Hypothetical question about pool setups

Hello -

I am wondering if there is any difference from the standpoint of potential block minting between the following two setups:

  1. A pool (XYZ) that has a 300K Ada pledge.
  2. A pool (XYZ) that has a 10K Ada pledge, but then has a separate wallet with 290K Ada in it that is a delegator to pool XYZ.

Both live stake amounts would be the same (300K), so is there any difference to the pools potential performance? If not, then the latter seems “safer” to me as you do not need to have a large pledge wallet potentially available on a Core Node and can just have a small wallet there (of course taking the necessary precautions with cold keys still) and delegate a separate wallet to your pool safely through Daedalus.

According to this there is a …

a0 - pledge influence factor (can be between 0 and infinity)

in the reward formula


However, I believe that this hasn’t been implemented yet, and will not for some time.

Your block producer node does not need to have the payment.skey for your pledge, which would be needed to create Tx for that address. It does however need to have the stake.skey in its setup, which gives access to the rewards.

Also please consider that …

Pledging is an important mechanism that encourages the growth of a healthy ecosystem within the Cardano blockchain. When you register a stake pool you can choose to pledge some, or all, of your ada to the pool, to make it more attractive to people that want to delegate. Although pledging is not required when setting up a stake pool, it can make the stake pool more attractive to delegators, as the higher the amount of ada that is pledged, the higher the rewards that will be paid out. The a0 protocol parameter defines the influence of the pledge on the pool reward.

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Thank you, Tom. Is there a place to officially check what value the a0 parameter has? I’ve read a couple articles stating similarly to you that it’s not implemented yet, but I’ve also read a couple that say its set at .3 with the release of Shelley… It would be great to know for sure?

This has been talked about during the 1.25.1 SPO update call and if I understood correctly it would require some sort of fork to implement it which is currently not the highest of priorities.

You can get the protocol parameters on your node with the following command:

cardano-cli query protocol-parameters
–out-file protocol.json

(Source: 3. Create a simple transaction — cardano-node Documentation 1.0.0 documentation)

adapools.org also has this info on their site:
Protocol Parameters | Cardano Staking

@gsxrboi600 Sure, but is the effect of a0 really implemented - AFAIK, it’s not. Anyone out there, who knows for sure (i.e. lets see the code).

Hi Tom - I have since done some research and confirmed a0 is set to .3 - There was a command to query the blockchain in order to see what values every parameter has but I have lost the source for that. That said, you can see them here as well:

@mcvetyty yes, I know that a0=0.3 is part of the protocol parameters, but does it really have an effect (i.e. is it implemented)? All else being equal, would a pool with a higher pledge really get more rewards than a pool with less?

You can look for the code on their github.