Staking Yield Reference Rates
Crypto reference rates for staking yields
Introduction
Vinter has developed a set of staking yield reference rates to provide a transparent, rule-based methodology for capturing the yield of crypto assets engaged in staking. These rates offer a measure of the yield for individual assets, updated daily and expressed as an Annual Percentage Rate (APR) and an Annual Percentage Yield (APY).
The methodology behind these benchmarks ensures they are regulated, audit-ready, resistant to manipulation, and subject to regular review.
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Staking Yield Rates Overview
The Vinter Staking Yield Reference Rate represents the yield on a crypto asset, updated daily and presented as either APR or APY. Calculating yields per asset involves selecting the median yield from a set of chosen providers, a method particularly robust against outliers. The data sources undergo frequent scrutiny to maintain their currency and accuracy.
The calculation of APY incorporates the compounding effect of reinvesting daily rewards; although theoretically defined for all APRs, not every asset facilitates this reinvestment strategy in practice.
Asset managers benefit from these benchmarks in determining a fair sharing of staking yields with investors.
For a comprehensive list of assets and their yield rates, please refer to the API documentation under "Active Staking Yields."
Data Source Tier System
Within the framework of Vinter's Staking Yield Reference Rates, various staking rates are offered to cater to the diverse needs of our stakeholders in the industry. As of March 14, 2024, Vinter calculates the following series for staking rates:
On-chain Data (Tier 1)
Tier 1 encompasses data providers delivering on-chain data, enabling the calculation of precise staking reward rates directly from the blockchain. This series is tailored for those requiring detailed blockchain data to compute the APR for specific public addresses or validators.
Staking Providers (Tier 2)
This category integrates data from entities or Decentralized Autonomous Organizations (DAOs) offering validator services, presenting a blend of direct and managed staking services. These providers usually feature higher-than-average, stable rates extracted from their APIs or websites.
Exchanges (Tier 3)
Rates in this series are derived from exchanges like Kraken, Coinbase, and Binance that offer staking services. This option caters to investors preferring flexibility, with lower reward rates and shorter lock-up periods.
Implementation Details
apr-2-d series
The -2- series uses data extracted from Staking Providers (Tier 2). All rates are extracted at 10:00 UTC and validated against other sources.
Additionally, all Tier 2 data sources are regularly reviewed for staleness and abnormal values. This series benefits from an anomaly detection system that compares the final median price obtained from Tier 2 Data Providers against third-party sources.
Hence, the list of providers is subject to change to ensure the accuracy and currency of the Staking Yields Reference Rate.
Illustration
To illustrate the calculation of staking yield rates, let us consider three staking providers: Provider A, Provider B, and Provider C. These providers offer APRs for a crypto asset like Ethereum (ETH).
For a particular day, the APR rates provided are as follows:
Provider A offers an APR of 5.5%
Provider B offers an APR of 6.2%
Provider C offers an APR of 4.8%
Given these rates, the median APR for Ethereum on this day would be 5.5% since it is the middle value when the rates are ordered. This value is chosen as Ethereum's daily staking yield rate in the Vinter Staking Yield Index.
Mathematical Formulation
Annual Percentage Yield (APY) Calculation: The APY accounts for the compounding effect of reinvesting daily staking rewards over a year. For a given APR, the APY can be calculated using the formula:
Where:
APR is calculated as described above, expressed in decimals (e.g., 5.5% as 0.055).
365 represents the number of days in a year for daily compounding.
Eligible Assets
Assets are eligible as index constituents if they meet the eligibility criteria listed in Vinter’s benchmark statement, if their consensus mechanism uses staking, and if staking is permissionless, either directly or through delegation.
List of Active Staking Yield Reference Rates
The symbol identifying each reference rate consists of the following parts.
Asset: The symbol, e.g.,
eth,sol, ...Method: The calculation method, i.e.,
APRorAPYSeries ID: The ID describing the data provider category, e.g.,
2Frequency: Staking Yields are only offered in the daily (
d) frequency.
E.g., eth-apr-2-d
Monitoring
The Vinter Staking Yield Reference Rates's monitoring process encompasses pre- and post-publication phases to ensure accuracy and currency. Key activities include data integrity verification, anomaly detection before release, and post-publication evaluations for ongoing accuracy and necessary corrective updates.
Furthermore, data providers' performance is assessed to maintain data quality, with adjustments made according to their reliability and relevance. Engaging with stakeholders for feedback is pivotal to enhancing the accuracy and breadth of the rates.
Administration
The Benchmark Administrator is the central recipient of input data with the ability to evaluate the integrity and accuracy of input data consistently. The Benchmark Administrator is responsible for the development of the indexes and controls all aspects of the provision of benchmarks. The Benchmark Administrator has established a permanent and effective oversight function, governance processes subject to periodic reviews and audits, policies regarding complaints, ethics, conflicts of interest, and contingency, and has established a clear internal organizational structure with consistent roles and responsibilities to identify, prevent, disclose, mitigate, and manage conflicts of interest.
The Calculation Agent is an individual or entity responsible for determining the value of an index and/or a financial instrument. The Calculation Agent calculates the index values in accordance with the index methodology. Upon the request of the Benchmark Administrator, the Calculation Agent shall provide all information available on the composition and details of the calculation of the requested index.
The Publication Agent is an entity responsible for the publication of index values.
Vinter is the benchmark administrator, calculation agent, and publication agent of this index family. Calculation agent services include benchmark development, integration, and technical maintenance. Benchmark administrator services include legal maintenance and oversight of benchmarks. Publication services include the distribution of benchmarks, methodologies, and benchmark statements.
Definitions
Staking Yield: The currency reward one gains when staking an asset to a staking provider/validator. The reward can be compounded (APY) or not (APR) and is given as a percentage of the amount of asset put in staking.
Crypto asset: A digital representation of value that is cryptographically secured.
UTC: Coordinated Universal Time.
Accuracy: Represents the extent to which the data are free of error and reliable, as well as the degree to which the data map (or are close to) the actual values.
Currency: Refers to the extent to which the data are sufficiently or reasonably up to date for the intended task.
Document Versions
Version 1.0
Initial version. March 11, 2024.
Forked from Reference Rates
Disclaimer
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