Pool Cost Parameter for stake-pool registration certificate. Can I make it higher?

So the command to register a stake pool certificate with cardano-cli is below:

cardano-cli stake-pool registration-certificate \
--testnet-magic 2 \
--cold-verification-key-file cold.vkey \
--vrf-verification-key-file vrf.vkey \
--pool-pledge 9000000000 \
--pool-cost 340000000 \
--pool-margin 5/100 \
--pool-reward-account-verification-key-file stake.vkey \
--pool-owner-stake-verification-key-file stake.vkey \
--pool-relay-ipv4 xxx.212.xxx.124 \
--pool-relay-port 6000 \
--metadata-url $(cat pool_description.url) \
--metadata-hash $(cat pool_description.hash) \
--out-file pool-registration.cert

I noticed most pools set 340 ADA (340000000 lovelace) for the pool cost, but is this a hard protocol requirement. Could I set this higher? I know the minimum is 340, but what about the maximum?

I know what you might be thinking, why would I want to set this higher? Greed much?

Well, my reason for creating a pool in the first place (is to yes support the network because I believe in it) but also to make money as well. I’m running a two person small software business and for users that stake to the pool I plan to give them rewards in return with financial value to them (I.E my software tools that help traders). Therefore it makes sense in that situation that if I can set the pool cost higher it could be worth it as long as I’m up front about this to my users of the software that decide to delegate. The question is what is reasonable here? Should I just keep this at the minimum and use pool margin instead? When is an appropriate use case for changing the pool cost? (if I even can do it?)

To give you an idea my software tool usually sells for $300 with $50/month after 6 months, so my goal is to give the software away for free to users that delegate so more people can afford to use it and I can still survive to continue developing on it. Therefore if they delegate a certain X amount, it increases the chance of my becoming the slot leader and minting a block and getting the rewards, which is an indirect way of paying me so to speak while they still earn rewards as well.

My thinking is this reward is paid every epoch, which is every 5 days. At 340 ada, if I minted at least 1 block per epoch I would earn:

340ada x ~6 epochs in a month, for a maximum monthly earnings of (2040ada + margin + transaction fees). At current prices as of writing this ($0.26) this equates to minimum $530.4/month. My cost to run the server with 1 block producer and 2 relays is $60/month with contabo hosting, for roughly $470/month profit. This is not a lot now, but the value of ADA I believe will go up later and more importantly this will be consistent if I can mint blocks at least once every epoch or so.

I would appreciate your guys thoughts on the matter and thanks for your assistance!

Yes you can set the pool cost as high as you want. Keep in mind that you only get that amount if you are able to produce atleast 1 block per epoch.

It will be really difficult to attract stake if you have a high pool cost fee and a relativ low stake.


So if I increase the pool cost is that coming directly from the rewards the delegators would receive? Is it possible they might not receive anything if I set this to high? What would be an example of ‘too high’ in this case? I don’t want to take all the delegators money but I would like to earn more to compensate for what I’m giving them in return later. I’m aiming for a win/win scenario with the delegators. To be clear I’m not going the be as cheap as possible route to attract delegators, if I did this I would not stand a chance against the current competition, my only real edge is with the software tool I have as leverage and adjusting these parameters to be fair. I plan to create a youtube channel as well talking about cardano and trading to try and get delegators as well.

Yep exactly.

Lets make an example :
lets assume that you are able to earn 600 ADA per minted block.

If you are able to mint 1 block in a epoch and you have 340 min fee (pool cost), then you are able to distribute 260 ADA to your delegation. This means the min fee takes more than 50% of the rewards you are able to distribute.

Now lets make the same example but instead of 1 block in a epoch, you are able to mint 10 blocks.

10 blocks * 600 ADA means you would be able to distribute 6000-340 ADA, so around 5640 ADA to your delegators. Here the min fee is only a fraction of the whole pot.

So the min fee goes to the expense of the delegators.

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Thanks so much for your answer by the way! Another question, What is the average right now for ada you can earn per minted block on mainnet? Was that 600 just a random number you gave as an example? Is there somewhere I can look that up, I’m not sure where that information can be found on the cardano explorers online. Curious if you can link to an example?

Also can I do a new registration certificate to lower this cost in the future if I start to build up more delegators? I don’t want to be greedy about it if I start minting enough blocks.

Also I plan to pledge at least 200,000 ADA which should help increase the odds of minting a block a bit.

its about 480 ADA per block right now.


Yes you can adjust all your parameter in the future. Keep in mind there are 2 “fee” parameter, the min fee (pool cost) and the margin.

200k ADA is a good amount but just to make you aware, you will probably need about ~2M ADA to be able to produce one block per epoch per average. This also means that you will have a few epochs with 0 blocks and a few epochs with 2 blocks or even 3.

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Thanks these answers really help! I really appreciate it!

You are welcome. If you need anything else, feel free to reach out.

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