THETA Staking Reward Distribution Algorithm Explained

PLEASE NOTE **

There was a change to the THETA Staking reward distribution code on March 10th 2021 by Theta labs. With the new update you will be getting them randomly. How randomly depends & is weighted to how large your Theta stake is.

Here is the link to the official Theta Labs medium article outlining the changes, https://medium.com/theta-network/theta-protocol-code-v2-2-0-released-with-important-performance-related-updates-6b9e2261d0ae

There is more information on the waiting period in this article from Theta Labs that came out June 4th, 2021. https://medium.com/theta-network/theta-1-click-delegated-staking-now-live-in-the-theta-web-wallet-b80d499aae71

An excerpt from the article above.

“TFUEL staking rewards are probabilistic (randomly earned by stake-weighted probability), and for stakers under 50,000 THETA it can sometimes take days or weeks to earn a reward, which is normal”.

Here is the link to the new Randomized Reward code in the Theta blockchain source code.

https://github.com/thetatoken/theta-protocol-ledger/blob/master/ledger/execution/tx_coinbase.go#L536

Important to note, GPooL does not pay people, rather the THETA Blockchain does, using its reward distribution algorithm. The blockchain looks at all the source addresses that are pointing their stake to our Guardian Node (GN) (Holder address) & applies the new algorithm, to find the distribution schedule. Each Source address staked (your staking wallet: address) is looked at & a weight of stake taken into account by the algorithm. The random nature of it is something to get used to. GPooL has no control over the payouts, it’s the Theta Labs code that governs payouts.

Theta added this new way of distribution to save space on the blockchain for transactions. The old method of paying every single staker, every time, was beginning to fill too much block space. This new algorithm was designed in such a way that rewards even out over time. Theta Labs does still have some optimizing to do to this new method. We have summited 2 potential changes, that could help make the rewards everyone gets much more consistent. We do hope that the optimization of this new reward distribution code continues to be a priority.

Every ~12 mins the THETA blockchain, using the algorithm picks 400 stakers to reward 12 TFuel to. Depending on how much THETA you have staked some could be picked more than once. If you have 1,000 THETA staked your odds of being picked are significantly lower than a 100,000 THETA stake. Reward frequency is much higher for higher threshold stakes. At time of writing (21th July 2021) THETA has over 18,000 stakers. There are only 200–300 picked, to get their amount of the 400 portions of 12 TFUEL. This is done every ~12 mins based on randomness & how much they have staked. This is why lower threshold stakes can have long dry spells with no rewards.

Another thing to note, with the new algorithm, two identical THETA stakes can have variance in the returns earned for the same staking period of time. This is the random nature inherent in the new reward distribution algorithm. Reward cycles are constantly changing. So expect changes in the amount of TFUEL earned between different earning cycles.

Coming soon… Our Deep Dive THETA Staking Reward Distribution Algorithm Explained Video.

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