Ok so I have my Stakepool up and running and trying to get up to100k of ADA which is a combination of pledge and stake. Now this is trivial money compared to the big pools but my question is does the Cardano Foundation even want small operators like me to try. It seems apparent now that minting blocks on this investment is near impossible. Ok I set my pool up out of interest but unlike Proof of Work small investments could still make small rewards - are we saying that there is no point in setting up a Stakepool with a low investment? By the way 100K is still 10,000 USD or thereabouts and is a lot to me.
If you are doing it for the fun of it like a hobby for the experience and knowledge you will be fine.
If you are trying to make profit, unless you are all ready very well off and can afford 1mm ADA to pledge or have a large social following that you can solicit to that is willing to purchase and delegate ADA to your pool with than you don’t have a chance.
Thanks - but is this the view of the Cardano Foundation? This is coming across like they don’t care about small operators as they don’t have a chance. I would like to think that the people behind the project would want to encourage small operators to get involved and given time and patience then they may be rewarded. Ok I am not talking about getting rich, I am just talking about making the occasional reward just to add meaning to it. I never made money from mining Ethereum but it was nice to get the occasional Eth to know that it worked.
Only the Cardano Foundation can speak for the Cardano Foundation. From their actions it appears that they are randomly selecting 10 pools per every other epoch to delegate roughly 64mm to which is nice. Than moving it to a different 10 and so on.
From past AMAs CH spoke like it would be possible for a single mother in Wyoming or wherever to be able to start a business running a pool. There was such conviction and pride in his eyes so he must have believed it. Today, unless she is all ready a millionaire and can invest 750k USD into pledge and infrastructure and marketing she probably won’t get too far.
Will it always be the way it is today? Probably not. Delegators seem to want best return over decentralization. Once params change to force the spread of ADA amongst more pools and assuming current larger SPOs don’t just make another 20~40 smaller pools for themselves it should all even out.
If you can work your way up to 500k ADA between pledge and delegation you might hit often enough ( about once every 12 epoch) to break even on monthly server costs.
Thanks - that is really useful information. It would appear then that the best thing to do is try an maintain a reliable pool and build up stake if you can. Yes your odds of minting a block may be low but there is always the chance of getting a large stake on a random basis from the foundation.
I do agree with you, particularly as the number of stake pools operating per epoch is increased and as the volume of transactions goes up.
If Cardano is truly successful I believe the disparity between whales in the stake pool world and small stake holders will be minimized. If I understand the tokenomics of this stuff it should progressively become more difficult and/or expensive to try and be a big whale.
Having said that, I don’t believe whales will ever disappear. People who work harder and more competently than others will be rewarded more.
This may be stating the obvious, but sometimes the obvious needs to be pointed out.
Wealth and competence are not mutually exclusive
Infact they may be inversely correlated sometimes You do not need to look too far to find such instances of people …(DT…?). The reward distribution of algorand is far superior. There the HODL automatically gets you reward nothing to be done. And in the end the HODL if implemented in proper way can be lead to wealth creation via auto lock in of Tokens (and hence respecting the time value of tokens). And on top separate incentive structure for the stake pool operators can be created. (ALGORAND has done that. MIT guys are smart …). The current incentive structure means that people with big mouth (marketing gurus) will win over technically good but unable to bring in the finance / marketing edge. This is the reality that we see today. Just my few bits …maybe wrong …but some discussions may lead to improvement …who knows.