Staking yield versus a price drop: what the reward is worth after the fall
A staking reward is paid in coins. A price drop is paid in dollars. Put both on the same coins and see which one wins.
How it works: the reward is paid in more coins, not in dollars. Coins earned = coins staked × rate × months ÷ 12. No compounding, to keep it plain. Your coins and the new coins are then valued at the lower price. The break-even drop is the drop where the new coins exactly cancel the lost value. The rate is the one you were quoted. Type your own.
The reward and the price are two different numbers
A 5% reward sounds like $200 on $4,000. It is 0.1 coin. If each coin falls 20%, that 0.1 coin is worth less than it was on day one. Every coin you hold falls with it, the old ones and the new ones. In the default, the reward adds $160 and the price drop takes $800.
The reward only wins when the price falls less than the break-even drop shown above. Read crypto staking, explained and staking versus lending for how the reward is paid.
The usual mix-up
A reward rate is a count of coins. A price is dollars per coin. They do not cancel each other. A coin that earns 5% a year and loses 20% in the same year ends the year with fewer dollars. See staking for the plain meaning.
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