Cardano Stake Pool Desirability Estimation

English 🇬🇧🇺🇸 Operating a Stake Pool
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#1

Hi everybody!

I recently built a simple web app that estimates Cardano stake pools’ desirabilities. It might be useful for those who are interested in running a stake pool. Here is the github repo: https://github.com/cffls/cardano-stake-pool-desirability.

What is this project?

This project estimates desirabilities of Cardano stack pools, as well as rewards for stack pool leaders and stack pool members.

The calculation is based on cardano delegation design specification. A compiled pdf version is available here.

What is desirability?

Desirability of a stake pool shows how desirable it is for participants to delegate their stakes to. More desirable a pool is, more ADA rewards people will get by delegating to the pool.

Why should I care about desirabilities?

After Cardano enters Shelley (decentralization), people will be able to delegate their stake or run their own stake pools. Stake pools will be ranked by their desirabilities and be shown on Daedalus. Participants will be delegating their stakes to pools that have higher desirabilities for more rewards. Desirability is important if you are interested in:

  • running your own stake pools
  • experimenting your choices of cost and fee(margin) for your pools

What are “Myopic desirability” and “Non-Myopic desirability”?

Myopic desirability is proportional to immediate stake member rewards in the current epoch. In contrast, non-myopic desirability is proportional to long-term stake member rewards when a pool is saturated. Myopic desirability will be equal to non-myopic desirability in a saturated pool.

What is pool leader influence factor?

Pool leader influence factor is the degree of influence a pool operator’s pledged stake has on pool rewards. This factor is used in reward calculation to prevent sybil attacks, where malicious attackers can possibly create dozens or even hundreds of small pools to produce majority of blocks. For more details, please read this blog (Preventing Sybil Attacks) from IOHK.

6 Likes
#2

A couple of simple questions about stake pools … If you have small amounts of ADA to stake, is pooling the only way you can be rewarded for your stake? If I understand the basics of the protocol, you need s minimum percentage of total stake to participate in block leader selection, and through pooling, the smaller stakeholders can participate.

I hope I understood at least this much.

#3

No!
There is no minimum to stake, however, having a very small amount of ADA would cause less odds that you would be elected in the process

So what you have to do is to delegate your stake ( not important the amount of ADA ) to a stake pool of your choosing and that’s it

#4

Ok, but as a practical matter, there are only so many slots per (epoch? well some level of “round”) cycle so the effectively you don’t really participate below some level based on a threshold of effective reward. Otherwise, why pool? I guess it would “even out” your rewards. Or am I confused about something basic?

#5

Regardless of slots per epoch, return is proportional to holding, there is no level below which you don’t participate. But low holdings, naturally, seldom win, so yes, pooling evens out the return, as you get smaller amounts more often. But of course there are also other reasons to delegate to a pool.

#6

Thanks, that makes it clear. With a really small stake for short times, you can get nothing or with the lottery.

As I understand there are special features related to side-chain stake that may not be immediately available. I’m guessing that while on the side-chain, the stake may be allocated to a different set of addresses. These could be handled by side-chain contracts and really any mechanism the side-chain implements.

I imagine the minting rewards are set with on-chain actions even if full treasury governance is still in the future. Is that right?