Staking Rewards
The payouts validators or delegators earn for securing a PoS network or staking in a protocol.
Staking rewards compensate participants for proposing/attesting blocks or locking tokens in protocols. Sources include protocol inflation, transaction fees, MEV, and incentive programs. Net yield is affected by validator fees, downtime penalties, and compounding.
"A delegator receives 6% annualized rewards from a validator after fees; their effective APY depends on compounding and network uptime."
Reward rates change over time as stake participation, issuance schedules, and market conditions shift. Tax treatment varies by jurisdiction.
"When network participation rises, nominal rewards may decrease, even if the protocol’s total issuance stays constant."
Related Terms
Staking
→Locking tokens to help secure a network or protocol in exchange for rewards.
Proof of Stake
→A consensus algorithm where one's stake in the cryptocurrency is used to validate transactions and create new blocks, offering an energy-efficient alternative to Proof of Work.
Validator
→A participant in a Proof of Stake (or similar) system who proposes and attests to blocks, often bonded by a stake.
Inflation
→Inflation is the sustained increase in the general price level, often caused by money supply growth outpacing real output, reducing purchasing power.
All terms and definitions may update as the Cryptionary improves.
