A 16m pool has a cost per block (CPB) of 3.5%. If your effective cost per block (ECPB) was lower than that, your (small) pool would be more profitable than this highlighted chunk of pools with their respective stake.
I’m just letting you know that I’ve been looking into it and I do thinking making a Lite wallet that benefits smaller SPOs is not going to be as hard as I originally thought. I may not have anything usable for a week or two, but I’m aiming to have a testnet version as soon as I can.
I don’t want to give any details away until I know I can implement them, but the pool listing process will be to some extent random.
That is WONDERFUL news! I look forward to promoting its use. If all small SPOs get behind it, perhaps together we can make it #1.
“Pools are initially displayed at random; there is no ranking system. We believe that all pools should be given an equal opportunity to be shown in an unbiased way.” - ADATools.io
Culture shift comes from concerted action. Also adatools is great! I really like the world hologram view of the active relays! I will be primarily using adatools now and thereby voting with my digital feet.
The new typhon wallet allowing multi delegation may also be pivotal in supporting small single SPO’s hopefully the messaging encourages delegation in a healthy way for all SPO’s
Thanks for the feedback @map84, I really appreciate it!
In regards to the Typhon wallet I did have a look at that as I wanted to see if there was a solution out there before looking into creating my own. I do question a few things with it in particular the fact it’s not open sourced (not that I can see). So it’s really hard to tell the integrity of it; we shouldn’t have to take their word for it that it’s secure.
Another is the fact that other wallets haven’t managed to do multi-delegation which says to me they’re using a method that is not a standard way of doing it and therefore means you’ll have compatibility issues if you try to use your seed phrase in another wallet. I haven’t look into it if it’s even technically possible to do multi-delegation without cardano-node supporting it and with us not being able to see the source code it may even be fraudulent.
In the end though Typhon doesn’t solve the issue that smaller SPOs don’t get any fair exposure. From what I looked at it still shows some form of ranking system which can be open to bias / manipulation like ADApools.
The game theory assumes “rational behaviour” when delegators select their pools. This rational selection process is the fundamental mechanism to achieve stake convergence towards a predetermined/desired number of network node (i.e. k=500)
A delegator should be given an honest and transparent view of pool differences. Random selection would IMHO only make sense for pools with more or less equal (performance) properties.
I agree, the fixed value for operating a pool should be flexible and adjustable by the operator to a maximum value, lets say the current 340. The lowest the stake a pool has, there should be the possibility for the operator to reduce the cost so that it won’t affect, or at least that much, the reward delegators receive.
I vaguely remember reading or earing something about that fixed cost of 340 being possible to change or open to proposals from the community using catalyst, but i’m not sure.
I doubt the fixed fee will change at all as it’s designed to stop pools from racing to a “$0 fee pool” which is not sustainable. If a pool chooses to give this fee back then that’s fine, but a pool with no rewards is not profitable and would eventually close. That’s not a good experience for delegators. Some people might say that it’s not fair on smaller pools, but the system was designed to run on 150 pools (now 500), not 3000.
How would a transparent view of pool differences work when it comes to a list of 3000 pools? The only facts come from the blockchain registration (fees, margin etc).
A transparent view would work like this …
It would not try to hide or otherwise obscure the difference between operator rewards and delegator rewards. In this example a delegator looses
3.34 / 5.52 - 1 => 39.5% just by delegating to this particular pool.
I often wonder what operators of such pools tell their friends/family when advertising their pool. Do they know/understand these basic calculations and don’t tell or don’t they even do/understand the math? Which is worse?
A good pool ranking would include the concept of “effective cost per block”. The above would look very different when the operator decided to give back some of the pool rewards that aren’t needed to run the pool reliably/securely.
None of the current pool ranking can do that. Random shuffling over the full set of pools would randomly cut 40% of the delegator’s reward and I don’t see how this can possibly be a good idea that delegators would agree to.
A much better solution would be to include pool paybacks or other perks in the ranking, such that a potential delegator can transparently see what delegating to a given pool actually costs and how that pool provides added value to become attractive.
A lot of delegators seem to support pools based on what they support / promote / or their interests. E.g, there’s a lot of charity based pools. When it comes to the majority of delegators who have less then 1000 ADA, the ROA isn’t as significant and they want to support the pools that align with their interests. Only whale holders would be interested in max returns and they’re probably already knowing what they’re doing.
For me personally, I’m against any form of ranking system as it intentionally penalises new / smaller pools and indirectly pushes for centralisation towards well established pools. To be able to monitor a “pool paybacks or other perks” would take an incredible amount of overhead / server resources. As it stands it can take about an hour to scan through all the register pools. I don’t see any pool dashboard wanting to also scan through all a pools delegators to calculate and verify any SPO paybacks, especially since there’s an expectation of the amount of traffic in the future.