The Rewards Calculation Service (RCS) is a standalone solution designed to compute Cardano staking rewards—along with treasury, reserves, deposits, and fees—from genesis to the current epoch.

RCS provides:

• Real-Time Calculation of current epoch rewards, derived directly from ledger state transitions.
• Permanent Historical Storage of rewards accessible for any stake pool at any epoch.
• Lightweight Infrastructure that does not rely on Cardano-db-sync, significantly reducing sync and query times.

Beyond rewards tracking, RCS can be scaled into a more comprehensive indexer that tracks not only what each block contains but also the evolving internal state of the Cardano ledger at every moment in time. This would provide a deeper level of insight for dApps, advanced analytics platforms, and other Cardano services seeking to leverage complete ledger state.

Currently, the Cardano blockchain does not store staking rewards, reserves, or treasury history on-chain in a directly accessible form. Instead, these data points are derived from complex calculations built into the node and ledger code. Consequently, tools such as Cardano-db-sync have become the primary source for retrieving historical staking rewards data. However, this approach comes with several challenges:

• Long Sync Times and Slow Queries Cardano-db-sync requires extensive synchronization and querying processes, which can be time-consuming and resource-intensive.

• Suboptimal Data Schema for Certain Queries The PostgreSQL data schema used in this context is not always optimized for the specific query patterns required, leading to inefficiencies in data retrieval.

• Complex Modifications Adjusting or modifying Cardano-db-sync is further complicated by the fact that the service interacting with PostgreSQL is implemented in Haskell, making alterations more challenging, particularly for developers who are not proficient in that language.

These factors combine to create a single point of inefficiency, making it difficult for developers, stake pool operators, and other ecosystem participants to access staking rewards history quickly and reliably.

Who benefits and how?

Developers: Gain access to a real-time and historical rewards calculation API with optimized indexing and faster queries—no reliance on the bulky db-sync approach.

Stake Pool Operators (SPOs): Easily track staking rewards at each epoch without using db-sync or third party API’s. Delegators: Able to access transparent, reliable reward data for their stake pool delegations, promoting trust and engagement.

Cardano Ecosystem: Gains greater decentralization and diversity of infrastructure solutions, reducing dependency on a single tool.

By providing a lightweight reward calculation service, this proposal lowers infrastructure costs, simplifies reward querying, and accelerates data availability. Overall, it aims to enhance developer productivity, reduce operational complexity, and strengthen transparency in Cardano’s staking mechanism.

Moreover, there is a significant opportunity for scaling this service to evolve into a comprehensive indexer in the future. Such an indexer could track not only block contents but also the internal ledger state of a Cardano node at each point in time, thereby providing a richer dataset for dApps, analytics, and advanced tools built on Cardano.

Investigation & Analysis Researching and documenting Cardano’s reward formulas, ledger transitions logic. Deliver a summary document with pseudo-code.

Core Development & Architecture Implementation Developing the project skeleton, i.e. creating docker compose file for local development and setting up the service. Develop core backend functions for block processing, reward updates, and epoch transitions. Integrate with database to persist historical data.

Testing, Optimization, and Deployment Cross-verifying reward calculations with db-sync to ensure accuracy. Implementing restart and rollback handling mechanisms. Developing an API for retrieving rewards history. Deploying and testing.

Milestones:

Milestone 1: Research Successful completion of research from the beginning of rewards up to Conway updates.

Milestone 2: Planning & Design Design and implementation plans have been successfully delivered for the execution.

Milestone 3: Coding Successful delivery of the coded Indexer, transition states, and aggregator implementations.

Milestone 4: Writing Docs Successful delivery of the calculations against the current implementations on DB-Synch and the update of the documentation.

Milestone 5: Testing / Docs Beta version of the rewards calculation project has been successfully launched.

Milestone 6: Beta version Final release of the Rewards Calculation Service has been successfully launched.

Budget Items:

Development Unit: 5 FTE Cost: USD 140,000 Total: USD 700,000

Testing and Support Unit: 3 FTE Cost: USD 80,000 Total: USD 240,000

Infrastructure Unit: 12 Infra Cost: USD 1,800 Total: USD 21,600

Scrum Master Unit: 0.5 FTE Cost: USD 140,000 Total: USD 70,000

Total Cost: USD 1,031,600

Team Composition: · 1-2 Senior Software Developers experienced with Cardano internals. · 1 DevOps Engineer. · 1 QA Engineer · 1 Lead Developer to coordinate tasks and oversee.

Timeline: · Investigation & Analysis – 3 months · Core Development & Architecture Implementation – 9 months · Testing, Optimization, and Deployment – 3 months

Deliverables:

Milestone 1: Research (USD 171,933) Successful completion of research from the beginning of rewards up to Conway updates.

Milestone 2: Planning & Design (USD 171,933) Design and implementation plans have been successfully delivered for the execution.

Milestone 3: Coding (USD 171,933) Successful delivery of the coded Indexer, transition states, and aggregator implementations.

Milestone 4: Writing Docs (USD 171,933) Successful delivery of the calculations against the current implementations on DB-Synch and the update of the documentation.

Milestone 5: Testing / Docs (USD 171,933) Beta version of the rewards calculation project has been successfully launched.

Milestone 6: Beta version (USD 171,933) Final release of the Rewards Calculation Service has been successfully launched.

EMURGO is one of the founding entities of the Cardano blockchain and has been developing tools and projects related to the protocol since the very beginning. Between maintaining low-level libraries for dealing directly with the protocol, developing client side wallet applications handling blockchain events, developing Plutus solutions, and running custom backend services for light wallets and numerous dApps aggregating chain data we have a decent understanding of the technical specifics of the ecosystem.

EMURGO will maintain the Rewards Calculation Service (RCS) in the same manner as other EMURGO-led Cardano projects. After the initial development phase, ongoing updates, bug fixes, and feature enhancements will be handled through pull requests—both from internal EMURGO teams and the broader open-source community.

All code changes will undergo review and testing to ensure quality and compatibility with Cardano’s evolving protocols. As with CSL, RCS improvements—including updated calculations, database optimizations, or compatibility with future eras—will be added incrementally to align with Cardano’s roadmap. Regular version releases and release notes will keep developers informed, and any critical issues will be addressed promptly.

The Cardano community has repeatedly voiced challenges regarding the speed and complexity of existing solutions (e.g., db-sync). Additionally, internal teams at EMURGO have observed that building or scaling reward-related services around db-sync is time-consuming and often overkill for retrieving historical rewards. A more optimized approach is needed.

There is no existing dependencies