HBARX Rewards Explained

HBARX: Rewards Explained

This article gives a comprehensive overview of the rewards for HBAR staking on Stader. Before we get into the rewards, let us take a look at some of the key terms to help us understand how rewards are structured.

Stake Pool TVL (Total Value Locked):

Stake Pool TVL (or just TVL) is the amount of HBAR in the Stader staking smart contract. This includes all the HBAR staked with Stader, plus the cumulative rewards till date, minus any withdrawals through unstaking.

Emission Rate:

The rewards, in HBAR, are added to the Stake Pool TVL after each Epoch. Where the Epoch is the time period between two rewards being added to the Stake Pool TVL. At launch, Epoch will be set to 24 hrs.

APY:

It is the annualized rate of rewards added to the Stake Pool TVL per Epoch. The formula for is:

(Please note that the APY is dynamic and does not guarantee a rate of return for the full year. It is only a representation of the rewards added for an Epoch as an annualized rate.

Also, note that as TVL increases and the Emission rate is fixed the APY drops and is dynamically updated on the Stader UI.)

Rewards Structure:

Recall from our product roadmap (detailed here) that we will be beginning the v1 launch with staking functionality only. Unstaking and withdrawals will be added in v2 around July 2022.

Staking rewards for the v1 product will be structured by fixing the Emission rate across 4 phases of the launch. Please note that as the Emission rate is fixed (for a phase) the APY will update dynamically with each staking operation as per our definition above.

Here is a summary of the Emission rates across the 4 phases of Stader:

Capped Launch:

• During the capped launch the product will be in a Beta mode
• This will last for 3–7 days, after which the cap will be removed and Phase 1 will start
• Each transaction will be limited to a maximum of 1000 HBAR
• There will be no limit on the number of transactions a user can do.
• Emission rate will be 2,000 HBAR per epoch (24 hrs)

Phase 1:(Criterion:TVL <= 200 mn HBAR)

• After the product is successfully tested in the capped launch, the transaction limit will be removed. Users will be free to stake any amount they want
• Emission rate will be 300,000 HBAR per epoch (24 hrs), including the epoch in which TVL crosses 200mn HBAR

Phase 2: (Criterion: 200 <TVL <=400mn HBAR)

• After TVL crosses 200mn HBAR the emission rate will be adjusted to increase rewards
• Emission rate will be 500,000 HBAR per epoch (24 hrs), including the epoch in which TVL crosses 400mn HBAR

Phase 3: (Criterion: TVL> 400mn HBAR)

• After TVL crosses 400mn HBAR the Emission rate will be fixed till June 30 and will be calculated based on the following formula:

We will be monitoring response to staking closely and additional rewards may be added based on the market response.

(Please note that all rewards shown are prior to fee deductions)

Fees:

There are various types of fees that will be incurred for HBAR staking operation, below is an indicative list for the same.

Transaction Fee:

Transaction Fee is charged by the Hedera network and will be approx 1 HBAR for Staking transactions done with the Stader smart contract.

Please Note: Hedera’s fee schedule is set by the Hedera Governing Council and is subject to change, Stader has no control over this fee nor does Stader receive any part of this fee.

Deposit Fee:

No deposit fee will be charged by Stader to stake HBAR.

Rewards Fee:

Stader will charge a protocol fee of 10% of the rewards added to the pool. (Stader makes revenue only if you gain !)

Appendix:

Here are some of the edge cases related to rewards that might occur and how they will be handled:

1. The TVL crosses 200mn and 400mn in the same Epoch:

Rewards for that Epoch will be 300,000 HBAR. We will move directly to Phase3 from the next Epoch.

2. TVL does not cross 200mn:

Phase1 will continue till Jun 30, 2022.

3. TVL crosses 200mn but does not cross 400 mn:

Phase1 will run till 200mn TVL is reached, after which, Phase2, will continue till Jun 30, 2022.