Hi all -
I’m planning on setting up a potential validator node for Cosmos, and am also participating in GOS.
While things seem very clear on most fronts, I’m still uncertain on a few variables that will determine whether this would make economic sense. Specifically, I’m trying to model the potential returns for being a validator.
Some of the variables are obvious: the total amount being staked, as well as the price of ATOM once the platform is live. For the stake of simplicity, I’m not adding in delegator rewards to this initial analysis.
My main confusion has to do with how often rewards accrue. I understand that the reward rate would be anywhere from about 7-20%, based on how many total ATOMs are being staked. That variable is easy enough to factor into the projections. However, it’s unclear to me over what time period this applies.
To use an example, let’s assume the following (disregarding variables like slashing and delegating rewards):
- My validator node has 1,000,000 ATOMS
- The prevailing reward rate is 10%
Upon successfully validating a block, how much would my validator earn? Clearly a 100,000 ATOM reward for one block is orders of magnitude too high. Does the percentage figure refer instead to a reward over a certain timeframe?
Has anyone modeled validator ROI? This is crucial, as the infrastructure investment is not trivial and reward projections are a key component of getting this thing off the ground.
Thanks in advance for your thoughts!