Rewards
What is the "Annual Staking Rewards" displayed on the Stader dApp?
The "Annual Staking Rewards" displayed on the Stader dApp is the current annualized rate of rewards available for staking MATIC or POL tokens with Stader, after adjusting for Stader's commission (11%). This rate is subject to variance based on the Polygon blockchain and can fluctuate slightly from checkpoint to checkpoint.
How do users earn rewards?
MaticX allows you to earn staking rewards on your MATIC or POL holdings. Here's an example to illustrate the process
Let's say a user stakes 100 POL and receives 100 MaticX, initially at a 1:1 exchange rate. The staking APR is 5%. Over the course of a year, the value of the user's MaticX holdings increases as the exchange rate grows due to the 5% APR staking rewards. By the end of the year, the user's 100 POL has grown to 105 POL. This demonstrates how MaticX enables stakers to continuously earn rewards, effectively growing their POL holdings over time.
How do validators earn rewards?
Validators earn rewards by participating in the Polygon POS consensus. They propose and attest to blocks, helping secure the network, and earn POL as rewards for their effort.
What is the MaticX exchange rate, and how does it change?
The exchange rate reflects the total value of the Stader staking pool for MATIC and POL, relative to the MaticX tokens in circulation. The exchange rate is calculated as: Exchange Rate = (Total MATIC + POL in the Stader staking pool) / (Total MaticX in circulation) At the time of launch, the MaticX exchange rate was initialized at 1. Over time, as staking rewards are added to the pool, the MaticX-to-MATIC+POL exchange rate gradually increases. Therefore, the exchange rate evolves as more rewards are added, directly impacting the value of each MaticX token in terms of MATIC or POL.
Let's consider a scenario to illustrate this concept:
Suppose, at the time of staking, there are 1000 POL in the Stake Pool and 1000 MaticX in circulation, setting the initial exchange rate at 1 (1000 POL / 1000 MaticX = 1).
Now, after some time, network rewards result in an additional 100 POL being added to the Stake Pool. The Stake Pool now holds 1100 POL, while the circulating MaticX remains at 1000.
We calculate the new exchange rate as follows: Exchange rate (after rewards) = Exchange rate (before rewards) + (Rewards Added / MaticX in Circulation) = 1 + (100 POL / 1000 MaticX) = 1 + 0.1 = 1.1
Thus, the new MaticX-to-MATIC+POL exchange rate becomes 1.1, indicating that each MaticX token now represents 1.1 POL. Therefore, even if you initially staked 1 POL (and received 1 MaticX in return), when you decide to unstake, your 1 MaticX would be exchanged for 1.1 POL, 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 MATIC and POL and stake them back for auto-compounding. This process increases the MaticX exchange rate.
How can I calculate earnings on my staked MATIC or POL with Stader?
To calculate your earnings, multiply your MaticX holdings by the exchange rate to find the current worth in POL. Then, subtract the original amount of MATIC or POL you invested. If you initially staked MATIC, you will first need to convert it to POL before performing this calculation.
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