After all coins are minted as far as I know the rewards will come from the transactions fees. At the moment we have 4.5 to 6.0% annual return of staked ADAs. When and how this will change after we reach 45 000 000 000 coins in circulation?
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2 Answers
To start, all ADA does already exist and is accounted for, as seen in the Introduction section on page 4 of the Cardano ledger spec. The spec states that, from genesis, there was about 13,000,000,000 ADA locked up in reserves (monetary expansion), which are to be slowly released on a per epoch basis at a rate of decay that is defined by a network parameter, rho. With the current setting of 0.003, it should take over 100 years before these reserves are depleted.
How the APY will change after the reserves are depleted depends mainly on the transaction volume because transaction fees are what will pay the rewards after the reserves are depleted. The reserve depletion is so far out in the future that it is difficult to say how the APY will be effected when that happens.
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Are you sure about the current setting of 0.003? Is this "Influence factor (a0)" and "Expansion rate (% of reserves released per epoch)" which can be found under advanced settings here: cardano.org/calculator From this page I can see that this value is 0.3 not 0.003 for both of them. Commented Apr 29, 2021 at 16:00
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OK, this means that if 100% is 13 000 000 000 then after 333 epochs (1665 days or 4,5 years counting from mid 2020) all of these coins will be consumed if we assume that there is no additional income from the confirmation of the transactions right? I cannot understand why we have such a discrepancy 100 years vs. 4,5 years? Commented May 1, 2021 at 5:33
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1@PetarEnchev - according to this answer, the difference comes from the formula, which is a rate of decay, not a simple division of the starting amount: cardano.stackexchange.com/a/852/2107 It decelerates as it goes.– marcel_gCommented Oct 24, 2021 at 8:42
In ADA all coins are already minted. The total supply is 45 billion tokens. About 13 billion coins are not used and are "locked" in the treasury. It is used to be able to pay out the rewards for every block created by the stakepool and from where you will get delegators' awards. Because there not so many transactions to pay for, all the block awards the missing coins are used from the treasury. Once the transaction fees are sufficient to pay out all the block rewards, the treasury will only be used to fund proposals in what is now called Catalyst which in due time will start to solve the Voltaire stage. When Voltaire is ready it will be up to the community what to do with the rest of all ADA from Treasury. And this is a very interesting idea to vote the greedy out in favor of the Cardano Ecosystem to be sustainable.
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This is incorrect. The treasury is not used for block rewards. The 13 billion coins you reference are in the "reserves"– EGMSSECommented Jul 8, 2021 at 12:34