Yeah, I know the feeling, but don’t give up I wanted to give up 3 times before to recieve the IOHK delegation
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In the spirit of the money-maker pools here in forum, I wonder if big excanges like binance & co would offer good and fair staking rewards to all ADA holders who will transfer ADA to other pools.This will happen some day and than you will cry here with me how unfair the rewarding system is.
The worst thing is that due to the greedy, decentralization suffers.
I have been using Contabo as well for relays and they are great value for money. Never had any problems with them.
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@Bees_Project I understand your frustration mate. I’m facing the same problem but I must admit our spirit (we are 2 pool owners) is more to be creative, motivated and active to change our fate. Crypto jiu jitsu, use your enemy strength in your favor.
Easy to say I know, but some possibilities exist to have your pool taking off. Might be slow, painful, but lot of others pools are motivated too so I guess competition can be hard. It’s also all for cardano benefit.
Money is part of the deal, we are talking crypto ain’t we ? It’s just that it should be a fair reward for what you bring on the table. And the only way to avoid this is governance and regulation. I think IOHK is trying their best and their set of rules are good. Sure it needs some tuning and controls on some specific points. But they also have to be careful to not destroy what they have built so far …
Too many too small pools is not a viable ecosystem, you have to make a way for some to pop up and become bigger, evolve. That one fix they can focus on, the IOHK delegation is already a great idea !
The other problem, imho, is big players like Binance coming and “trolling” the system. This should be adressed in some way. I have not idea how though …
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some people here tried to constantly demolishes small pool goals saying they are worthless, you won’t find much support in community overall. sorry to say that but its a matter of survival of fitest now.
Consideration 1: Is there any value in the notion of auto redelegating stake (at least for users who opt for it) when a pool fails to mint over X period, perhaps nodes are down or KES rotation was forgotten etc.
This way you could promote validating whether small SPO setups are configured correctly.
Consideration 2: perhaps a ‘rent-a-whale’ or ‘rent-a-block of stake’ system?
Personally, I’d be more than happy to hand any/all rewards for every epoch, for a 1mil stake to try mint regularly and at least prove myself out. At least until I can ramp up to the 2-3m mark whereby allowing myself (as a small operator) to offboard a ‘whale’ investment, even if it takes a year or two - that’s fine - but as of right now it feels like the only way you can secure new delegators is by tricking them and or hyping your own pool in youtube guides, which I’d prefer not to do.
Perhaps to @Markus-VITAL’s earlier point (I think it was you?), if the goal/aim here it to only have 500 pools, perhaps all the small operators should pack it up? Please know, I’m not saying this with malice/spite at all, I love and would like to support and contribute to the ecosystem, but if there’s no baked in incentive to ever stake to a pool with < 1m (higher risk, higher reward) then most delegators are (understandably) looking for ROI - then it simply doesn’t make any sense outside of hobbyist interest?
[RELAY]
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to be honest doesn’t matter where the relay servers are, what matters is where the stake operator is located. most of servers are cheaper in US or Europe, nothing prevents somebody living in Africa having servers in US.
At the end of the day small pools need to be able to reduce the 340 ADA pool fee - this is the only way that you can become truly competitive with bigger pools. If you are only minting one or less blocks per epoch the 340 ADA is far too big a percentage to be taking from the delegator rewards. I am surprised that this is not becoming a priority. If this can be reduced to a competitive level then delegators will on average overtime get a similar reward to what a big pool pays
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Even reducing the 340ADA fee isn’t going to help!
Only a minority knows/understands and cares about that!
Majority of delegators are not familiar with all the technical details and they don’t care!
They create a wallet, navigate to Daedalus/Yoroi delegation tab and they just pick whatever says that pays the highest reward!
The above is being proved with the amount of delegation 1PCT and other multi pools get without any social media education/promotion! Even when they get saturated, delegators remain there!
Best chance for small pools is if Daedalus/Yoroi decide to promote those pools so they get visibility or if they abolish the ranking system and just randomly display the pools!
Anything else, isn’t going to work! Even a new formula! Multi pools have already got millions of ADA! They will just split them! As long as they are on the top of the list they will keep attracting delegators!
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Please don’t take this as a negative comment but what makes you think small pools are wanted or needed by the Cardano algorithm?
I ask because I see a lot of similar posts that talk about helping small pools. My understanding is that there is an optimal number of pools (currently 500) and there is an optimal number of staked Ada per pool which is whatever saturation is currently set at.
This might sound like tough love but I don’t think Cardano is built to have a bunch of small unprofitable pools. It’s just not designed that way.
I liken it to produce sellers in a town. This fictional town only needs about 500 well established small businesses to sell oranges. This would be a stake pool.
You can pick the oranges from your orange tree in the back yard and try to sell them but the fact remains that the town has an optimal number of smooth running decentralized orange sellers already operating to meet the town’s entire orange demand.
These operators either got in cheap and early by taking a risk and speculating that this town would eventually want to buy a lot of oranges
OR
they worked hard elsewhere to make a lot of money and got in late but they have enough money to invest to build a business that can compete with the ones that got in early.
In either case they took a lot of risks and put in work.
That is all to say, the notion that small pools can and will exist isn’t necessarily true in the long term.
As Cardano grows the dynamics will change but the end state will always be an optimal number of similar sized and decentralized pools running the network efficiently.
I say all this with hope that as Cardano grows then a lot of small stake pool operators will grow with it and get bigger.
My main point is there is a finite number of opportunities here. As more and more people learn about Cardano they won’t necessarily have the opportunity to start a small stake pool and grow it over time.
We’re at a once in a generation moment here
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With Binance already having ~90 pools with most of which - saturated, and the ecosystem forcing away small SPOs trying to help contribute to further decentralization (which I understand, doesn’t make sense given a myriad of reasons in the current climate/parameters), I think we may as well just hand over our voting rights now.
If the protocol allowed for a higher target of pools and baked in incentives, we’d have more people hodling ADA and singing its praises, which could only be beneficial for the currency/network as a whole, no?
It makes no sense (at least to me) that onboarding new stake pools is redundant because; ‘first in last out’ and ‘we only need 500 operators’, perhaps I’m just jaded and salty though =P
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I think it is important because if delegators were aware that nearly 50% of the reward is being taken up in pool fees if the pool only mints one or less blocks per epoch then it makes no sense to delegate to a small pool regardless of all the other factors.
sounds a good idea but impossible to see implemented, I really doubt they’d allow that. anyway thanks for the effort.
Reducing the min fees is something I wanted to do but we can’t, it hurts a lot the small pools.
Let’s not forget the obvious thing that not everybody lives in high net worth countries, some will have different income, otherwise they are planning restrict Cardano to Europe North and US, they should take care of this situation. It completely kills African pools, South America, Southern Europe and Middle East. They just don’t have enough income for pool creation.
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This kind of assumes everyone in those countries is poor.
Also I don’t think there was ever any intent for people with very little money to be able to start a pool unless they have access to capital(unless they had the foresight and risk tolerance to get in early) It’s the exact same scenario of starting any business.
It takes some start up money. Many small businesses borrow to start a business.
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I believe this would be a great solution and i hope it gets into a CIP:
In summary:
There is a new mechanism called leverage which is derived by dividing stake by pledge. Assuming this number has a maximum of 20, it would mean that a small pool of 20k can have a 400k stake with very good returns.
The same means that big 60 pool groups with 60m of stake per pool would need a lot of pledge to maintain good returns!
If you think about it in a universal way, everybody would also understand that to be allowed to take care of a lot of people’s ADA it would make sense to put in more yourself as the pool operator to prove you have enough “skin in the game”.
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There’s no need for childish insults.
Why should a person with lower pledge get the same returns as someone who risks a lot of their money with a higher pledge? That goes against all the laws of economics.
Think about it. If I work hard for 20 years to get 100k or 300k Ada and then tie it up in a pledge only to have someone who has 1000ada get the same rewards then nobody would pledge high and the number of pools would increase exponentially.
It would be way way WAY worse than it is now.
The whole system would fall apart.
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Pretty certain earnings are capped still based on size and pledge. it just allows for an entry point to allow small pools to make some money
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Hi @michaelb1 thanks for reading my post and your reply.
I am not sure if we understand each other correctly. I am not talking about absolute returns but about percentage returns. So if you pledge 20k you can earn 5,5% up to a 400k stake for your delegators (remember we are talking about delegator returns here). If you pledge 1m you can also earn 5,5% for your delegators but that would work for you AND your delegators up to 20m stake. Both operators would of course also earn ADA but the 1m pledge would earn much more (in absolute sense) than the 20k pledge. So in that sense it still is a capitalistic model. Let it be clear: I believe in capitalism.
Or did I miss your point in a way?
PS: lets note that the assumed leverage of 20 is just that. It can be debated and adjusted. The same goes for the speed in which return will be depreciated after leverage is breached
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No I get it. We’re talking percentage returns as you said.
My main thesis about Cardano stake pools is that there cannot be an infinite amount of them. If low pledges were rewarded than we would have countless pools. Too many to be sustainable for the system. In my opinion.
Unfortunately, the best time to get in was a year ago.