# Rewards Saturation Also Threatens Non-Saturated Pools

Pls check the latest design and ledger spec.

Now I see where my confusion is coming from and I understand what sigma a youâre talking about.

Thatâs why I like science, as itâs immune to our believes, feelings and opinions.

I just made a rough calculation assuming:

1. pool is oversaturated 230m
2. it forges all 144 blocks of 21600 i.e. 1/k
3. Total stake 31bn, active stake 12bn.

The `sigmaa` makes p=35%
If only sigma would be used then p=89%
if capped `sigmaa` then p=100%. (fair as apparent performacne should be based on the ratio of the generated and expected blocks relating to their stake to a max 1/k) and by no any other factors.

So, pls tell me that 35% apparent perfomance does not over penalise that oversaturated pool

This is the link to the latest

1 Like

So do I. Unfortunately I was referring to an outdated version of the design spec. Is there a compiled version, I donât have latex installed on my current machine.

I have to get off now, I will check the latest docs tomorrow. But from a first glance I donât see the benefit in the change they made. The older spec I was referring to seemed fine to me in regard of rewards distribution.

IMO, It was a rational step, but they forgot capping the `sigma a`, or left it on purpose for overpenalising the oversaturated pools and their delegators for incentivising them to re-delagate to smaller pools.

Cos that 35% (if I did not calculate it wrongly and assuming they implemented what is in the spec) penalty after 100% blocks would hit them very hard.

It says slot leader election is based on sigma a, so in your example the pool would produce more than 1/k of all blocks. So performance would be 100 % if the pool produced all expected blocks.

Yes, I missed that and you seems right, and all good then.

Hi Umed, not sure I understand the problemâŚ maybe the term âoptimal pool rewardsâ is misleading. âCappingâ at saturation happens for optimal pool rewards, i.e. a fully saturated pool canât increase its optimal rewards by growing even larger. Actual rewards, however, are optimal rewards multiplied by performance. And performance is not capped and can be > 100%.

So a fully saturated pool that performs perfectly can have performance > 100% and will receive more than its optimal rewards when that happens. A pool that does not miss any blocks will - on average - get itâs maximal rewards, no matter its size.

3 Likes

Lars,

Thank you for providing the the clarification. The essence of problem was to determine if there was some kind of hard cap in place that wouldnât allow pools to categorically receive rewards beyond some threshold.

I see from your response that there is a cap on rewards but no cap on performance which means a saturated pool can receive rewards above its reward cap in any individual epoch but eventually its average rewards will converge toward the cap, regardless of interim fluctuations.