Rewards and Fees¶
Staking rewards on ETH staked through pSTAKE are split into three parts:
- 90% goes to stkETH holders in the form of stkETH value appreciation: stkETH holders own a share of a larger pool of ETH due to the increase in the stkETH/ETH exchange-rate.
- 5% goes to validators to cover their operating expenses. At the end of every epoch, when the rewards are reported by the Oracle, the protocol mints 5% of the ETH rewards in stkETH and deposits them into the validator pool. E.g.: If the epoch rewards are 1ETH, the protocol will mint stkETH worth 0.05ETH into the validator pool.
- 5% goes to the protocol. The protocol fees is managed by a multisig, and is targeted towards developmental activities like hackathons, grants, bug bounties, etc. to support long-term growth of the pSTAKE ecosystem.
The fees distribution can be amended through pSTAKE Governance.