Rewards

What is the "Annual Staking Rewards" displayed on the Stader dApp?

The "Annual Staking Rewards" displayed on the Stader dApp is the annualized rate of rewards available for staking ETH with Stader, after adjusting for Validator and Stader's commission (10%). This rate is subject to variance based on the Ethereum blockchain and can fluctuate slightly from epoch to epoch.

How do users earn rewards?​

ETHx allows you to earn staking rewards on your ETH holdings. Here's an example to illustrate the process

Let's say a user stakes 100 ETH and receives 100 ETHx, initially at a 1:1 exchange rate. The staking APR is 5%. Over the course of a year, the value of the user's ETHx holdings increases as the exchange rate grows due to the 5% APR staking rewards. By the end of the year, the user's 100 ETH has grown to 105 ETH. This demonstrates how ETHx enables stakers to continuously earn rewards, effectively growing their Ethereum holdings over time.

How do validators earn rewards?​

Validators earn rewards by participating in the Ethereum 2.0 Proof of Stake consensus. They propose and attest to blocks, helping secure the network, and earn ETH as rewards for their effort.

How can I calculate earnings on my staked ETH with Stader?

To calculate your earnings, multiply your ETHx holdings by the exchange rate to find the current worth in ETH. Then, subtract the original amount of ETH you invested.

What is the ETHx exchange rate, and how does it change?

The exchange rate reflects the total value of the Stader staking pool for ETH, relative to the ETHx tokens in circulation. The exchange rate is calculated as: Exchange Rate = (Total ETH in the Stader staking pool) / (Total ETHx in circulation) At the time of launch, the ETHx exchange rate was initialized at 1. Over time, as staking rewards are added to the pool, the ETHx-to-ETH exchange rate gradually increases. Therefore, the exchange rate evolves as more rewards are added, directly impacting the value of each ETHx token in terms of ETH.

Let's consider a scenario to illustrate this concept:

• Suppose, at the time of staking, there are 1000 ETH in the Stake Pool and 1000 ETHx in circulation, setting the initial exchange rate at 1 (1000 ETH / 1000 ETHx = 1).

• Now, after some time, network rewards result in an additional 100 ETH being added to the Stake Pool. The Stake Pool now holds 1100 ETH, while the circulating ETHx remains at 1000.

• We calculate the new exchange rate as follows: Exchange rate (after rewards) = Exchange rate (before rewards) + (Rewards Added / ETHx in Circulation) = 1 + (100 ETH / 1000 ETHx) = 1 + 0.1 = 1.1

• Thus, the new ETHx:ETH exchange rate becomes 1.1, indicating that each ETHx token now represents 1.1 ETH. Therefore, even if you initially staked 1 ETH (and received 1 ETHx in return), when you decide to unstake, your 1 ETHx would be exchanged for 1.1 ETH, accounting for the rewards added to the Stake Pool.

When are staking rewards accumulated and added to the pool?

Stader smart contracts accumulate the rewards earned natively from staked ETH and provide them to the Node Operators to run validator, resulting in auto-compounding of rewards. This process increases the ETHx exchange rate.