Syrup's Staking APY Rises with Buyback Surges, Depends on Staker Numbers

The staking APY on Syrup primarily derives from the protocol fee revenue, which stems from the fees generated through lending activities. These fees are allocated towards buying back SYRUP tokens on the open market, and the acquired tokens are then distributed among stakers. The APY is influenced mainly by three key factors: the volume of lending (the amount of capital actively lent out), the fee rates applied to loans, and the proportion of SYRUP tokens staked, as rewards are shared among stakers. Additionally, if the buyback amount increases significantly—say five to ten times—the staking APY would correspondingly rise, assuming the total amount of SYRUP staked remains unchanged. However, if more participants start staking, the increased buyback funds are divided among a larger pool of stakers, which would dilute the impact on individual APYs. Overall, the APY dynamics depend on both the absolute buyback size and the number of stakers involved, with larger buybacks boosting the yield if staking numbers stay stable, but less so if staking participation expands rapidly.