Cardano’s min_pool_cost is a key network parameter that ensures stake pools remain sustainable and the ecosystem thrives. It sets a minimum fixed fee that stake pool operators (SPOs) must charge, guaranteeing baseline income to cover operational costs like servers, electricity, and maintenance. Without it, pools might slash fees to unsustainable levels, risking shutdowns and instability for delegators.
For example, Lido Nation’s pool (ticker: LIDO) operates with a min_pool_cost of 200 ada. This ensures the pool can sustainably support its infrastructure while distributing fair rewards to delegators. Originally set at 340 ada, the parameter was reduced to 170 ada in 2023 after years of community debate. Discussions continue about whether further adjustments are needed to balance competition and network health.
Whether you’re an SPO or a delegator, understanding min_pool_cost helps you make informed decisions while supporting a robust, decentralized Cardano network.
Link to full article: lidonation.com