Current Operators....Actual Cost to Operate vs Actual Returns thoughts?

OK, but you didn’t address my main point.
You assume that the costs of running a pool are only in the out of the pocket costs of the the servers. I assume you expect all pools operators to invest their time and expertise for free. Lucky for the network, most pool operators are incentivized in a more economically sane way so we can be sure they are professional and will continue taking care of the network, knowing their expertise and time is paid for accordingly.

An as you mentioned above, the minimum fees where set when ADA was a few cents and that is why this is being lowered soon. But still, this is a minimum not covering what I am pointing out above.

So to summarize, sure it’s great that lots of people are willing to start a small pool and want to be competitive and therefore it would be nice if the fixed fees would be lower, which they will be soon, but in the long run, we should expect to pay our operators also for their time, if we want a resilient and flourishing network.

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I guess, we’ll see what actually happens with the fix, a0, k and other changes to the reward formula and how that effects how SPOs want to run their pools.

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I am afraid your calculations are way too optimistic.

  • Pools (serious that is) will not get away with 60$/month of infrastructure.
  • Long term commitment also involve way more than just server rental. This means taxes for professional revenue, legal framework and accounting.
  • Time invested by one or more (preferable) people.

Nonetheless, I understand what a free market is and best of luck to anyone out there !

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No problem, you can plugin the numbers that work for you. I’m not claiming that running a pool should cost this or that and because I haven’t yet seen convincing evidence that $2040 are actually needed to run two simple servers (especially not on RaspbarryPi4) we decided to give our excess back to loyal delegators.

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Raspberry won’t cut it if you plan on staying around for the long run. My 2 ada.

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Agreed. “staying around” is the main point. To stay around for the long run almost always means, good and consistent investment of time and material. The rest is marketing in my opinion to attract delegators so that pools can stay around. And when they get the delegators, they need to increase fees and stop giving back, since that is needed to stay around while providing good quality service.

For the time that ASTOR has been around, RaspbarryPi4 did cut it, then it didn’t for a while, then it did again and I’m quite happy to adjust the setup to wherever the mood of the network takes it. In all case, we can adjust the payback amount accordingly. Currently, it’s quite a bit, with Alonzo it’ll likely be lots more and perhaps some day the scheme may become obsolete. In any case, we are committed to only charge what we actually need. Again, I have not yet seen convincing evidence that $2040 are needed.

I don’t care much about the $2040. That is mainly due to the high minimum fixed fees which will change soon. What is more important to me is that I don’t believe in sustainable pool operation for a couple of dollars a month. We see that in normal business all the time. New businesses starting and giving everything away for a discount to attract customers. Which is fine as long as they don’t go bankrupt or deliver the quality that matches their prices. Disappointing their customers along the way.

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I am against charity pools. Charity doesn’t work. It is a means for the rich to massage it’s gilt but continue to screw the poor. I have seen many a country ruined by charity.

In a decentralized system the goal should be for each individual to be able to run once own staking pool.

Every work done to enhance the network security should be compensated but not in perpetuity. That is should not be the purpose of an open decentralized system.

The argument that SPO is just like any other business and one must work hard to succeed is the same argument used by the present economic system, where some are born privileged and destined to stay ahead and others are not.

If we let the pre-existing advantages such as geography and money in the bank decides the outcome of the SPO competition then Cardano will quickly evolve in to a centralized platform and enabler of centralization no better than banks increasing the gap between the poor and the rich, which already is happening.

Moreover increasing difficulty for the disadvantaged doesn’t help network security which should be the only consideration in designing a distributed system.

In this regard Alogorand may have better design than Cardano.

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ETH2 has a system with currently 138000 validators and still some pending

Of course, they also have a limited number of blocks to mint per epoch and a maximum of ETH they can distribute among all validators. As a result, a validator can propose a block about every three weeks and in between receive rewards for attesting blocks from other validators. You currently need to have 32 ETH (i.e. $128k) to take part in this. I quite like this approach, because it does not put validators into a competitive position against each other. If a validator fails to propose it’s assigned block it gets slashed. So, you still needs to know what you’re doing on top of providing that initial stake.

The Cardano POS system is designed such that all stake will (eventually) cluster in k saturated pools. With k at 500, it means that > 2000 pools will be driven out of business in a more or less painful way. These are the fundamentals that folks sign up for when starting a pool. One could call for an increase of k, but (because there is no notion of attesting) there is an upper limit beyond which it’d be nonsensical to increase even more (i.e. there are 21600 blocks to mint / epoch). It would however not solve the “problem” for folks that are not among the “privileged” k - not matter what k actually is.

It is easy to say “It should work like this or that” without having done a fair bit of academic research and game theory. I suspect, that over time POS will evolve such that it does not only work for the network, but is also socially sound in a way that SPOs get compensated for what they actually do (but not more).

In this regard Alogorand may have better design than Cardano.

Lets hear, in what way that would be so.

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What do you propose then, socialism? There is no such thing as a free lunch.

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No! fair playing field. The barrier for participation has to be removed. At the moment the Cardano consensus encourages centralization, by allowing a pre-existing inequalities to determine allocation of future rewards. Right now not only once salesmanship, or how many rich friends one has, but the geographical location of staking pools determines success. That is the system we are trying to leave behind.
We may try not acknowledgement but a royal class is emerging in Cardano.

That said I do acknowledge the dilemma the designers have in creating the necessary network effect for the platform to succeed, which needs the privileged, preventing Sybil attack and making it fair for all to be able to participate.

And I hope the “royalties” who are fairly compensated by now and holding large stakes will not be greedy to let the present barrier to continue. I am grateful for the work they did.

“…The Algorand platform requires minimal processing power and modest IT resources to join. All online users who possess algos are automatically eligible to participate in block consensus…”
As I said on another post this may have difficulty reaching the network effect, but Cardanos goal should be to make running a staking pool automatic with owning a stake.
The hardware or geography or the ability to control code should not be a pre-condition. And we do that not for charity or even to be fair. Decentralization is required to have a healthy network. Monopoly in any form weakens the network.

With Cardano we call this delegating your stake… By delegating your stake you will get the same amount of return as you get with Algorand (about 5% annually). With Algorand running a relay node (as they call them) will grant you no additional rewards. And there are currently only 100 relay nodes. So what exactly is your point? You can just stake your ada with a pool. easy and risk free. If you want to run your own pool and have the potential to earn a bit more by attracting delegators, you can do that with Cardano. Something you cant do with Algorand.

That said, Algorand is a great project in my opinion.

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Free lunches DO exist. I bought someone lunch today. To them it was free.
Free ALWAYS means from the perspective of the person receiving the good or service.

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Ah, it would be so simple in a world where thing are black or white right ? The problem is, realistically, it’s always layers of grey.

@tefera I understand your frustration mate, I really do. But currently, it’s easy to come with accusations on the cardano network being unfair. Try to really think of a system that would address all the problems, fit in the ecosystem & scale. And more importantly, is not an idealistic complete drift from Cardano. Cardano project have been clear from the start on what it is and how they want to do things (roadmap, etc …) so trying to do something else should be … well … done by doing something else, another chain perhaps ?

There are numerous forum topics around this subject. And yes there are issues, we all know it. But until someone comes with a brilliant idea, there is no point shaking the boat just for a sake of it.

BTW I’m a small pool owner like you and I try to fight with what I can.

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Until someone comes up with a brilliant idea the issue has to be raised again and again and again, lest it gets forgotten. You are within your right to ignore it. It is rude to ask someone to not raise a concern or ask them to leave if they do, incompatible with Cardanos motto.

Hey @tefera ,

I’m not being rude mate, and I certainly do not ask you to not express your opinion or raise concern. If that have been understaood this way, and out of pure peace offering, please accept my apologies. I was just expressing my opinion too.

If feel you, I’m on the same boat. Our pool is small, my team technical knowledge is strong and we try to improve our pool and the Cardano ecosystem on every opportunity that present itself.
I feel that our pool is more interesting for the Cardano ecosystem, in the long term at least, than a boobs pool or a script kid pool. And in that, and I guess that is where we meet, I feel we should be rewarded at the very least on the same level as those mentioned pools.
The pure fact that there is no pool rating on important factors (missed blocks, availibility, well architectured solution, etc …) but on meaningless factor (total stack, profitability (luck), etc …) is one of the issue imho.
IOHK delegation is an imperfect way of trying to fix this, Cardano Foundation is a far better way. But ultimately, both delegation systems try to fix a broken system, we do agree.

I just want to focus on getting things better and be positive and productive. I think, hope, that IOHK and Cardano knows the system is imperfect and even broken. I also deeply think they agree with the situation as it spread the Cardano/ADA word far quicker this way. Boobs pools and massive quantity of script kid pools are spreading the word, marketing Cardano freely.
The downside is that useful people, you, me, some other pools I know, feels left aside while those bloom and make huge profit, we are just struggling to survive.
The worst thing is they, most of the time, use our work to achieve this…

Related CIP: Prepay Min Fixed Fee CIP

My 2 Ada :joy: