Rewards are automatically added to your stake (delegated tokens).
Alternatives inReward Compounding
Delegators can leverage the compounding effect for their rewards. This results in a higher return but also, depending on the protocol, in foregoing the liquidity of your rewards. In most protocols, delegators can choose how their rewards are to be treated.
There are four different subcategories regarding the compounding of your rewards: 'Auto'; 'Manual'; 'Custom'; and 'Disabled'.
Explore other terms
For better classification, differentiation and comparability of different Blockchain networks, we identified different Protocol Mechanics.
Staking Mechanics refer to the token economics, which is a new branch of the economy that explains the structure of a particular ecosystem in the blockchain sphere. It describes the study, design, and implementation of economic systems built on blockchain technology. Each platform and blockchain application is developed under its own token-economics model. Proof-of-Stake blockchains not only differ in terms of their 'Protocol Mechanics', but also in terms of certain staking-related parameters, e.g. their reward or inflation rate as well as certain actions that are required by delegators.
Staking your digital assets is not a risk-free endeavor. Please make sure to review all the risks involved before you start your staking operations and make sure to properly research the validator that you want to stake with.