Relation between Collator and staking?

Question

Can anyone please explain what is the relation between collator and staking rewards ?

Answer 1

For a parachain to advance, the chain collators have to assemble blocks.

The collators are people or entities that have some hardware. To motivate those collators to participate in block collation, they need to be incentivized. They need to be paid.

The idea of parachain staking is that anybody with enough deposit can join as a collator. Then, we introduce a lottery. In each slot, one or several collators can win. The winning collators earned a chance to submit a parachain block. Whoever ends up submitting a block earns some reward. On average, all collators will win in that lottery. Those rewards (hopefully) make up for the costs of running the collators' hardware.

This is a bit oversimplified, but I hope it helps understand the basic principle.

Answer 2

Expanding on the comment by @Squirrel:

The relationship between Collators and Staking rewards is conditional to whether that was a parachain design decision in the first place.

Staking is not the only available mechanism for collator selection. In fact, it's not even the mechanism that Substrate and Cumulus provide "out-of-the-box".

From https://docs.substrate.io/reference/how-to-guides/parachains/select-collators/:

You are free to choose your method of collator selection. Common methods include stake voting or directly assigning collators via committee or other origins such as democracy. ... The Cumulus collator-selection pallet is a practical example on implementing stake voting to select collators.

There are also different ways to implement incentives for collators. Take a look at Moonbeam's parachain-staking pallet to explore how.

For the cases where a parachain did choose to implement collator staking (perhaps via Moonbeam's pallet), then the dynamics follows the explanation by @pepyakin on the other answer.