are trying to build something sustainable and long term. I was pretty sure that we wont get that much rewards as we did in the ITN. As @Psychomb already said, i guess if we did we would run out of reserves to quickly.

People have been guessing about mainnet rewards for years. If you look back at old posts you’ll see most people expected around 3-5%.


Didn’t the ITN run much faster (=shorter epochs), resulting in higher return, for the sake of testing efficiency?

I’ve been out of it for a while, but AFAIK projected mainnet rewards haven’t been lowered – it was the ITN that was boosted.

Nope, if that was it, mainnet rewards would be one fifth of ITN, not (roughly) a half.

I rather have 2% from a $10 coin then 10% from a $0.3 coin.
It’s basic math…

If it’s too high then price won’t go up because “supply and demand” (diluted)
So making the coin somewhat scarce with staking reward around 5% is good and not a bad thing.

And don’t forget that the price of ADA itself might follow inflation, just because it’s somewhat scarce.

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Why the new staking calculator doesn’t include a parameter for the total staked ADA? Doesn’t rewards depend on that?


As I tried to explain in my blog, we have to strike a balance between rewards, longevity of the reserves and influx to the treasury.

We made a proposal that seemed to hit a sweet spot, but the Community can of course disagree and set other priorities, in which case the parameters can always be changed.

Apart from that, rewards will be much higher if more people use the system (and transaction fees go up) and/or if the exchange rate goes up. Which means that working on adoption will be a win for all of us.


Rewards should always be calculated on an annualized basis in order to compare like with like.

Once you look at annualized returns, the epoch length is irrelevant. The ITN ran shorter epochs because that would give IOHK more useable and useful results.


intelligent thought

Indeed. However Charles said in one of his videos he expected similar rewards as the ITN. With that said, this is disappointing

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That surprises me, no disrespect but I’d like to hear it for myself.

I have watched all his videos from beginning to the end…So unfortunately I can’t remember which one he said this Rob…:slight_smile:

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I’ve also heard that. But well he didnt state it as a fact.

Cant remember the Video aswell^^ There are just to many :smiley:

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he said and so what. The better it is different, because it means that there is a team who decides and not only Charles

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I’m not a technical cardano expert, but a believer in the future off it. Staking has no risks for the stakers, so all we get is profit for us. Most profit will come when the system reaches more adoption and people and businesses are really using it. That wil increase the ada
Price. If you Hope to earn money with ada, i think the future price off, p.e. In 2025, it is much more important than 2 or 3 percent more staking rewards in the coming years.


I’m a long term believer in the project so to earn 3-5% is just an added bonus!