Introducing the Staking Score
Cryptoassets on Staking Rewards are ranked by our very own Scoring System.
We have recently updated our Scoring and Rating System from the ground up to reflect live changes in network and reward metrics more accurately.
The Staking Score is designed to dynamically rank assets based on certain metrics we consider important by evaluating their attractiveness to invest and stake. This is a result of our two year-long research of 100+ coins and their reward economics.
Reward Options and Rates
Each asset listed on Staking Rewards has at least one reward option. Many have multiple options to choose from such as Independently running a Staking Node or just delegating staking rights to a Node Operator/Provider.
Each Reward Option has unique metrics that are considered for the Rating:
- The annualized (non-compounded) Reward Rate where a higher reward improves the rating.
- The annualized (non-compounded) Reward Rate adjusted for Network Inflation whereas a higher adj. Reward improves the rating.
- The Lock-Up Period / Unstaking Period whereas a longer period diminishes the rating.
- The Minimum required Token Amount to participate whereas a higher USD value diminishes the rating.
- The Frequency with which rewards are distributed by the network or providers based on an investment equivalent of $1000.
- The Complexity to setup and maintain this reward option measured by a rating from our dedicated research team based on pre-defined criteria.
- The Risk that tokens are slashed or compromised measured by a rating from our dedicated research team based on pre-defined criteria.
Since we are selecting the most used reward option as default, we do consider the values of this option with a higher weight into the rating.
Total Staked (Network Security)
Additionally, we consider the Total Staked Percentage Rate from the Total Network Supply that is eligible for staking. Since a higher participation rate indicates health and security within the Network, it results in a higher Rating.
Ecosystem and Providers
Staking Providers often lower the friction for users to participate in securing the network via staking. A higher number of Providers available for the asset improves the rating whereas non-custodial providers have a higher weight.
Stability of Rewards
Investors naturally care a lot about the prediction of their rewards for the coming year. With our proprietary formulas we believe to provide reasonable estimates on the up-coming rewards. Anyhow some networks do have highly volatile blockchain metrics that diminish an accurate prediction. To account for possible overstatements in reward rates we do consider the stability of rewards into our rating as well. A stable reward improves the rating where an increasing reward diminishes the rating slightly and a decreasing reward diminishes the rating rather significantly.
Meta Project Score
Furthermore, we include a meta score of third party rating agencies with dedicated scores for Core Teams Expertise, Ecosystem Size and Growth, Community Engagement, Decentralization, Funding and technical expert opinions. We will disclose more information about this Meta Score soon in a separate announcement.
Under optimal conditions a Cryptoasset might be able to score for a full 100% based on the above criteria.
Daily Network Rewards
As a bonus for the assets where we have access to the amount of transaction fees spent within the network we are considering the Ratio between Network Rewards (Transaction Fees) and Inflation Rewards (Block Rewards). From a certain threshold upwards we lift up the rating for the assets where a significant amount of the rewards is derived from within the network and it’s usage.
Most networks are targeting a certain reward rate to encourage participation and thus improve the security of the Network. With a higher Network Rewards Ratio, it would allow a possible readjustment of Inflation Rewards on the protocol level to prevent token holders from being diluted.
Important Disclaimer: The ranking and Score does NOT give any buy, sell or hold recommendation. It is to be seen as our personal opinion. Even though the ranking is updated in real-time based on pre-defined criteria, we do not endorse any asset ever.
If you have any questions or suggestions which additional metrics we should consider for the rating, please feel free to reach out to us now.