Algorand Rewards FAQ
What are Algo Rewards and how do I earn them?
The Algorand protocol itself ensures that every account that holds 1 Algo or more is eligible to earn rewards. You don't need to enroll in anything or sign up for this program. You automatically earn rewards just by holding Algos in your Algorand Wallet!
Note: The Algorand Wallet does not impact Algo rewards in any way, it simply reflects how the protocol distributes them.
What's the Algo reward rate?
The reward rate is set by the Algorand Foundation and more detail about the Algo dynamics can be found here. Given the details from the Algorand Foundation, at the time of writing, an account that is holding 1 Million Algos would generate about 70,000 Algos per year in rewards with an effective rewards rate of ~7%. This rate is not guaranteed as these numbers will change over time as the rewards schedule changes, the total supply grows, and transaction fees increase/decrease.
Why is the Algo reward yield different on Coinbase and Binance and Algorand?
The Algorand wallet is non-custodial and all rewards earned accrue directly to the user. Binance, Coinbase, and other exchanges offer custodial services, thus they can distribute the rewards to their users as per their terms and conditions. They receive staking rewards like any other Algorand address holding at least 1 Algo. Please refer to the terms and conditions on the exchange's website.
Is compounding rewards automatic? How can I compound my rewards?
While Algorand rewards are computed and distributed by the protocol automatically, they are not compounded. Compounding is achieved whenever your account sends or receives Algos. You can trigger compounding yourself by sending a zero Algo payment transaction to or from your target address. This transaction will trigger the commit of all accrued rewards and record them to the on-chain balance of the account.
I just claimed my rewards, why didn't my balance change?
While the Algorand Wallet displays your Algo balance and a Rewards balance separately, the Algo balance already includes those rewards. They are represented separately because although they are available to spend at any time, technically, the rewards are not claimed until your address is involved in a transaction. Therefore, after sending or receiving a transaction, you should notice the Rewards balance go to zero, but your Algo balance already reflects this change.
If my account is backed by a Ledger Nano X, can I still receive rewards?
Yes! You automatically earn rewards for Algos held on your personal Ledger accounts.