> For the complete documentation index, see [llms.txt](https://docs.magicsquare.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.magicsquare.io/magic-staking/magic-farms/reward-calculation-mechanism.md).

# Reward Calculation Mechanism

Your daily rewards are calculated based on your share of the staking pool for that day using the following formula:

<mark style="color:red;">**User Daily Rewards**</mark> = (Total Daily Rewards) × (User Shares / Total Shares of That Day)

## Key Characteristics:

#### ⏳ Early Participation Advantage

Stake early while the pool is smaller to earn a larger portion of the daily rewards.

#### 📉 Declining APR Over Time

As more users join and the staking duration shortens, the Annual Percentage Rate (APR) naturally decreases.

#### 🎯 Incentivized Participation

To earn maximum rewards, users are encouraged to stake early and stake more.