Staking APR To Increase By 3% Across Klaytn Ecosystem

TL;DR

• The result of a KLAY unstaking initiative by key GC members.
• Ongoing discussions exploring various ways to further incentivize network participation.

As previously announced in 3Q, select members of the Klaytn Governance Council (GC) took the initiative to unstake a significant portion of their validator rewards from each respective node, resulting in a 3% increase to the overall Klaytn ecosystem staking APR for the wider community. 

Unstaking Rewards, Increasing APR for the Community

Currently 50% of all block rewards are used to incentivize node operation (GC Core Cell Operators), amounting to approximately 3.2 KLAY per block or 100 million KLAY annually. Node operators are rewarded respectively in proportion to the amount of staked KLAY on the node. As the total amount of KLAY staked on nodes is reduced, the reward rate for each KLAY staked increases.

(Average staking APR = Total node block rewards (100 million KLAY per year) / Total amount staked on nodes)

TL;DR, The average staking APR will see an increase as the total amount of KLAY staked by GC members on nodes, decreases.

The participating GC members included Kakao, Kakao Entertainment and Ground X, with over 400 million* KLAY rewards being unstaked in late August from each of their respective nodes, leaving just 1.1 billion left staked – a decrease of 0.5 billion. This resulted in the 3% APR increase.  

Breakdown of KLAY Unstaked from Nodes

• Kakao: 275,714,185 KLAY (on August 30) 

• Ground X: 91,961,539 KLAY (on August 31)

• Kakao Entertainment: 56,666,665 (on September 7)

Additionally, the Klaytn Team and the Governance Council are actively discussing other value-add options for the community, to further incentivize community network participation. One such option being explored is to allow the community to stake their KLAY directly with GC nodes of their choice, providing wider community access to protocol-level staking rewards.

The Klaytn Team, together with the Governance Council will continue cooperating on establishing more avenues for incentives at a protocol level, in order to continuously grow organic, community network participation.

[3Q Klaytn Ecosystem Update]
The 3Q Klaytn ecosystem updates will cover key initiatives the Klaytn team is currently undertaking in our continued efforts to achieve an optimal and sustainable Klaytn ecosystem.