Cardano Staking Profits Calculator

They have better than an economist, they have game theorists! its a field of mathematics …
"Game theory is “the study of mathematical models of conflict and cooperation between intelligent rational decision-makers”. Game theory is mainly used in economics, political science, and psychology, as well as in logic and computer science.

So when you create a system such as cardano which it shared in resources and distributed you need game theory to manage the system in more efficient way than an economist could in my opinion

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Good point. Although, I have to say, the assumption of rationality is, perhaps, the most dangerous one in designing these systems. The network should be flexible enough to ‘tolerate’ a certain amount of irrationality, because, well, people (including governments) are not rational.

The best way to induce rationality is to attach some real costs to it. I am sure this will be part of the equation and I am looking forward to see how it’s implemented.

I’m sure any our speculations (myself included) would cause Prof. Elias Koutsoupias to be like:
image

And would sound to him similarly as any non-professional speculations would sound to any professional in the same field. I’m sure an Oxford professor with a Gödel Prize for “laying the foundations of algorithmic game theory” can figure when and to what extend to assume rationality, and how to incentivise people :slight_smile: So waiting for his science paper on incentives in Cardano would be the best strategy for now.

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You have an interesting sense of humor. I like!

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Indeed indeed, by the way the

Is just amazing, you made my day

Right now I don’t have any ADA in my Daedalus wallet, when I transfer some ADA into the wallet, will there be a staking option within the Daedalus wallet so I can specify how many ADA I want to stake

Thank you

Right at this moment - no. Full staking is expected to go live in Q4 this year. Then it will work exactly as you have described.

Btw, it is advised to keep your ADA coins in the Daedalus wallet, cuz exchanges can be hacked at any moment, especially if you own a considerable amount.

@vantuz-subhuman Excellent job, not sure if already requested, but would be great to have an option to calculate re-staking per year (compounding) over a period of time (years).

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Hi, @NinjaPool_io! Thank you for the feedback! There’s a little roadmap page available in there and yeah, there’s restaking calculations planned to be implemented :slight_smile: Yearly restaking in the nearest version, and then “per-epoch” restaking a bit later down the road =) For now lack of restaking is mitigated by unchanging total-stake, meaning that your profits with a fixed stake also calculated against fixed total stake, so stake share remains the same. When user restaking will be implemented - total stake amount will also be made dynamic so as time goes - total stake will be increasing a bit, including the “other people’s restaking”, so user’s share will generally also remain the same, and only will change if he “refuses” to restake - in this case his share will slowly decrease :slight_smile:

https://antipalos.github.io/cardano-calculator/#roadmap

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This profit calculator should be pinned somewhere in the forum. It’s a great tool for new comers to test their assumptions without having to plow through numerous posts. Great work!

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Hi,

Just trying to get my head around the numbers here. So if we take 2019 as the first year when rewards will be available (roughly), shouldn’t we have matching inflation number at the end of the year? So if we assume 5% reserve reduction–shouldn’t we have 5% of the total reserves minted for 2019?

Also, a small remark: is there a way to add pool fees in USD at current ADA/USD rate? this would probably make more sense, rather than abstracting these away with percentages.

Again, thank you for the work you put into this.

Thank you for your kind feedback, @ZCryt0Knight!

But, if I understand you correctly, this is exactly what calculator is showing :slight_smile:

image

Numbers to the right of the input-field show that ~694.4 million ADA is issued during the selected year (2019 in this case), which constitutes ~2.23% inflation on the total supply.

If by “total reserve” in this case you mean the ~14 billion ADA that are yet unissued - then you are right - during any selected year (each year) this reserver will decrease by selected percentage, in this case - by 5% - and the reserve will decrease with each year. This is exactly how it works :slight_smile:

But if you mean that there should be 5% inflation on the total supply - the ~31 billion already issued ADA, and the number that will grow each year - then it is not correct. The beauty of the system is that total supply inflation is not fixed, but rather it will be decreasing each year: ~2.23% in 2019, ~2.0% in 2020, ~1.9% in 2021 (if the reserve decrease is at 5%). This way - the reserve deflation stays fixed (5% decrease each year), but the supply inflation is decreasing each year, so each year the number of “released” coins is getting lower and lower - the same as with Bitcoin but much more smoothly.

Hope it helps :slight_smile:

It is a nice feature that I may consider adding in the later version, but there are a lot of complications immediately getting into calculations the moment you are trying to make it “an open system” with external unpredictable parameters mixed in. The first and foremost problem is that pools are expected to change the fee size as price of the ADA changes, according to their current expenses compensation needs. This means that actual fee size historically will be an unfixed value, like a function of pool maintenance cost and current ADA price, and since I have no way to of predicting the price - any calculation including it, I’m afraid, would be somewhat deceptive :frowning_face:

But I understand what convenience this could achieve, so I’m gonna think about it more. Maybe I could introduce an alternative pool fee calculation way, where user himself sets the “current” price of ADA in USD (like the current year) and also sets the required compensation in USD - and then system would calculate how much coins they would exactly need and what percentage that would be.

I actually have the “Calculator for pools” item planned for future versions in the roadmap, and I think this would be really useful in there :slight_smile: Even if I add this option for “normal” users - then it will probably be under the “professional” selector that opens even more parameter option than there already are.


Btw, according to the latest London meetup (the one with Aggelos Kiayias), actual fee calculation for pools is expected to be somewhat similar to this idea - they will specify two values: “the maintenance cost” (that they need to cover in any case), and also the “desired profit level” (on top of the maintenance coverage). And then the delegation system will “automatically” calculate the optimal fee in coins and distribute the rest among the stake-owners (delegates).

For now we are mainly working on the “user experience” :slight_smile: with the calculator and are waiting for the delegation paper release to settle with the real formula. The moment this paper is released - we will be implementing changes in the calculator :smiley:

That makes sense now. I thought the 5% was total inflation…I should have looked closer at the calculations.

That’s correct. Instead of just specifying a percentage of profits, we could estimate the pool costs + profits in USD and translate those into ADA at current price (maybe you can pull live prices from a source as an initial input) to see what portion of pool profits we would have to ‘give up’ to stake through pools.

It would be handy if we want to evaluate pool staking vs. solo staking.

Cardano Calculator - release v0.1.1

Changes:

  • Design improvements and mobile layout
  • Localized number formatting
  • Default tx-size changed to 350 bytes
  • ADA favicon added

Link: https://antipalos.github.io/cardano-calculator/


Note, that you may have to do the “force-reload” to see the new version in your browser. User Ctrl+F5 or Cmd+R

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Is there a way to add solo staking into this calculator? Given electricity costs, and the probability of being chosen a slot leader, I assume there will be some ADA amount above which it wouldn’t make sense to delegate your stake.

It would be really cool if the calculator could show monthly solo profits and break even electricity costs.

Given the risk that some stake pools may behave dishonestly, some people may choose to solo stake if the difference in profits isn’t large…

What would stop a staking pool from distributing its 2.5% (or whatever) of the 1% it gets if K=100 in distribution of rewards in pools. It can know whatever addresses stakes to the pool and can then redistribute reward to them. (For example redistributing 1% for a competitive advantage over other pools)

It’s a bit more complicated as there are different types of nodes are going to be involved in the staking.
For example, Daedalus wallet which is an Edge node, cannot stake but the core nodes which are the only delegates in the Cardano network.

In addition, core nodes should be protected, which needs additional network infrastructure, the privileged and unprivileged relay nodes.

Also, we do not know yet, what is the node requirements for staking. Might be one core w/ at least one or two privileged and/or unpriviledged relay node.

I would recommend you to read the following List of Cardano / ADA staking pools

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Hi subhuman! I’ve read some of your replies and posts and appreciate your knowledgeable feedback. Not sure if you’ll know the answer to this question. When staking becomes live will you have to sign up and get approved through Cardano to be a pool leader? Will you be able to select this option through the Daedalus wallet? Would it be a program you download and run on selected computer/server?

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Hello!

No, Cardano is an open-participation system, so you son’t have to ask for anyone’s permission, you can just set-up a full node (even a one you wrote yourself) and be elected as a slot-leader.

There’s no official info on this part yet, but I doubt greatly that Daedalus will allow you to participate in staking. Most probably you will have to run a separate full-node software.

Yep. You will need to download something like Cardano-SL (the Haskell full-node), or Prometheus (the Rust full-node), or any other potential alternative implementation and run it on your server. Just have to configure it with your staking keys and that’s mostly it.

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https://antipalos.github.io/cardano-calculator/

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