Can somebody please help me use the Cardano Foundation Reward Calculator?
I know it’s just an estimate, but the numbers should still make sense. To me they do not.
I have 1,000,000 ADA to delegate and am trying to get maximum rewards.
Here’s what I set:
ADA amount = 1,000,000
daily fee = 68
tx fees = 0
total stake pools = 500
operator reward = 0%
stake pool performance = 100%
a0 = 0.3
treasury rate = 20%
expansion rate = 0.3%
I varied just the stake pool operator’s stake (pledge) and the stake pool total stake (saturation). I made a chart with the delegation reward % results. Max rewards are in bold and underlined.
Looking at the reward equation here: Pledging and Rewards — Cardano Documentation 1.0.0 documentation
- Rewards increase with σ, but stop increasing once σ reaches z0, that is. once the pool becomes saturated.
- If a0, (the pledge influence,) is zero, this formula simply becomes R·σ’, so it is proportional to pool stake, up to the point of saturation. For larger values of a0, the pledge s becomes more important.
In other words:
- higher saturation, higher rewards (up to 100%)
- higher pledge, higher rewards (if a0 ≠ 0)
The numbers I generated using the calculator do not agree with statements 1+2. This is where I am confused. Is the reward calculator correct or is the reward equation correct or am I just completely misinterpreting something?
Any clarification would be appreciated.