Computing Cardano Rewards

As delegators, we are excited to see rewards coming into our wallets every 5 days. These rewards are never the same though. This is because it relies on a number of factors which are always changing. You can use various calculators available online but they will also give you estimates and if they are not updated, they may give you erroneous information.

Thus, if you want to see a rough overview of how rewards are computed yourself, checkout this graphic that we made below:

Sample Cardano Rewards Calculation

This is an updated version of the one I posted recently on Reddit and Twitter. This new graphic has 2 major changes (1) It now reflects current rewards per epoch which is now nearer to 740ADA, and (2) It corrects the computation of margin which is applied only after the fixed fee is deducted from total rewards (thanks to SPROUT Pool for spotting this).

Note that the owner’s pledge is his delegation to his own pool and it is treated as such— just another delegation. Thus, the owner gets rewards both as an Operator and as a Delegator to his own pool.

Note also that the “reward per block” value is a constantly reducing value (it was 1000+ ADA last year). If you are reading this article a few weeks later, chances are this value has further reduced from 740 ADA. You can still use this chart by getting the current rewards per block from any block explorer. To do this, you can go to an explorer like Adapools.org, select any pool that has made a block recently, drill down to its rewards tab, and add the operator and delegator rewards to get the total rewards for that recent epoch. Now divide the total rewards by the number of blocks the pool minted in that epoch to get the current “reward per block” value. Use this number in the above computation and the results should still stand.

This sample computation is meant only to give you an idea on how rewards are computed. Therefore, whatever number you get is only an estimate. The actual rewards that you take home will depend on multiple other factors including the pool’s performance, current network parameters, pool saturation level, total stake delegated in the pool and luck in minting blocks.

Nevertheless, even if the final results are estimates, this should give you a bit more clarity on how your Cardano rewards are computed.

If you like this article, please consider delegating your ADA to WISH Pool. You will be earning interest rewards while indirectly helping the lives of disadvantaged children. This is because at WISH Pool, we pledge to give at least 10% of our own profit to educational charities so that successful students can help get their families out of poverty.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Create your website with WordPress.com
Get started
%d bloggers like this: