Cardano staking comparison

So I did a little staking experiment. I have about 5000ADA in an Exodus wallet making 3.3%APY and then I have almost 5500ADA in a Daedalus wallet staked in the ACL pool, currently ranked 106, with a low (28%) saturation. Now, in a period of about 3 weeks, I earned over 7ADA in my Exodus wallet, whereas I earned under 6 in Daedalus. Am I missing something here? Are there more lucrative pools out there? What’s the payoff to having a Daedalus wallet besides contributing to the security of the Cardano network?

It seems like there are multiple ACL pools and if you choosen the one with low stake (500k), it seems likely that this pool didnt produce a block every epoch and thus it didnt pay rewards each epoch.

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if you are staking with smaller pools you need to average it out over a longer time frame

this is especially true if the pool in question has less than 2m stake total as they are likely to not mint any blocks every now and then

that being said i think the most lucrative is 2m - 10m pools with a low fee and solid infrastructure, if the pool is minting all blocks allocated you are likely to end up ahead when compared to a large pool imho

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Sorry, but I disagree. For your information, this is my disclaimer on my website:

I do not recommend you stake with Terminada pool yet because the protocol does not allow setting the fixed fee any lower than 340 Ada.

With a fixed fee of 340 Ada you will lose too much of your rewards to fees until the pool size is over 10 million Ada.

Unfortunately, the protocol is designed so that delegators will earn less rewards with small pools. A “small pool” will soon be one with less than approx 5M Ada, but only if they choose to reduce their minCost to equal the minPoolCost parameter, which is reducing to 170 Ada starting next epoch (2023-10-27, 21:44:51 UTC).

what you aren’t taking into account is the far more significant rewards from getting overallocated blocks in a given epoch compared to a large pool where an extra block or 3 makes little to no impact to epoch rewards

this overcompensates the min fee handicap for small pools, at 2m you may be cutting it fine but certainly not at 5m let alone 10m

my pool has some of the highest rewards because of this phenomenon and i’ve rarely been above 10m

What makes you think that all small pools get overallocated blocks? It’s random. Other small pools will get less blocks allocated than would correspond to their stake, sometimes for a long time.

it’s not that they get more it’s that the difference in rewards is far more substantial when they do

It is just as substantial on the downside as the upside, because that is how randomness works.

Small pools will average out over time to produce less rewards for delegators. This effect will become relatively tiny when a pool gets bigger than 5Million Ada stake (assuming they charge a minPoolCost fee of 170 Ada from next epoch).

rewards per block are not random, they are largely static

that is where the benefit is

getting more blocks than expected doesn’t give large pools anywhere near as much as a reward differential when compared to small pools

if the pool is consistently making blocks and on average as lucky as a large pool then they are going to be more profitable for delegators, this is of course assuming both pools are set to 0% margin

@franco The only reason I am responding is because what you are saying is not only incorrect, but it is misleading to novice users.

it really isn’t, maybe you just don’t understand what is being said

For any one interested in accurately predicting their average returns from any pool, they can plug the pool’s numbers into this awesome staking calculator:

The calculator syncs with the blockchain to obtain live data about stake and prints a table of the last Monte Carlo Simulation over 1 year (73 epochs) displaying the average delegator returns.

Here are a few worked examples for different sized pools all with the same pledge (100K), minFee (170) and variable fee (0%):

  1. A pool with 500K total stake, will reward delegators an average return of 2.32% per annum.
  2. A pool with 2M total stake, will reward delegators an average return of 2.72% per annum.
  3. A pool with 5M total stake, will reward delegators an average return of 3.01% per annum.
  4. A pool with 10M total stake, will reward delegators an average return of 3.12% per annum.
  5. A pool with 68M total stake, will reward delegators an average return of 3.23% per annum.

that simulation doesn’t take into account small pool bias in slot battles

Your information is old. Slot battles no longer favour small pools.

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Ok, thanks that’s helpful

Sorry, but how is it low stake? By your chart it’s 20.74 million. Looks like the APY should be over 3%. Unless I’m reading it wrong.

As you see there are 4 pools with the same ticker. If you delegated to the one with 433k stake, you would only earn 1,31% APY.

Right, but I delegated to the one above it (ranked 108 at the time).

Also, all of you are talking only about the amount of ADA staked in the pool. Doesn’t saturation also have something to do with it? I was told to avoid oversaturated pools (even over 60%), which is why I chose this ACL pool, currently at 28.8% saturation.

Thanks for posting this. Here’s what I get when I plug in my stake pool. Should be making about 3.25%, but like Franco says, probably need to average it over a longer time period to see these results.