How much rewards from staking and voting

Jupiter DAO ASR
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Let me break down the ASR and how it’s potentially going to look like in the future. I have also made a spreadsheet for myself and I can consider making it public if you guys think it helps with understanding the ASR.

I hope as many of you as possible become winners in this market.

NOTE.
This model can’t give accurate numbers for the future but it uses the current data available to give an estimate. Nothing in this post is financial advice and I’m not financial advisor.

Numbers now: 03.11.2024

ASR - 50M
Circulation - 1350M
Staked JUP - 442M
Staked JUP used for voting - 361M
Staked JUP from circulating supply - 32,7%
Staked JUP used for voting - 81,7%

Numbers after jupuary:

Circulation - 2050M
Staked JUP - 671M (assuming 32,7% of jupuary goes into staking)
Staked JUP used for voting - 548M (assuming 81,7% of staked JUP keeps voting)

ASR reward per quarter:

2024
ASR 1 - 22,00% (this may be little off but it was around that)
ASR 2 - 18,19%
ASR 3 - 13,86% (we’ve had only 1 vote but it’s gonna be around that, most likely little less)

We can see a decrease of 17,32% in ASR between ASR1 and ASR2, and 23,80% decrease between ASR2 and ASR 3. Thus the trend is down with an average decrease of 20,56%.

As we know the average decrease in ASR % per quarter and the potential impact of jupuary for ASR, we can model how the ASR can look like in the future.

2025
ASR 1 - 7,25%
ASR 2 - 5,76%
ASR 3 - 4,58%
ASR 4 - 3,63%

Screenshot 2024-11-02 at 15.32.53
Screenshot 2024-11-02 at 15.32.531190×726 26.1 KB

ASR 1 - 3 are for 2024 and the next ASR 1 - 4 are for 2025.

We can then calculate the compounding return for the whole of 2025, which is 22,93% but as there are variables and unknowns, let’s call it somewhere between 20-25% with some margin of error.

Other factors to consider are the length of market cycle, how much time we have before the next bull market top and what these cycles mean for an altcoin. High APY doesn’t cover the loss of value of your staked JUP. Most altcoins suffer more than 90% drop from the top of the bull to bottom of the bear and most altcoins will not see a new all time high on next bull market.

Here are snapshots from the previous 2 bull market tops to demonstrate which projects were on the top 100 but are not there anymore. Or how few projects have gone to new ATH cycle to cycle. Generally speaking it’s better to exit and re-enter during bull / bear cycles compared to hodling for years. The parabolic phase lasts rather weeks than months and while your JUP is locked for 30 days, it makes it considerably harder to exit your locked JUP position increasing the risks compared to assets which are not locked.

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Nice one Miuq. Thanks for taking your time to do this🙏🏿

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Good data analysis @miuq and interesting study!

IMO 22,93% compounding return would still be worth it for me compared to 8% - 10% SOL staking for example.

I am thinking it will still be a bit higher assuming the amount of stakers doesn’t continue to increase that exponentially. I think the first year of adoption of a new network always sees the greatest exponential inflow, but the growth afterwards tends to flattens down a bit. Bitcoin and Bitcoin mining is an example for that, showing how Satoshi was able to mine 1 Million BTC and now it’s even hard to mine 1 BTC. The curve tends to flatten.

I have to disagree with some underlying assumptions here. If JUP goes to $10 USD ATH at the peek of this bull market for example, you probably won’t hear anyone complain who get’s in now around $1 USD. People can then decide for themselves if and how much they want to round-trip and HODL despite the unknown future market conditions, but all of this seems a bit too speculative to tie it into APY directly.

Overall interesting and I will definitely get back to this post in the future to use it for my personal JUP Staking APY predictions. Thanks for this community contribution!

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Sure thing, I have pretty strong conviction about the market cycles but that’s another representation. Majority will lose money in the crypto market and to improve the odds of becoming a winner, on top of APY you have to understand the big picture and context. If I say that voters already get 45% APY + 15,9% from jupuary, it looks better than it actually is for someone who doesn’t understand the bigger picture. Thus breaking down ASR and related matters.

At least I can counter argue now. :wink:

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This is how it would look like for someone who stakes 100 JUP in the beginning of 2025. To achieve 20-25% APY (with margin of error), one has to keep the assets locked for the whole year, including all ASR received, and vote all proposals during the whole year. Unstaking any JUP or missing a vote would significantly lower the APY, especially if that’d happen early in the year.

Time JUP holdings ASR reward .
START 100 JUP 0
ASR 1 107 JUP + 7 JUP
ASR 2 113 JUP + 6 JUP
ASR 3 119 JUP + 6 JUP
ASR 4 123 JUP + 4 JUP

In my opinion, the reward is decent but there are probably better yiels available for similar risk. That being said, it’s a viable option if you decide to hodl JUP anyway. Same as if you decide to hodl ETH or SOL, you may as well stake at least portion of it for some extra.

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@miuq wouldn’t the rewards be higher when you perform all votes? Because the rewards from the many people who don’t vote go to the people who do vote, giving the 100% voters more voting power relative to their amount staked - resulting in a higher APY reward from the ASR.

Or did you already include this factor into your calculations with the ‘‘Staked JUP used for voting - 81,7%’’?

Also important to note is that when talking about ASR in the context of Jupuary round #2, we have to consider that ASR was rewarding stakers with 45%+ APY. The reason for this is that Jupuary round #2 is roughly November 2023 - November 2024 where the APY of ASR was well above 45%. But I know that that’s not the point of this post, so it’s more of a sidenote.

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You’re absolutely correct, the rewards could indeed be higher for those who participate in all votes. When only a portion of stakers vote, the rewards pool is divided among fewer participants, meaning active voters receive a larger share relative to their staked amount, effectively increasing their APY from ASR. The “Staked JUP used for voting - 81.7%” figure does capture the current percentage of staked JUP that’s being used for voting, but it’s an average that might fluctuate as participation changes. So, consistently voting could indeed maximize individual returns within this structure.

Regarding the ASR for Jupuary round #2, it’s worth noting that ASR did offer high APY, reaching over 45% due to favorable conditions and active participation in the reward structure. This is a key historical insight but, as you pointed out, the current model is looking ahead with an estimated decline based on recent trends, rather than revisiting that period specifically. Thanks for the valuable context!

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The percentages introduced here… :point_down:

…are numbers you’ve got if you have voted on all proposals and if you have not unstaked any amount or added more to your stake. Therefore it already includes the “extra” which people have got voting on all proposals and is thus baked in the formula. The model assumes that the ratio of people who vote all proposals vs people who doesn’t, stays the same.

This model is linear and as you said, the curve will flatten out but I have therefore added the “margin of error” to the message. There are also variables such as, if jupuary gives decent allocation for voters, it encourages new people to stake their JUP and dilute the ASR further or if jupuary doesn’t reward voters, people are more likely to unstake etc. But it would get very complex trying to take more factors in to consideration.

We could think about this as pointing a flash light to the wall in the dark. The center is the brightest and light gradually decreases towards the edges. We are more likely to hit the range which is brighter and less likely where the light is less. This model points the flashlight towards 22,93%. When we say that APY is 45%, we are using a laser pointer and pointing it in wrong angle as the current APY of 45% takes consideration only this current moment and not the change what most likely occur during the year.

As we get more data over time, we can predict the range with more certainty. There are of course also other factors which can change the angle of the flashlight, such as market conditions, team introducing more incentives to stake (maybe rewarding voters with jupuary or adding more JUP into ASR pool at some point), maybe a black swan etc.

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@TabiZzFR sorry I forgot to tag you on the post above, but that should reply to you as well.

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Great post.

How did you consider the effect of 700mil tokens diluting ASR too? There might be a more significant drop in APY post Jupanuary. Estimate would be a ((0.42b/1.35b)*700mil) = 218mil added stake post Jupanuary, bringing total staked to 660mil.

660mil * 81.7% (Staked JUP used for voting) = 540mil
(50mil/540mil)= 0.0925
9.26% APY for ASR 1 2025

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Great analysis Miuq.
Would be interesting to see the research you have done on your spreadsheet!

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:point_up_2: on top of this, I’ve also counted the general trend down to be part of the equation. :point_down:

So 9,26% APY * 0,7944 = :point_down:

Our numbers differ slightly, prolly due to rounding but that should answer your question.

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