TON Staking APY Explained: How Rewards Work

A staking APY is an estimate of what staked Gram earns over a year, not a fixed interest rate. Here’s where TON staking rewards come from, why the number moves, and how to read the APY a liquid staking app shows you.

Updated October 2026 · By KTON

APY, APR, gross and net: the terms

Four terms come up whenever a staking rewards rate is quoted:

• APR (annual percentage rate): a simple yearly rate with no compounding.
• APY (annual percentage yield): a yearly rate that includes compounding, where earned rewards are added to the staked amount and earn rewards themselves. For the same underlying rewards, an APY is a little higher than an APR.
• Gross: the rewards before the protocol’s fee is taken.
• Net: what holders keep after the fee.

A gross APR and a net APY can describe the same rewards and still show different numbers, so compare like with like. The figure in the KTON app is a net APY.

Where TON staking rewards come from

TON is a proof-of-stake network. Validators lock up Gram, the network’s native asset (ticker GRAM, formerly Toncoin), to take part in validation, and they earn rewards for it. Staking directly as a validator takes a large amount of Gram and ongoing operational work, which is why staking pools exist.

With KTON, you deposit Gram into a shared pool. The pool lends that Gram to validator operators, who stake it with the TON Elector (the network’s validator-election system) and recover the stake plus rewards after the validation round. The loan is repaid to the pool with interest, and that interest is the pool’s profit for the round. This is KTON’s only source of yield: there is no trading strategy and no external DeFi farming.

Why the APY changes from round to round

KTON does not have a fixed rate, and no target APY is written into the contracts. What holders earn depends on how much of the pool was lent out, how the validators performed, and the interest realised in each round, after fees.

Rewards also arrive in steps, not continuously. A KTON settlement cycle is about 36 hours, and the pool books a round’s profit when that round finalizes. A round can pay more or less than the one before, and rewards can be lower in some rounds, so an APY worked out from recent rounds moves as well.

How KTON pays rewards: a rising exchange rate

KTON is a rate-appreciating liquid staking token. It does not rebase, which means your KTON balance does not grow. If you hold 100 KTON, you keep 100 KTON. What changes is how much Gram each KTON redeems for.

The exchange rate is the pool’s total Gram divided by the total KTON supply. When a round finalizes, the pool adds that round’s net profit to its total Gram while the KTON supply stays the same, so the rate goes up for every holder at the same moment.

This is what auto-compounding means here: each round’s net yield stays in the pool and starts earning in the next round. There is nothing to claim and nothing to restake. Because the rate moves only when a round finalizes, two readings taken within the same round can show the same number. The mechanics are set out in the docs chapter on yield and the exchange rate.

The 16% governance fee and what net APY means

KTON takes a 16% governance fee on staking rewards. It is a commission on the yield, not on your principal: it is taken from each round’s profit before that profit is added to the pool, and your staked Gram is never touched by it. The fee is a parameter that governance can change, so read 16% as the current value.

Because the fee comes out before the rate updates, the exchange rate already reflects it, and so does the APY shown in the app. That is what net APY means: the return holders receive, with the fee already deducted. You do not pay it again when you unstake.

There is no separate deposit or withdrawal fee beyond TON network gas. The full breakdown is in the docs chapter on fees.

How to work out your own return

You do not need a quoted APY to know what you earned. Two exchange-rate readings are enough: one from when you staked and one from now. Your entry rate is the Gram you staked divided by the KTON you received.

Suppose the rate was 1.000 Gram per KTON when you staked, and you staked 1,000 Gram, so you received 1,000 KTON. Suppose the rate reads 1.050 a year later. Then:

• Your balance is still 1,000 KTON.
• Its value is 1,000 × 1.050 = 1,050 Gram.
• Your return is 1.050 ÷ 1.000, minus 1, which is 0.05, or 5% for the year in this hypothetical case. It is already net of the fee, because the rate is.

The general formula is: return = (rate now ÷ rate when you staked) minus 1. If the two readings are less than a year apart, the result covers only that period, and it has to be annualised before you compare it with an APY. In the same hypothetical, a rise from 1.000 to 1.004 over 30 days is a 0.4% return for those 30 days, not for the year.

A return measured this way is in Gram. What Gram is worth in another currency is a separate question that staking does not answer.

Why a quoted APY is an estimate, not a promise

The KTON app derives its APY by measuring how much the exchange rate grew over recent rounds and annualising that growth across 241 rounds a year (a cycle is roughly 36 hours, which gives about 241 cycles in a year). So the figure describes recent rounds and projects them across a full year, and the year may not turn out that way. The inputs change every round, so the displayed APY changes too.

Treat the APY as a live estimate based on recent performance. It is not a guarantee of future returns.

What can lower your rewards

• Validator results: yield is the interest on Gram lent to validators, so it depends on how much was lent out in a round and how the validators performed.
• A losing round: in normal operation the interest earned each round is positive and the rate rises. In principle, if a round’s net profit were negative, the loss would be subtracted from the pool’s total balance, and the rate would step down for all holders proportionally. Losses are shared the same way gains are.
• The fee: a change to the governance fee would change the net figure.

Staking also carries smart-contract and other risks that are not about the rate. See is liquid staking safe? for those.

Where to see the live APY

Any rate printed here would go out of date, so this page quotes none. The current net APY is shown in the KTON app. The exchange rate, the pool’s total balance, the KTON supply and the fees can also be read directly from the contracts on-chain, so the figure can be checked independently.

Frequently asked questions

Is the TON staking APY fixed?

No. KTON does not advertise a fixed or guaranteed APY, and no target rate is written into the contracts. The return depends on validator performance and is worked out live from on-chain results, so the figure changes from round to round.

What is the difference between APY and APR?

APR is a simple annual rate with no compounding. APY includes compounding, where rewards are added to the staked amount and earn rewards themselves. KTON rewards compound automatically each round, so the app shows an APY.

Is the APY shown in the KTON app before or after fees?

After. KTON takes a 16% governance fee on staking rewards (a commission on the yield, not on your principal), and the APY shown in the app is already net of it. There is no separate deposit or withdrawal fee beyond TON network gas.

Can the KTON to Gram exchange rate go down?

In normal operation the interest earned each round is positive and the rate rises. In principle, if the net profit of a round were negative, the loss would be subtracted from the total balance of the pool and the rate would step down for all holders proportionally. Rewards are not guaranteed.

How long does it take to get Gram back when I unstake?

Unstaking is not immediate. You return KTON, and your Gram is released after the current round finalizes, so the wait can be up to about 36 hours.

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