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Staking Rewards

This guide explains how staking rewards are calculated and distributed on Monolythium.

Reward Sources​

Stakers earn from two sources:

SourceDescriptionDistribution
InflationNewly minted LYTHProportional to stake weight
Transaction Fees10% of all feesTo block proposer (via quadratic selection)

Combined, these form the total staking yield.

Inflation Rewards​

Monolythium uses a fixed 8% annual inflation rate from genesis. New LYTH is minted each block and distributed to stakers:

ParameterValue
Inflation rate8% annually
Annual mint (at 514M supply)~41,120,000 LYTH
Per-block mint (2s blocks)~2.61 LYTH

Inflation rewards are distributed proportionally by stake weight — standard Cosmos SDK distribution.

Per-Block Calculation​

Block Reward = (Annual Inflation × Total Supply) / Blocks Per Year

At 2-second blocks (15,768,000 blocks/year):

  • ~2.61 LYTH per block at 514M supply

Fee Rewards​

Transaction fees are split by the x/mono module:

  • 90% burned (deflationary)
  • 10% sent directly to the block proposer

Fee rewards are distributed to whoever proposes the block. Thanks to LythiumBFT's quadratic proposer selection, block proposals are spread more equitably — a validator with 4x the stake only proposes 2x as often, meaning smaller validators receive a proportionally larger share of fee rewards.

Reward Distribution​

Validator vs Delegator​

Block Reward
    │
    └── To Validator (proportional to stake weight)
            │
            ├── Commission (e.g., 10%)
            │       └── Kept by validator
            │
            └── Remainder (e.g., 90%)
                    └── Distributed to delegators

If you delegate 1,000 LYTH to a validator with 10% commission:

  1. Your share of rewards is calculated proportionally
  2. Validator takes 10% commission
  3. You receive remaining 90%

Commission Impact​

Validator CommissionYour Effective Yield
0%Full staking APY
5%95% of staking APY
10%90% of staking APY
20%80% of staking APY

Calculating Your Rewards​

Estimated APY​

Your APY ≈ (Inflation Rate / Stake Ratio) × (1 - Validator Commission)

Rough estimates (8% inflation):

ScenarioApproximate APR
50% staked, 10% commission~14.4%
70% staked, 10% commission~10.3%
50% staked, 5% commission~15.2%

Actual returns vary based on network conditions and fee revenue.

Query Your Rewards​

# Check accumulated rewards
monod query distribution rewards <your-address> <validator-address>

# Check all rewards across validators
monod query distribution rewards <your-address>

Claiming Rewards​

Rewards accumulate and must be claimed manually:

# Claim from one validator
monod tx distribution withdraw-rewards <validator-address> \
  --from <your-key> \
  --chain-id <chain-id>

# Claim from all validators
monod tx distribution withdraw-all-rewards \
  --from <your-key> \
  --chain-id <chain-id>

!!! tip "Gas Costs" Claiming from multiple validators in one transaction is more gas-efficient than separate claims.

Compounding​

Rewards don't automatically compound. To maximize returns:

  1. Claim rewards periodically
  2. Re-delegate claimed rewards
  3. Repeat

Compounding Frequency​

More frequent compounding = higher effective APY, but:

  • Each claim costs gas
  • Balance claim frequency with gas costs
  • Monthly or weekly claiming is typical

Reward Timing​

EventTiming
Reward accrualEvery block (~2 seconds)
Available to claimImmediately
Auto-compoundNot supported (manual claim required)

Slashing Impact on Rewards​

If your validator is slashed:

  • Your delegated stake is reduced
  • Future rewards are based on reduced stake
  • Accumulated unclaimed rewards are NOT slashed

Tax Considerations​

!!! warning "Consult a Tax Professional" Staking rewards may be taxable income in your jurisdiction. Keep records of:

  • Claim transactions
  • Reward amounts
  • Claim dates
  • Token prices at claim time

FAQ​

When do rewards start?

Inflation rewards start from genesis (block 0). There is no delay — 8% inflation is active from the first block.

Why aren't my rewards showing?

Rewards must accumulate. Check after several blocks, and ensure you're delegated to an active validator.

Can I lose unclaimed rewards?

No. Unclaimed rewards remain available indefinitely. However, if you undelegate, claim rewards first.

Do inactive validators earn rewards?

No. Only validators in the active set (top 53 by stake) earn block rewards.

What's the difference between APY and APR?

  • APR: Simple annual return without compounding
  • APY: Effective return with compounding

Displayed rates typically show APR. Your actual APY depends on compounding frequency.