The latest and greatest on ICP staking rewards (was last updated 6/4/2021).
1. How are Rewards Calculated?
ICP staking rewards are a bit complex and depend on the following variables:
– Length of dissolve delay for your neuron (8 years = 2x reward, 4 years = 1.5x reward, etc.)
– Age of your neuron (how long it has been since you clicked dissolve–max of 25% bonus after 4 years)
– Votes on proposals (are you following a neuron(s) that votes on all proposals)
– Average age of neurons
– Total number of people staking their ICP
2. My Results Over the Past 10 Days
The maturity for my 8 year dissolve delay neuron increases by about 0.078% every day. (note this data was taken from May 23 to June 4 2021). Because maturity is reward ICP divided by total staked ICP, the daily increase in my maturity is essentially the daily rate of return on my staked ICP. So if we multiply by 365 we can get an APR: 0.00078 * 365 = 0.2847, or 28.47%.
Right now I am earning 28.47% APR on my staked ICP! I receive rewards in the form of maturity, which once it gets above 1 ICP, I can spawn a new neuron with my newly minted ICP (has a 7 day dissolve delay). Then I can either dissolve my new spawned neuron to transfer my ICP and sell for $$, or I can dissolve the new neuron and send the new ICP back into my existing staked neuron (for better compounding).
This APR is based on an age bonus of essentially 0 (neuron is only a few days old), a dissolve delay set at 8 years (to get the maximum dissolve delay reward bonus), and relatively few people staking their ICP. This means that over time as more people stake their ICP, the reward will go down. The APR I quoted above has been surprisingly consistent over the past 10 days and hasn’t varied that much. But inevitably over time the reward will come down.
3. Results Over the Next Few Years
To get a better sense for ICP staking returns over many years, check out this excellent ICP staking calculator: https://networknervoussystem.com/.
There is a settings gear in the upper right hand corner that will dramatically alter the APR results. To get accurate estimates (as of June 4, 2021), change the % locked inside voting neurons to 25% and leave all of the other gear settings untouched. This will make the calculator match the quoted APR in this guide.
We don’t really know what rewards will look like over the next year or 5 years or 10 years. We do know the reward APR will come down as more people stake their ICP (a greater proportion of total ICP will be staked).
Check out the How Do I Stake My ICP article if you are looking to stake your ICP.
