The Hedera blog seems a little ambiguous in regards to

Question

The Hedera blog seems a little ambiguous in regards to

the “reward rate” for staking. In the description of Phase 3, it states “the council (through CoinCom) will vote to update the reward rate, and subsequently, the mainnet will be updated with the agreed-upon reward rate.” This implies that (at least initially) the reward rate will be fixed at a certain percentage voted and agreed upon by CoinCom.
However, later in the blog it states “The actual reward rate will vary depending on how many hbars are staked for rewards”.
Could someone clarify what the definition for “reward rate” is? If it’s a fixed number of HBARs per day (similar to Stader rewards) then I could see how a fixed “reward rate” in HBAR could result in a variable APY. If that’s not the case then I’m definitely confused🤔

#cryptocurrency #english #hbar

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21.07.2022

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Joe

Jeeptopdown
Obviously lots of moving parts - especially at lau...

I think what will happen as a result of what you’re describing is staking should eventually bring a kind of price stabilizing force. The higher the price of ħ, the lower the % return due to transaction fee revenue, and the lower the price of ħ goes, the higher the % return. If ħ gets cheap, you know you can buy it and get a good return. If it gets expensive you will want to sell some to move your capital to an investment that pays out a higher return. Seems like it’d be a stabilizer and would also mean one day transaction revenue will probably have a strong correlation with price as well.

0

21.07.2022

Jeeptopdown · Accepted Answer

Obviously lots of moving parts - especially at launch. Short to medium term I’m sure they’ll have a formula looking at how many coins are actively participating in staking vs fee revenue coming in + reward subsidies and come up with a return percent that will be relatively fixed. But here’s my question long term. Fees are paid in HBAR but pegged to USD so as HBAR price increases, the number of HBAR paid in rewards should decrease, right? Then as txs increase the fee paid will increase. So it will always (hopefully) be a catch up game of increase in HBAR price resulting in less HBAR rewards until subsequent increases in txs fuel higher USD based returns resulting in increased HBAR rewards. Does that make sense at all???

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The Hedera blog seems a little ambiguous in regards to

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