Compound staking calculator
Auto-restake vs manual. The gas break-even is smaller than you think.
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Most staking rewards don't auto-compound — you earn tokens, then manually restake them to start earning rewards on those too. The math gap between auto-compound (daily) and manual (monthly/annual) is meaningful at high APYs but trivial at low APYs. This calculator shows the delta for your specific stake size and gas cost.
Liquid staking tokens (stETH, rETH, cbETH) auto-compound by design — one token represents a growing claim on underlying stake. Native staking usually requires manual claim+restake with transaction fees.
The break-even analysis changes depending on which chain you're staking on. Solana's transaction fees are $0.001-$0.01, making daily compounding essentially free. Ethereum mainnet charges $5-20 per claim+restake transaction, making daily manual compounding prohibitively expensive for positions under $100,000. Cosmos chains sit in the middle — fees under $0.10, rewards claimable daily, making weekly compounding the practical optimum.
For most retail stakers on Ethereum, the answer is straightforward: use a liquid staking derivative (stETH, rETH, cbETH) and let the protocol handle compounding. The fee savings and compounding benefit together typically outweigh the 0.5-1.5% protocol fee that Lido and Rocket Pool charge. Native solo staking only makes sense at 32+ ETH ($80K+) where fee optimization matters and you have the technical capacity to run a validator.
$50,000 SOL stake at 7% APY: auto vs manual quarterly restake
Daily auto-compound: effective APY = (1 + 0.07/365)^365 − 1 = 7.25%.
Quarterly manual restake: effective APY = (1 + 0.07/4)^4 − 1 = 7.19%.
Annual difference on $50,000: $3,625 − $3,595 = $30/year.
Gas for 4 quarterly restakes on Solana: ~$0.01. Trivial.
On Ethereum mainnet (same math, different chain, 4 claim+restake txs at $15 each): $60/year in gas eats the benefit.
When compounding frequency actually matters
The gap between daily and annual compounding is: (1+r/365)^365 vs 1+r. At 5% APY: 5.127% vs 5.000% = 0.127 pts gap. At 15% APY: 16.180% vs 15.000% = 1.18 pts gap. At 30%: 34.97% vs 30.00% = 4.97 pts. The gap is meaningful once APYs exceed 12-15%. For ETH (3-4%), it's negligible. For some alts at 15-25% APY, auto-compound adds real value.
Staking validators: choosing the right operator
For Ethereum liquid staking, validator performance matters. Lido validators averaged 98.5-99.2% uptime in 2023-2024. Rocket Pool solo node operators averaged 97-99%. A validator with 98% uptime versus 99.5% uptime loses roughly 1.5% of expected rewards to missed attestations — equivalent to 0.05% APY at current rates. At scale this matters: $1M staked at 3.8% APY loses $750/year from a 1.5% uptime deficit.
For Cosmos chains (ATOM, OSMO, INJ), choose validators with below 5% commission, at least 12 months uptime history, and active governance participation. Avoid the top 10 validators by stake — they are often already highly concentrated, and distributing stake to smaller validators improves network decentralization without sacrificing meaningful APY.
Restaking and the compounding stack
EigenLayer restaking (launched 2024) lets ETH stakers earn additional yield by securing additional protocols — called Actively Validated Services (AVS). As of 2024, restaking APY additions ranged from 0.5% to 3% on top of base ETH staking yield. A staker earning 3.5% base on stETH and opting into EigenLayer restaking could earn 5-6.5% total APY.
Liquid Restaking Tokens (LRTs) like eETH (ether.fi), ezETH (Renzo), and rsETH (Kelp) auto-compound both the base staking yield and restaking rewards. The risk profile is higher — restaking introduces slashing conditions from AVS misbehavior, on top of standard Ethereum validator slashing. Position restaking yield as a bonus, not a primary strategy, until slashing track records are established over multiple years.
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Compound staking — frequently asked questions
Does auto-compounding trigger tax events each time?
In the US: yes, each restake is technically a receipt of rewards (ordinary income) even if automated by the protocol. Exchange-run staking usually reports aggregated monthly/annual totals. LSTs (stETH, rETH) defer tax until you swap out of the LST token. This is one of several reasons LSTs are tax-efficient vs native staking for US holders.
Are liquid staking tokens (LSTs) the same as auto-compounding?
Functionally yes. stETH grows quantitatively over time (rebasing on Lido v1; price-based on Lido v2/rETH/cbETH). One LST token represents an increasing claim on ETH stake. You pay one tax event when you eventually swap out of the LST; until then, gains are unrealized.
What's the optimal restake frequency without gas cost?
Mathematically: infinite (continuous). Practically: daily captures ~99.9% of the continuous compound benefit. Weekly is ~99.5%. Monthly ~98%. Quarterly ~95%. Annual ~92% of continuous. On chains where restake is free (Solana, many Cosmos chains), daily is optimal. On gas-expensive chains, less frequent + higher size per restake is the efficient frontier.
Why do some Cosmos chains have 15-20% APY?
Because the token inflation rate is 15-20%. If you don't stake, you're fully diluted. Staking barely keeps you whole. Real APY (nominal - inflation) on high-emission Cosmos chains is often 2-5%, not 15-20%. Compare stakers to non-stakers, not to zero.
Can I use an auto-compound service like Coinbase or Lido and still self-custody rewards?
Lido yes — stETH is an ERC-20 you hold in your own wallet, Lido just does the validator work. Coinbase staking no — rewards stay on Coinbase, you don't have self-custody until withdrawal. Rocket Pool's rETH works like Lido — fully self-custody, protocol does the infra work.
What is the minimum ETH needed to make native solo staking worthwhile versus Lido?
32 ETH is the minimum to run a solo validator. At 32 ETH (~$80K at $2,500/ETH), Lido's 10% fee costs you roughly 0.3% APY — about $240/year. Running your own validator costs $50-100/month in hardware and bandwidth. At 32 ETH the economics are roughly break-even. Above 64 ETH, solo staking starts to win on economics. Below 32 ETH, liquid staking (stETH, rETH) is superior in every dimension.
How does Solana staking compare to Ethereum staking in 2025?
Solana native staking yields 6.5-7.5% APY with near-zero gas for claim and restake. Ethereum native staking yields 3.2-3.8% APY with $5-20 per transaction. Solana's higher APY reflects higher inflation (around 5-6% annually decreasing); Ethereum's lower APY reflects lower inflation and fee-burning via EIP-1559. In real yield terms (APY minus inflation), ETH staking often nets 1-2% real and SOL nets 1-2% real — similar after accounting for inflation differences.
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