Rewards and Fees¶
Staking rewards are automatically compounded when ATOM is liquid staked through the pSTAKE protocol. Validators take their cut from rewards as they do in traditional staking before rewards are distributed to users. The rewards are split into two parts:
- 95% goes to stkATOM holders: This happens in the form of stkATOM appreciation overtime through staking and auto compounding as their respective shares keep on increasing due to increase in the stkATOM/ATOM exchange rate.
- 5% goes to the protocol: This 5% fee is charged on auto compounding of rewards (not on any other steps like staking, unstaking or claim). The protocol fees are managed by an on-chain proposal, the fees are targeted towards the development activities like hackathons, grants, bug bounties etc. to support long term growth of the pSTAKE ecosystem.
There is also a nominal charge (0.5%) for the Redeem Instantly feature.
In addition, there may be transaction fees as with any other transactions that occur on Cosmos and Persistence chains. For staking and unstaking transactions, ATOM is transferred between Cosmos and Persistence chains via IBC, and this may incur a nominal transaction fee in ATOM (on the order of 0.01 ATOM). Similarly, a nominal fee in XPRT may be required for the staking transaction to be completed after the deposited ATOM is present on the Persistence chain.