🎲Algorand SRB

Algorand Staking Rewards Rate (ALGOSRB™) Methodology

ALGOSRB is a benchmark that represents the rewards for each governance period.

ALGOSRB is calculated and published by Staking Rewards via the Algorand Profile and Staking Data API.

$$ALGOSRB = rp / st(t_d * t_y ) / rc$$

Formula key	Metric name	Description
rp	Reward Pool	The Reward Pool in Algorand's Governance Period #8 consists of 42,000,000,000 ALGO that are yet to be distributed to stakers. This pool is divided into two parts: 24,500,000,000 ALGO reserved for non-DeFi participants and 17,500,000,000 ALGO reserved for DeFi participants.
st	Staked Tokens	The total number of ALGO tokens bonded ithe Governance Period.
rc	Reward Cycle	In each Reward Cycle in Algorand's Governance, stakers can participate in voting sessions and are eligible to receive their share of the 42,000,000,000 ALGO Reward Pool.
$t_d$	Day Constant	86400s
$t_y$	Year Constant	365d

• ALGOSRB takes into account all accumulated rewards for the last Governance Period

• ALGOSRB operates on a non-compounded basis, meaning it excludes returns generated from the reinvestment of rewards.

Governance Period

• A Governance Period in Algorand is a specific time frame during which registered governors can participate in voting sessions to influence the platform's direction and policies. During this time governors vote on various topics and be eligible for rewards from a designated ALGO pool.

• The rewards can be claimed at the end of the 90d Governance Period

Observation Period:

1. The ALGOSRB is determined based on the current reward cycle at the point of evaluation.

2. This data is then annualized for a comprehensive year-long projection.

Calculation

The calculation happens every 2 hours and is immediately published via Staking Data API.

Limitations

1. At the beginning of each governance period, all staked tokens will be reset to 0, resulting in a high APR during the initial cycle.

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ALGO Real Reward Rate (ALGOSRB^R)

The real reward rate calculates the ALGOSRB adjusted for inflation in the network.

$$ALGOSRB^R = 1+ALGOSRB /(1+i)-1$$

Formula key	Metric name	Description
i	Inflation Rate	The Inflation Rate in Algorand is calculated based on the reward distribution for each governance period.

Inflation Rate Behaviour

The inflation rate of Algorand can be influenced by governance decisions, which can result in a positive or negative change. The emission of new ALGO tokens during the next cycle can affect the inflation rate, causing it to either increase or decrease.

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Other ALGO metrics calculated by Staking Rewards:

Metric	Description
Rewards per Year	The Rewards Per Year refers to the amount of rewards given to delegates in USD on an annual basis.

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Data Sources:

• Staking Rewards from indexed Algorand Blocks and RPC Endpoints

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References:

• Algorand Whitepaper

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Last updated on 05/23/2024