Need to adjust the 340 ADA fee to be competative

Hi there,

I was curious on other peoples views on this. If you are a small SPO with around 250k to 1M in stake is it not the case that we will always be uncompetitive with big pool operators because of the mandatory 340 ADA fee that gets paid to the pool operator. Since a small operator is only ever going to produce at most 1 block in an epoch (99% of the time) then the 340 ADA mandatory fee is a huge percentage of the payouts so why would a delegator invest with a small pool. A large pool for example will have several blocks in each epoch so this 340 ADA only applies to one of the blocks and the delegator gets a much bigger percentage from the other blocks minted. Overall they will do better in a larger pool. The only way to address this would be if the smaller pool could reduce the 340 ADA fee but then I guess how would any small pool operators make any money then.

1 Like

Don’t think this is nessesary to be competitive, big pools will just lower there own fees to yours.
So this solves nothing, you as SPO just get less fees when creating a block.

Stake will only come “when” you create blocks.
I know its hard, I luckily got a block slot for next saterday with 420k. Will be my second block, so hope get some extra stake after that.

Below 1 Block/Epoch 33% of rewards are going to the owner which hurts ROA from a delegators perspective.

To get good rates >3mio Stake is required.
If Operator fees where less it would help.
There are some Threads around this topic already and also an improvement proposal. Will link that later.

1 Like

Delegators get less that is correct.
But if all pools set there fee’s to the new minimum it stil isn’t more competetive.
Blocks need to be made to attract delegators imo.

Not sure how this can be adjusted but we need it such that the delegator can get the same rewards (over a reasonable time) irrespective of the size of the pool

Problem still is that you need more than 2/3m to get blocks almost every epoch.
No one will stake with a pool with only 10k for example even if they have 0 fees, they will not produce blocks. Even with 100k stake, avarage block is 0.1/ epoch.

Yes I take your point but I am thinking that it is probably not right for some operators to advertise that small pools will eventually give the same return for delegators as large pools as they generally won’t. I was under the impression that they would but having considered the maths I can see that they won’t. Anyway hopefully some changes will come in time that might help small operators

With a 0 fees and low stake, at least patient delegators knows that they will get their fair return at a point, even if it takes many epochs.
With a 340 fees and low stake, even patient investors realize they are probably never got a see any return, even in 1000 epochs. All being eaten by the fee.


Lets calculate 850A reward per block giving ideal ROI 5,5% and 2 pools 0% margin and minimal fixed fee, one mints 1 block, the other mints 50 blocks per epoch.
Variant current - Min fixed fee 340
Pool 1 850A, SPO reward 340 = 40%, delegators rewards 510 per block =~3,3% p.a.
Pool 2 42500A, SPO reward 340 = 0,8%, delegators reward 42160 = 843,2 per block =~5.46% p.a.
For a whale delegator with 1MAda the yearly difference is 21000Ada
Variant 2 - Min fixed fee 50
Pool 1 850A, SPO reward 50 = 5,9%, delegators rewards 800 per block =~5,17% p.a.
Pool 2 42500A, SPO reward 50 = 0,12%, delegators reward 42450 => 849 per block =~5.49% p.a.
For the same delegator the difference is only 3200Ada.
With lower minimal fee the smaller pools become way more competitive.

1 Like