Best Rate Offer / Fixed Income Sharing
Today we updated our website to represent the new “Best Rate Offer”.
This offer starts in Epoch 273 for all Delegators who already have active stake and new Delegators as soon as the stake gets active (2 Epochs after delegating).
The above chart shows how the offer works in a simple way. We set our fixed cost as low as necessary to match ROA of the average Top 100 saturated pool + 5%.
Currently this results in a 5.16% rate with a 19 ADA fixed cost.
As the network does not allow going below 340 ADA fixed cost the remaining 321 ADA are distributed to our delegators by us.
In a series of good news, I’m happy to announce that we minted our first block today!
This is an important step for us! We celebrate it with a 200€ donation to Lobby16 - supporting unattended young refugees in getting education and work.
Quick facts about our pool:
- Climate Neutral Blockchain Alliance: Our servers run on renewables and compensate the remaining CO2 impact by planting 10 tropical forest trees which makes it CO2 neutral for the next 60 years
- Mission-driven: We support social stability by donating to organizations like Lobby16
- Decentralization Pioneer: We host our servers in 4 countries on 2 continents. One relay is hosted in Ethiopia / Africa. Being a single pool operator is the basis. Involving new hosting partners in new countries is our additional support for decentralization.
- Competitive Rate: We share our fixed cost to be competitive with the biggest pools.
- We are still a small pool with ~460k delegation. So we will mint a block every 2-3 Epochs.
The Vital Stakepool is just at the beginning and we want to get a Vital Part of Cardano. We run our pool in a responsible way and want to achieve delegation by stakers who believe in us.
And I think we have the best delegators ever with a 100% Loyalty measure on AdaPools. Thanks to everyone who is already delegating with us!
Pool performance requires high availability and the elimination of bottlenecks. We are confident to not waste assigned blocks and therefore give a Block Guarantee. If we miss a block we stand in for the missed rewards! This compensates the native rewards of max 1 Block / Epoch. We reserve the right to change the offer without former notice.
This complements our offering to the following chart. Our Slogan “Responsible Staking” is reflected in every aspect of the pool.
We compared our Best Rate Offer against a 1 percent pool. Based on our fixed cost-sharing we achieve the same ROA as the 1 percent pool when it is fully saturated. This means we provide the same ROA as the maximum the 1 percent can ever achieve. More unique benefits in the chart! All numbers are 100% luck calculations.
Please note that we are not explicitly referring to a specific pool. Just any pool which runs a 1% margin and 340 ADA fixed cost.
All details about our offer can be found on our website: Best Rate Offer | VITAL Stakepool - Responsible Staking
As there were some critical comments about our AD yesterday I want to clarify any potential concerns:
Question 1 - Achievability: Is it realistic that a small pool can achieve 4.91%. Are we over-promising?
The best way to compare the achievable ROA of a pool is by comparing the cost. Cost is the percentage of rewards that go to the pool.
A fully saturated 340+1% pool has a cost of 1.77%
With our margin of 1.5%, we are able to stay below 1.77% but with a very small fixed cost of only 2 ADA.
Question 2 - Timeframe: Aren’t you comparing 2 different things (current benchmark rate vs best possible ROA of a 1 % pool)
This critique refers to a different timeframe basis of the rates we are comparing.
Benchmark Rate is calculated based on the average ROA of 2 Epochs before the current one. Luck is averaged out by using 100 pools.
Possible ROA of the full saturated pool reflects the average returns of a reference 340+1% pool based on the current network parameters.
This means: In the upcoming epoch we generate equal ROA the reference 340+1% fully saturated pool. This is valid for Epoch 278.
In the future, we can and will achieve this rate as well if the benchmark rate is over 4.91%.
If the top 100 pools + 5% are performing worse we will orient on this lower benchmark rate.
If the top 100 pools + 5% are performing better we will also orient on this higher benchmark with a limit of the maximum we can achieve is a 1.5% cost, sharing all our fixed cost.
Question 3 - Benchmark Rate: Why not averaging the benchmark rate over the last 10 Epochs
The Potential Rewards are depending on changing variables, especially Rewards / Blocks and the Total Staked ADA which influences Block chance.
If we would look 50 days back the block rewards were higher and we would not be able to achieve these historic rates.
Question 4 - Benchmark Rate: Why is the benchmark rate based on pools with very diverse parameters, especially margins
The idea of the offer is to make sure we provide the best possible rate we can achieve, but not paying more than the best 100 pools.
This means if the Benchmark Rate goes into a range which we cannot achieve we will distribute all fixed costs to generate the best possible rate.
This can happen because we are adding 5% on top of the top 100 pools rate which is only possible because the top 100% pools are not perfect.
Some have high margins (e.g. Binance 6%), some are oversaturated. This is why the 5% add-on so far was always possible. But it would not be if all the 100 pools were e.g. 0% pools.
In that case, our cost of 1.5% (minimum) would be higher than the theoretically best possible cost of 0.77%, if all top 100 pools had all 0% margin and 64M active stake.
After all, it seems my approach is complicated to understand as many dynamic aspects are considered in the calculation.
We provide full transparency of the individual delegator’s returns calculation in our Google Sheet and show aggregated numbers in our Mobile App.
The intention of this AD was to show that we are able to achieve top rates and showing this on the example of the current provided rate.
Also, it is important to state that the offer is limited until 30.9.2021. After this, we commit to a maximum of 100 ADA fixed costs.
This 100 + 1.5% is of course increasing the cost of the pool depending on the saturation level which we can reach until then.
Epoch 278 Rewards were paid out today. Since the launch of our Best Rate offer, we have generated an average ROA of 7.37%
We are part of the following alliances. Being part of the community is a giving and taking experience.
Together we are stronger!
Our active contributions:
- Donations Reviewer at the MDP
- Technical Research at the xSPO
- GitHub Repo Maintainer at the CNBG
- Initiator of the CDP
October - VITAL Delegators Update was published today: Pool Updates | VITAL Stakepool - Responsible Staking
With this, we are also switching to a 100 ADA fixed cost approach. As Cardano still does not allow to set fixed cost below 340 ADA we are distributing 240 ADA to delegators to achieve the 100 ADA fixed cost.
Not given an update for a while here. Much changed.
We received delegation from IOG and CF and therefore a happy to product blocks constantly now.
Still, we continue our Fixed Cost-sharing and Rewards Insurance.
Also, we were applying for the ASPA (Ardana Stakepool Alliance) and were accepted there.
We are very happy to be able to support their mission of bringing a stable coin and low fee stable-coin swapping to life. This will unlock enterprise use-cases in the long run and there is a really important building block for Cardano’s future!