Why staking rewards change over time
When more people join a staking pool, the same daily reward is split into more shares, so your rate goes down. How it works, and why the rate is not fixed.
If your staking rate went down, it is almost always because more people joined the pool. Many staking pools hand out a set amount of new tokens each day, shared by everyone taking part. More people taking part means smaller shares, and a smaller share is a lower rate. Your own position did not change. The number of people sharing with you did.
This guide explains why that happens, why a pool cannot simply promise a fixed rate, and how to check the numbers yourself.
"My rate dropped. Why?"
It is the question every staker asks sooner or later. You put in the same amount, nothing about your plan changed, and yet the daily figure in the app is lower than it was a few months ago.
The answer is in where the rewards come from. In many staking systems, rewards are new tokens created by a smart contract on a schedule. The contract does not create a set amount for each person. It creates a set amount for everyone, and divides it.
A fixed pie, cut into more slices
Picture a pie of the same size baked every day. If four people share it, each gets a quarter. If eight people share it, each gets an eighth. The pie did not shrink. There are just more slices.
Staking rewards often work the same way. On Inkryptus, for example, the INKY staking pools share up to 10,000 INKY of new INKY a day. That amount is the pie, and everything staked in the pools decides how many slices it is cut into.
| Total INKY staked | New INKY that day | Average daily rate |
|---|---|---|
| 2,500,000 | 10,000 INKY | 0.40% |
| 5,000,000 | 10,000 INKY | 0.20% |
| 10,000,000 | 10,000 INKY | 0.10% |
Double the amount staked and the rate halves, because the amount being shared stays the same. Real pools also give longer commitments a larger share, so each plan pays its own rate.
Why not a fixed rate?
A fixed rate sounds simpler, so it is fair to ask why pools do not offer one.
To pay a fixed percentage to everyone, the contract would have to create more new tokens every time someone joins, with no limit. Take a fixed 0.25% a day. With 16,000,000 INKY staked, that would mean 40,000 new INKY every day, four times what the INKY pools share today.
New tokens are not free. Every one of them adds to the supply on the market, and more supply with the same demand pushes the price down. A staker on a fixed rate would collect a higher percentage of a token worth less, including the tokens they already held.
A daily ceiling, and a hard cap on the total supply, keep that growth predictable. Token supply explained covers why supply matters for a token's value.
Rate and value are two different things
The percentage tells you how many tokens you receive. It does not tell you what they are worth. What a reward is worth is the number of tokens multiplied by their price on the day you look.
Ten tokens of something losing value can be worth less than five tokens of something holding it. So when you compare staking options, look at both: how many tokens you receive, and how the supply of that token is controlled. A rate on its own tells you little.
What makes the rate go up or down
Because the daily amount is shared, the rate follows the total staked:
- More staked, lower rate. New people join, or people already in the pool add to their position.
- Less staked, higher rate. People withdraw from flexible plans, or fixed-term contracts reach the end of their term and the amount returns to its owner.
A rate that falls as a pool grows is not a sign that something is wrong. It is the rule working as written: the pool is sharing the same amount among more people.
How to check it yourself
You do not have to take a rate on trust. On Inkryptus:
- The INKY token page shows the supply, what has been created so far, and where the tokens are.
- The emission documentation sets out the daily ceiling and the formula, and why the daily rate changes, with worked examples.
- The staking contract is public on the blockchain, so anyone can read how much is staked and what it pays out.
For where the rewards come from in the first place, read Where do staking rewards come from?.
Frequently asked questions
Did my contract change when the rate went down?
No. Your amount, your plan and its terms stay the same. What changed is how many others share the same daily amount with you.
Will the rate go back up?
It can. When the total staked falls, for example as fixed-term contracts end, each share gets larger again. Nobody can promise when, or by how much.
Is a falling rate a bad sign?
Not by itself. A capped daily amount shared by more people produces exactly that. What matters is that the rules are public and the cap holds, which you can check on the blockchain.
Why is the APR not a fixed return?
Because the rate is variable. The APR is today's daily rate multiplied by 365, a reading of the moment rather than a promise. Staking rewards are variable and not guaranteed.
Investments in crypto assets involve risks, including price volatility, variable rewards, and risk of partial or total loss of the invested amount. Digital tokens are not legal tender. The rates and figures in this article are simplified examples, not a projection. This content is informational and does not constitute investment advice.