# Rewards

### W**hat is the "Annual Staking Rewards" displayed on the Stader dApp?**

The "Annual Staking Rewards" displayed on the [Stader dApp](https://www.staderlabs.com/hedera/stake/) is the current annualized rate of rewards available for staking HBAR with Stader, after adjusting for Stader's commission (10%). This rate is subject to variance based on the Hedera network and can fluctuate slightly from epoch to epoch.

{% hint style="warning" %}
### Important Note

Please note that the Annual Staking Rewards displayed on the UI is a dynamic value and does not guarantee the same rate of return for the entire year. It is only a representation of the rewards added to the staking pool and the annualized rate based on the exchange rate difference.
{% endhint %}



### **How do users earn rewards?**[​](https://www.staderlabs.com/docs-v1/Ethereum/ETHx%20Staking/faqs#2-how-do-i-earn-rewards-with-ethx) <a href="#id-2-how-do-i-earn-rewards-with-ethx" id="id-2-how-do-i-earn-rewards-with-ethx"></a>

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

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



### **How do validators earn rewards?**[​](https://www.staderlabs.com/docs-v1/Ethereum/ETHx%20Staking/faqs#3-how-do-validators-earn-rewards) <a href="#id-3-how-do-validators-earn-rewards" id="id-3-how-do-validators-earn-rewards"></a>

Validators earn rewards by participating in the Binance Chain consensus. They propose and attest to blocks, helping secure the network, and earn HBAR as rewards for their effort.



### **What is the HBARX exchange rate, and how does it change?**

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

Let's consider a scenario to illustrate this concept:&#x20;

* Suppose, at the time of staking, there are 1000 HBAR in the Stake Pool and 1000 HBARX in circulation, setting the initial exchange rate at 1 (1000 HBAR / 1000 HBARX = 1).
* Now, after some time, network rewards result in an additional 100 HBAR being added to the Stake Pool. The Stake Pool now holds 1100 HBAR, while the circulating HBARX remains at 1000.
* We calculate the new exchange rate as follows: Exchange rate (after rewards) = Exchange rate (before rewards) + (Rewards Added / HBARX in Circulation) = 1 + (100 HBAR / 1000 HBARX) = 1 + 0.1 = 1.1
* Thus, the new HBARX-to-HBAR exchange rate becomes 1.1, indicating that each HBARX token now represents 1.1 HBAR. Therefore, even if you initially staked 1 HBAR (and received 1 HBARX in return), when you decide to unstake, your 1 HBARX would be exchanged for 1.1 HBAR, 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 HBAR and stake them back for auto-compounding. This process increases the HBARX exchange rate.



### **How can I calculate earnings on my staked HBAR with Stader?**

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

