The Moonbeam staking rewards annual percentage yield (APY) refers to the total amount of staking rewards projected to be earned over an annual period, based on the then-current Rewards Rate compounding at set intervals for a 365-day period.
What determines the APY?
The APY fluctuates based on a number of different factors, namely:
1. Inflation rate of the network
The inflation rate refers to the number of new coins that are issued on an annual basis. The purpose of inflation is to pay for the ongoing security needs of the network. The higher the inflation rate the higher your staking rewards, however, this could reduce the value of the coin as supply is inflated over time.
2. Total amount bonded
This refers to the total amount of coins bonded in the staking pool. The lower this number is, the higher your APY will be.
3. Blocks per round
This refers to the performance of the collator. The more blocks a collator produces on a per-round basis, the higher the APY will be.
4. Compounding periods
The calculation of the APY is also influenced by the number of compounding periods applied, which can vary. Remember, APY increases if the number of compounding periods increases.
How to calculate APY
Stakeglmr.com has done the work for you and provides the overall APR for all Moonbeam collators as well as the implied APR for each individual collator. The APR is the non-compounded version of APY, so APR will always be lower than APY.
To determine the APR for a specific collator:
- Press the ‘counted backing’ button twice. This sorts it in ascending order
- Press the ‘28’ in the blocks per round column. This shows you the implied APR for the specific collator
Now you will see the implied APR that you can expect to receive on your delegated stake with this collator.
Can the APY change suddenly?
If the total backing for a collator increases due to a whale (someone with a lot of coins) delegating their stake, this could cause the APY to fall for that specific collator. Similarly, if a whale had to revoke their delegation from a specific collator then the APY for that collator can be expected to increase as more staking rewards will be shared amongst the rest of the pool.
It is good practice to review the APY you are earning on a weekly basis.
What will the long-term APY be?
The long-term APY for GLMR will settle between 15–30%. The APY will vary amongst collators depending on the total backing and blocks per round that the collator produces.
Be sure to review the APY that you are receiving on a consistent basis to make sure you are maximizing the returns on your investment.
If you haven't done so already, check out our staking + analytics dashboard at stakeglmr.com