Hi.
I’d like to setup a pool but I’m confused about how many ADA do you need to run a node.
Is there a minimum ADA amount?
Do you have to attract to others to delegate on your pool?
What happens if you don’t meet the pledge (don’t attract people to your node)?
What’s the expected annual return compared with simply delegating to another pool?
There is no minimum amount needed to pledge to start a pool. When you register your pool, you do need to submit 500 ADA (plus small amount for a transaction fee) to the blockchain in order to register the pool. That 500 ADA is a deposit. It is refunded to you should you decide later to retire your pool.Yes, you need to attract others to delegate to your pool if you want any chance of success in minting blocks and getting rewards. Very small pools will have extremely small odds of minting blocks. If you don’t meet your pledge then your pool will never be selected to mint a block. Annual returns for stake pools have been estimated in the 3 to 5% range. You should also take a look at the Staking Calculator: https://testnets.cardano.org/en/cardano/tools/staking-calculator/
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Thx.
I’m really confused about the calculator. If you select run a stake pool and pledge 10000 it gives you 2000%!?
Stake pool operation rewards
ADA (₳)
Yield (%)
Yearly
₳ 201,240.193644
2,012.4019%
Delegation rewards
ADA (₳)
Yield (%)
Yearly
₳ 5,814.089932
58.1409%
Selecting delegate gives you 5.1% which makes sense.
So it’s much simpler to just delegate right? What’s the benefit of running the stake pool? Aside from playing with the tech and contributing to the network?
You should click on the “Advanced Options” for the calculator stake pool. The defaults make a lot of optimal assumptions that will not hold true for the vast majority of stake pool operators. For example, it sets the stake pool operator percentage at 3% but also assumes that you will be able to attract 124,449,934 (124.5 million) ADA from your delegators. It also assumes only 150 pools and 100% pool performance. Those are all lofty goals given that by the time the first epoch ends we’ll have probably close to 1000 pools already. Running a pool is not trivial work. It entails learning a lot about networks, Linux, and system administration. On top of that, then you need to be able to market your pool so you need good website and promotions elsewhere. Delegating your ADA is certainly a hell of lot easier but if you’re up for a great enriching challenge, then definitely give stake pool operation a shot.
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Thx.
That’s a lot of assumptions…
I’m a devops engineer, that’s not a problem, the problem I see is in promoting it…
We’ll see!
Thanks!
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