Where comes the LikeCoin rewards?

LikeCoin rewards from staking is definitely not the same as interests from deposit

This article reflects the numbers as of January 31, 2022. All parameters can be changed in the future through the governance mechanism, such as Proposal 7.

By delegating LikeCoin, you can earn rewards. This article explains where the LikeCoin rewards come from. Delegation generates rewards as each delegator helps to validate transactions.

The validator's rewards for recording all transactions come from inflation, which is currently set at 7-20% of the 1.8 billion LikeCoin issued so far, equating to 76.5 million-265 million LikeCoin per year.

The inflation amount is distributed when a block is created in the LikeCoin chain, which occurs approximately every 5-6 seconds.

2% of the newly minted LikeCoin from inflation is reserved for the Community Pool and treated as "Tax." In other words, 98% of the LikeCoin from inflation goes to validators and stakeholders. The usage of the Community Pool is determined by the community's autonomous mechanisms.

If a block is created every 6 seconds, the number of new blocks created per year is 3652460*10 = 5,256,000. Therefore, the LikeCoin shared to each validator and stakeholder from each block is:

= 10,000,000 LikeCoin x 98% / 5,256,000

= 47.7 LikeCoin

This means that 47.7 LikeCoin is minted every 6 seconds for validators and stakeholders to distribute according to their delegation ratio. If the commission rate of a validator is 10%, the LikeCoin given to stakeholders every 6 seconds will be 47.7 x (100%-10%) = 42.93 LIKE.

The above calculation is based on the assumption that a new block is created every 6 seconds, but in reality, there may be deviations. In addition to the 98% from inflation, 98% of the transaction fee from each transaction will also be distributed to validators and stakeholders according to their delegation ratio.

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