PSA: Understanding how dividends are paid out it

I posted this in the unofficial reddit community, thought I’d crosspost here as it may be useful to some people.

I’ve been seeing some confusion over the potential earnings through staking among the community, and I think it’s important for people to not blindly stake their NEX without knowing how it actually works. I’ve noticed some people believe the total amount of staked NEX impacts how much they receive from dividend payouts. The amount of staked NEX worldwide has no impact on your own dividend earnings.

This is the formula Nash uses to calculate dividends:

Revenue * (your staked NEX / 50,000,000 NEX) * stake rate

Let’s break this down into its 4 parts.

  • Revenue

It appears as though dividends will be paid daily in the form of each asset traded throughout the platform. Nash takes fees from Takers (Maker trades are 0% fees). As an example, if a Taker trades NEO for ETH, Nash will take a fee in NEO. This fee in NEO will then eventually be split up as dividends to all those who are staking (the NEO fee counts towards revenue in the formula). Those who have staked more NEX and for a longer period of time, will receive a larger share of this fee. Of course, some of that fee will go to Nash as well.

  • your staked NEX

Simple. This is how many NEX you have staked in the smart contract. The higher this number, the bigger your dividends will be. It makes no difference whether you stake every NEX you own, or split it up into smaller chunks – the formula will return the same value. For example, 1,000 NEX staked five times is the same as one stake of 5,000 NEX. This example assumes you are not changing the length of time staked.

  • 50,000,000 NEX

Total supply of NEX. This is a static value and does not ever change.

  • stake rate

Most of you can see all these values on the exchange itself, but I’ll lay them out here in case there are some who cannot reach the staking page:

Stake length (months) Return Percentage (%)
1 25.00
2 27.17
3 29.35
4 31.52
5 33.70
6 35.87
7 38.04
8 40.22
9 42.39
10 44.57
11 46.74
12 48.91
13 51.09
14 53.26
15 55.43
16 57.61
17 59.78
18 61.96
19 64.13
20 66.30
21 68.48
22 70.65
23 72.83
24 75.00

Depending on how long you stake for, you’ll receive a linearly increasing percentage of the revenue pie.

All this to say, the total amount of NEX staked in the smart contract does not influence your returns. That number – 1.8m as of writing this – does not exist in the formula, and therefore will not impact dividends. I have seen many people link the smart contract address, encouraging others to stake everything they have, and saying things like “come on everyone, the more we stake the more we make!”.

Total amount staked globally is an exciting figure, because it shows how much faith the community has in earning dividends and Nash’s future. Don’t expect this figure to increase your dividends though!

For those interested in short-term positions, consider how everyone rushing to stake can benefit you. Staked NEX = lower circulating supply = increased demand = increased NEX price, and because you haven’t staked you’ve maintained liquidity in your portfolio. Just a thought!

Happy staking everyone and congratulations to the Nash team on this monumental achievement :slight_smile: :nash_n:

Edit: a word