How mSOL Rewards work?

The price of mSOL is calculated as follows:

Price of mSOL = total_staked / tokens_minted

 

As the protocol cannot mint new mSOL without SOL being exchanged for them, only the total staked amount is going up (for any new mSOL minted, the same amount of SOL, at the current price of mSOL, has to be staked and also joins the total staked amount).

 

This means that the price of mSOL is going up each epoch relative to SOL as long as staking rewards are distributed for the SOL staked in the protocol. If you keep mSOL for a year, its value against SOL will have gained 7-8% (Marinade's APY at the time of writing).

Video explanation here: 

Q: Do I need to claim my rewards?

A: No. You will realize your SOL staking rewards when you unstake mSOL for SOL, but the value of your mSOL is continually growing. If you choose instant unstake, your SOL plus SOL staking rewards. If you choose delayed unstake, you must return to the Marinade DApp to claim your SOL. You can sign up for Dialect alerts by clicking on the bell icon next to your wallet in the Marinade DApp to be notified when your stake is ready to be claimed via email, telegram, SMS, or wallet.