How XRD staking emissions rewards are calculated - for token holders

If you are an XRD staker (i.e. you hold Liquid Stake Units), those LSUs represent a % claim on the staked pool of XRD held within the relevant validator’s validator component. The total emissions placed into the staked pool within that validator component for each epoch is proportional to the % of the total stake staked to the relevant validator. These emissions are then reduced by any validator fees or if the validator is penalized for not participating fully in consensus for the epoch.

If your validator missed a single proposal in an epoch, i.e. had less than 100% participation, the rewards earned by that validator for that epoch are zero; and thus your rewards are also zero.

If your validator had 100% participation in an epoch, you may calculate your emissions as a staker as:

E x S x ( 100 - F )

E = This epoch’s total emissions XRD (fixed)

S = Your stake’s % of total delegated stake (for this epoch)

F = Fee % for the node you’ve staked to (for this epoch)

So let’s say you are staking 1,000 XRD, and there are currently 1,000,000,000 XRD in total that are staked. The node you are delegating to has set their validator fee to 2%. And that node has 100% participation in consensus (which a good node certainly should achieve!). Your share of the rewards for the epoch will be:

E x 0.000001 x ( 98% ) = 0.00000098 of total E

Over the course of a year of about 300,000,000 XRD emitted, this means you would receive 294 XRD – a return of 29.4% APY on your original stake!

Note: This ignores the fact that your emissions will be automatically staked into the validator component’s staked pool at each epoch, but since this is the case for everyone else, your % of total stake stays constant, leading to the same result, assuming that neither you nor anybody else is staking/unstaking.

Further reading:

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