Try Quests to earn cryptoIn this dashboard we want to investigate the possible relationship between LUNA Price and LUNA staking yield.
I will first present LUNA price overtime, then will go on to explanation of Staking Yield through step by step calculation. Finally, I will present a graph to compare LUNA price and staking Yield.
LUNA Staking YIELD (APY)
Luna staking yield is calculated based on the rewards and bonuses that validator received for their block mining. When a block is mined all validator received the reward evenly (relative to their voting power = the number of LUNA that is staked in their pool). After reduction of commission of the validator, the rest of the reward will be distributed among delegators based on the weight of their stake (including the validator). The proposer will receive am additional small bonus as well. This also will be distributed same as the reward.
In general, for LUNA staking we can use the following formula: Total rewards distributed for mining/ Total voting power of delegators
The rewards consists of 'block provision per block' in TerraSDR (uLuna), rewards in ANC and MIR, and airdrops of different tokens.
To calculate APY for each day I used the following formula:
(Total commission is distributed + Total ANC airdropped for LUNA staking + Total MIR airdropped for LUNA staking)/ Total Voting power of validators.
Conclusion
The graph below shows the relationship between LUNA price and LUNA staking yield. As can be seen it seem these have a negative relationship (possibly correlation). While LUNA staking yield in the beginning of 2021 was in its peak, LUNA's price grew towards the end of the year.
The cause-effect relationship needs more investigation.