Web3/Blockchain

Staking Reward Calculator

Calculate staking returns with compounding, and separate the nominal reward rate from the real return after token issuance dilutes everyone who did not stake.

Last reviewed by the Radiatus Cloud team

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A nominal staking yield is mostly a transfer, not a return

When a network pays staking rewards out of new issuance, the tokens come from inflating the supply. Everyone holding the token pays for the reward through dilution, and stakers receive it. If the whole supply were staked at ten percent, everyone's share of the network would be unchanged and the ten percent would be entirely nominal. The real return to a staker is the reward rate minus the inflation rate, which is positive only in proportion to how much of the supply is not staked. That figure is usually far below the advertised one.

Compounding frequency matters less than it appears

The difference between annual and daily compounding at ten percent is about half a percentage point, and each compounding event on most networks costs a transaction fee. Below a certain position size the fees exceed the compounding benefit, and the optimal frequency is finite rather than as-often-as-possible. Working out that break-even is a small calculation that changes the correct behaviour for most small stakers from compounding weekly to compounding rarely.

Lock-ups and slashing are the terms that decide the risk

An unbonding period means the position cannot be exited during exactly the conditions that would make you want to. Slashing means a validator's misbehaviour or downtime can destroy part of the principal, and delegating does not remove that exposure, it only moves the decision about who might cause it. A yield quoted without the unbonding period and the slashing conditions alongside it is a number with the risk removed from it.

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Frequently Asked Questions

Why is the real return lower than the advertised rate?

Because rewards paid from new issuance dilute every holder. The real return is roughly the reward rate minus the inflation rate, which shrinks as more of the supply is staked.

If everyone stakes, is the yield zero?

In real terms, close to it. Everyone would receive a proportional share of new issuance and nobody would gain relative share, so the nominal figure would be entirely a transfer between identical positions.

How often should I compound?

Until the transaction fee exceeds the marginal gain. The difference between annual and daily compounding at ten percent is about half a point, so for small positions the answer is rarely rather than often.

Does delegating avoid slashing?

No. It moves the decision about who might cause it. Delegated stake is generally exposed to the validator’s downtime and misbehaviour, and choosing a validator is the whole of your control over that.

What does the unbonding period cost?

Optionality. It means the position cannot be exited during exactly the conditions that would make you want to, which is a real cost that a yield figure quoted alone does not show.

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How to Use

Enter your stake and the reward rate to calculate returns.

Disclaimer: This tool is provided "as is" without warranty of any kind. Results are for educational and utility purposes.