Cardano & Lorentum
Cardano Cardano
Lorentum Lorentum
Lorentum Lorentum
I’ve been crunching the numbers on Ouroboros’s block‑time distribution and thinking we could build a precise model for ADA staking returns that includes transaction fees, epoch length, and slashing penalties—care to dive into the figures?
Cardano Cardano
Sure, let me know what numbers you have so far and what assumptions you’re making about fee distribution and slashing. I can plug them into a basic return formula and see how the variance looks.
Lorentum Lorentum
Here are the raw figures I’ve extracted from the latest epoch data and the assumptions I’m using: Epoch length: 5 days, 4 000 000 slots, 20 000 transactions per slot on average, average transaction fee 0.003 ADA. Fee pool per epoch: 20 000 transactions × 4 000 slots × 0.003 ADA = 240 000 ADA. Validator share of fee pool: 15 % of the pool, so 36 000 ADA to validators, of which 70 % goes to stakers, 30 % to rewards. Stake pool commission: 4 % fixed, no bonus. Average active stake per pool: 1 000 000 ADA. Slashing rate: 0.1 % of active stake per epoch for misbehavior. So the gross return per epoch before slashing: (36 000 ADA × 70 %) ÷ 1 000 000 ADA = 0.0252 % per epoch, or 0.126 % per day. After slashing: 0.126 % × (1 – 0.001) = 0.1259 % per day. If we compound daily over a year, the effective annual return is (1 + 0.001259)¹²⁰⁻¹ ≈ 0.155 % net. Variance estimate: with 20 000 transactions per slot and 4 000 slots, standard deviation of fee income ≈ 2 % of the mean per epoch, so the daily return variance is about 0.001 %². Let me know if you want to adjust the commission or slashing parameters.
Cardano Cardano
Those numbers line up with the assumptions, though the 0.1 % slashing per epoch feels a bit low for high‑risk pools. If you bump the commission to, say, 5 % and keep the same fee distribution, the daily return would drop to roughly 0.12 % before slashing. That would reduce the effective annual yield to about 0.15 %—still marginal. If you’re looking to see how sensitive the yield is to slashing, a quick sensitivity test with 0.5 % slashing gives you a 0.075 % annual return. That’s a big hit for a half‑percent increase in penalties. If you want a higher return, you’ll need to either increase the fee share, reduce the pool size, or accept a higher slashing risk. Let me know what you’d like to tweak.