Yes, rewards are compounded automatically. See the solution below for more info.
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Staking rewards on the Radix network
Explanation:
Radix network emits approximately 300M XRD per year over a 40 year period. If you are an XRD staker, you get a % of the 300M XRD for each epoch proportional to your % of the total stake.
After you completed your staking in the Radix Desktop Wallet, you start earning emissions rewards at the next epoch. The rewards you get for staking is autocompunded: you do not need to stake your new tokens in order to receive new rewards. Because emitted tokens are automatically staked, claiming rewards simply means unstaking some amount of staked tokens whenever you choose to do so.
Example:
Radix has an APY of approximately 10-15%. The APY varies from time to time, and it depens on the epoch lengths. At the time of writing, it is 13,82%. You can see the current APY here.
Let’s say you have 10,000 XRD and decide to stake it with a validator, who has 0% validator fee.
After the first year, you will have about 10,000 + (10,000 * 0.1382) = 11,382 XRD.
Since your XRD rewards (1382 XRD) were auto compounded from the first epoch, you will continue to earn rewards on your 11,382 XRD now.
After the second year, you will have 11,382 + (11,382 * 0.1382) = 12,955 XRD and so on.
If you would like to see it in a calculator, you can use the calculator on Radix home page.
The answer to this is question is YES.
WHY: Emission rewards (XRD) are automatically created in a staked state; they are emitted pre-staked to the same validator as the originally staked XRD and immediately begin earning emissions. This means that the holder does not need to continuously stake emitted tokens in order to “compound” their emissions earning.
HOW TO CLAIM REWARDS: Since emitted tokens are automatically staked, claiming rewards simply means unstaking some amount of staked tokens whenever the user chooses.
HOW TO CALCULATE YOUR AMOUNT: If you are an XRD staker, you get a % of the total emissions for each epoch proportional to your % of the total stake. This is reduced somewhat if the node you’re staking to is taking a fee, or if they are penalized for not participating fully in consensus for the epoch.
You can calculate your emissions as a staker as:
E x S x ( 100 - P ) x ( 100 - F )
where
E = This epoch’s total emissions XRD (fixed)
S = Your stake’s % of total delegated stake (for this epoch)
P = Penalty % for the node you’ve staked to (for this epoch)
F = Fee % for the node you’ve staked to (for this epoch)The emitted XRD for an epoch are first allocated across the validator node runners in proportion to the relative amount of stake delegated to them. If a validator node has, for example, 1% of the stake, then 1% of the epoch’s emissions tokens are initially allocated to that node.
COMPOUNDING TIME: The rewards compound approximately every 30 - 90 minutes (the length of an epoch), depending on how quickly “rounds” are produced by the network.
You can find more information about staking rewards and compound here.
I also recommend the “further reading” section of this FAQ article.
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