Where do the staking rewards come from?

Electra Protocol is a proof-of-stake blockchain. This means that users can stake their XEP coins in order to keep the network up. In return for pledging their coins, the blockchain is rewarding users with ~3% rewards APY, which are paid out in XEP to eligible validators. These XEP staking rewards are taken from the reserved token allocation. With the creation of the blockchain in January 2021, 44% of the whole supply was reserved to be used in the future for paying out staking rewards.

The discrepancy between the circulating supply (~ 17.4 billion XEP as of January 2022) and the max supply (30 billion XEP) are all XEP coins which can still be mined for paying out such rewards. This means that more than 12 billion XEP will be available for staking. When max supply is reached, the max block reward will be set to 100 XEP. Current supply: see XEP Block Explorer (opens in a new browser tab).

The economics of XEP: 47.3% of the current maximum supply are to be used for paying out staking rewards. Figures are as of January 2022.

Strictly speaking, Electra Protocol does not have a hardcoded maximum supply. Like any other proof-of-stake blockchain, the technology cannot be limited to a specific maximum supply. In order to make sure that the blockchain will not exceed too many coins, the staking reward amount has been carefully selected to be ~3% APY. As there cannot be a max supply in any proof-of-stake protocol, the maximum supply advertised for Electra Protocol is just for display reasons, as most exchanges require this information to be listed. The max supply can rise endlessly for any given blockchain project running proof-of-stake. That’s why the APY is critical for the sustainability of a cryptocurrency.