AR.IO offers users the opportunity to earn rewards by staking their tIO tokens to network gateways. This process allows you to earn rewards based on the performance of the gateways and provides a chance to grow your investments over time. However, the key to truly maximizing your earnings is understanding the concept of Effective Annual Yield (EAY) and how it affects your returns.

What is Effective Annual Yield (EAY)?

EAY represents the annual return rate on your staked tIO tokens and takes into account the compounding effect of the rewards you earn. Compounding rewards allow your staked tIO tokens to grow over time, along with the rewards you've earned.

Although compounding may seem small at first, it can make a significant difference over time. For example, by reinvesting the tIO rewards you earn throughout the year, you can increase your total stake and, consequently, see exponential growth in your future returns.

How is EAY Calculated?

EAY measures the total return on your staked tIO tokens over a year, considering the compounding effect. For example:

1. Suppose you stake 1,000 tIO tokens to a gateway.

2. At the end of the first month, you earn 100 tIO tokens as rewards.

3. If you reinvest those 100 tIO tokens, in the second month, you’ll earn rewards on 1,100 tIO tokens.

4. By the end of the year, if you continue to reinvest, you will maximize your EAY.

In this way, you’ll have the chance to earn much more than your initial tIO stake. EAY accounts for the rapid growth in rewards as the compounding effect takes hold over time.

Delegated Staking and Gateway Selection

One of the most effective ways to increase your EAY is by staking your tIO tokens to high-performing gateways. Gateways earn rewards as they are selected as observers on the network. By staking to a gateway that is frequently selected, your rewards will grow accordingly.

However, one critical point to consider is that if the amount of tIO you stake is small relative to the total amount staked in that gateway, your returns will grow more slowly. In such cases, it may be beneficial to strategically increase your stake to accelerate your earnings.

Strategies to Maximize EAY

To grow your investments faster and maximize your EAY, consider focusing on a few key strategies:

1. Reinvesting Rewards: Reinvesting the tIO tokens you earn directly into your stake is the most effective way to boost your EAY. The power of compound growth will significantly accelerate your rewards over time.

2. Choosing High-Performing Gateways: Staking your tIO tokens to gateways that are frequently selected as observers will help increase your rewards faster.

3. Investing in ARNS Names: Instead of solely reinvesting your tIO rewards, you can use some to purchase ARNS names. Short, valuable ARNS names may appreciate in value over time, offering you another avenue of potential return.

Conclusion

Delegated staking is a powerful way to grow your earnings on the AR.IO network, but the key to maximizing those earnings is understanding the concept of EAY. By reinvesting your rewards and staking to high-performing gateways, you can harness the power of compound growth to significantly increase your returns. Strategic thinking is crucial for long-term success and optimizing the value of your staked tIO tokens.