Staking Reward

A staking reward is a crypto asset distributed to validators and, depending on the network, their delegators for participating in the operation and security of a Proof-of-Stake network. Rewards may come from newly issued coins, a portion of transaction fees, or a combination of sources.

The amount of reward depends on the protocol. Factors can include the total amount staked, a validator's share of stake, validator availability, correctly performed duties, validator commission, and the network's issuance model.

A staking reward is not automatically equivalent to net profit. Inflation, market-price changes, commissions, and other costs can make the financial result very different from the nominal number of tokens received.

Example

If a user stakes 100 coins and receives 5 additional coins over a period, the nominal increase is 5%. If the market price of the coin falls by 20% during the same period, however, the fiat value of the position can still decline. Staking should therefore be evaluated both in units of the asset and in the user's chosen reporting currency.