Staking rewards are coming to the Algorand blockchain. Scheduled to go live in December after a consensus mechanism upgrade, ‘block rewards’ will start to be paid, in real-time, to validators successfully proposing blocks to the Layer-1 blockchain. The rewards begin at 10 ALGO per block and will decay by 1% every 1 million blocks. Validators will also receive 50% of the transaction fees of the blocks they successfully propose. More information about the staking rewards setup and mechanism can be found here.

Algorand’s staking program is unique in the industry. Rewards are paid out in real-time and, unlike the staking setups on Solana, Ethereum, and other chains, participants are not threatened by slashing nor subject to restrictive token lockups. Node runners continue to have full access to their funds at all times. Also in comparison to other popular currencies like ETH and SOL, Algorand’s staking rewards are not inflationary and don’t impact the total supply of ALGO.

"While staking on Algorand is highly inclusive, it's highly secure as well,” said John Woods, CTO of the Algorand Foundation. “Algorand uses advanced cryptography that makes it unnecessary to put user funds at risk of penalty or loss - their ALGO does not need to be delegated to other parties or locked-up to be used to secure the network."

“Any time we interact with a blockchain - whether it be through a dApp or an enterprise platform - that action is made possible because of the network running it,” said Staci Warden, CEO of the Algorand Foundation. “The nodes on the Algorand blockchain secure corporate supply chains, online credentials, and digital identities. They make it possible to send aid payments around the world, and to tokenize and exchange real-world assets, all in a decentralized system. The Algorand blockchain does not fail. The Algorand blockchain will never fork. And, now, Algorand will also offer inclusive, robust, and future-proofed staking.” 

The rollout of staking rewards marks the end of a banner year for the sustainable Algorand blockchain, including:

• Hitting its 2 billion transaction mark in July, driven in large part by the growing transactions of major projects and partners including ORA (159 million transactions in H1) and World Chess (57 million transactions in H1) as well as increasing DeFi and TradFi activity.
• A significant increase in the number of developers, according to Electric Capital.
• The migration of several startups and companies to Algorand from chains like Ethereum, such as Finboot and ZTLment, citing that developing blockchain products is 600% faster on Algorand than with Ethereum/EVM chains.  

Source : Blog by Algorand Foundation - Nov 11, 2024