Slot Leader Election (2% Threshold)

English General Discussions
1

The online docs state in relation to being selected as a slot leader:

not all stakeholders (stakepools/nodes) participate in this election, but only ones who have enough stake (for example, 2% of the total stake)

So would that be 2% of all cardano staked throughout he entire system or is it restricted within the context of a node/stakepool, ie owner has at least 2% of tokens staked within pool/node

If it was the entire system, assuming we had 50% of circulating supply staked then in order for a node/staking pool to be in the running as a slot leader they would need a minimum of ~260m ADA? is this accurate?

2

Three more days till the 29th, hopefully a lot of questions will be cleared up

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3

This is an old document and likely to describe the rules in place for federated ouroboros (pre-decentralization).

Every ADA held in non-enterprise wallet participates in the decentralized consensus. There are no thresholds. No minimums.

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4

this makes complete sense, we still are in a federated state, the answer is so obvious yet it didn’t occur to me.

i’ll look forward to the day that these online docs are archived for historical purposes

i attempted to figure out the answer by looking at the white papers only for my eyes to glaze over at a sea of hieroglyphics - that is not for me :slight_smile:

5

The Calculator awards a constant of 200k p.a. for a “Pledge amount” in the range of [0-900k]. This would be: 200 / 73 => 2.74k per Epoch. A constant reward for a pool does not seem right, does it?

In ADApools.org I see an estimate of 0.18 Blocks/Epoch for 255k Active Stake, which differs substantially from above.

When I (naively) divide the Total Live Stake by the number of slots / epoch, I get: 21.43B / 432.000 => 50k / Block. Which would (naively) mean, that a pool can expect to get elected to lead 1 Block per every 50k active stake. i.e. 6 Blocks for 300k, which again is vastly different to either of the above.

Is 0.18 from ADApools the correct figure and where can I find out more about how leader election actually works?

6

If I there is 0 delegator, is that mean 0 change to be block leader?
If total live stake less than 200k above, is that mean 0 change of minting block?

7

If you have 0 delegators, you still have your own coins as active stake and some/all of your own coins as pledge - active stake is what counts. This will change in the near future when pledge is taken into account more. With 200k you can expect to make 14 blocks p.a. on average - those will spread over 73 epochs.

Because you are the owner, you will also keep the 14 x 340 ADA. Assuming that your pool has a 0% margin, this is a benefit that you as an owner can keep and at the same time it is a cost for your delegators, which breaks down as follows for differnet size pools

340 / (64 * 750) => 0,7%
340 / (32 * 750) => 1,4%
340 / (16 * 750) => 2,8%
340 / (8 * 750) => 5,6%
340 / (4 * 750) => 10,12%
340 / (2 * 750) => 20,24%
340 / (1 * 750) => 40,48%

If a pool has 1m (or less) it’s delegators loose > 40% of their rewards. Such a loss is very hard to justify and the bottom line is often that everyone would be much better off when delegating to a pool with lower cost.

There are pools with purpose and also pools run by folks who don’t keep a profit for themselves. Also, we are currently in a somewhat awkward economical situation that every pool hat wins at least one block per epoch, makes (at least) 6 x 340 => $2040 per month. This is much much more than anyone should need to run two simple servers. There is currently no automated way in which a pool can give this back to delegators.

As a consequence, it seems silly to me that anyone would want to delegate to a > 0% margin pool. Look for pools that do something good with their margin, instead of keeping it for themselves - $2040 per month is still plenty.

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8

Thank you so much for the detail explanation!
I have a few question regarding the numbers below:

  1. is the 1,2, 4 … mean the total delegate value in the unit of million?
  2. What is the 750 number?
  3. Do you mean regardless of delegator among in the pool, the pool will win one block which is $340/per month, at least I can cover my AWS cost?
  4. If I delegate my own fund , I will lost 40% of based on less than 1 million delegate fund?
  5. What is pool hat mean? for 6x340 per month, where is the 6 come from?
    Sorry for asking very basic question, is there any link for these number explanation I can refer to ?

340 / (4 * 750) => 10,12%
340 / (2 * 750) => 20,24%
340 / (1 * 750) => 40,48%

9
  1. Yes, million of ADA. 64m is the current saturation level for k=500
  2. An assumed average block reward. 15.62m / 21600 => 723 currently

image
https://cardanoscan.io

  1. IF your pool wins at least one block/epoch you get 340 as the owner
  2. Everyone (including yourself) delegating to your pool, will loose 40% because your pool will only make one or less blocks per epoch. The cost per epoch is high because 340 is fix for all sizes of pools
  3. sorry typo. “every pool that wins …”. There are 6 epochs per month (30 days actually). 73 epochs per year.

any link for these number explanation I can refer to

The most comprehensive explanation is the formula itself …

image
image1920Ă—384 79.8 KB

It can be simplified however, like this …

  • Divide your pool’s active stake by the total stake and multiply with the number of blocks per epoch. This gives you the average number of blocks per epoch that you can expected to win
200k / 22,80bn * 21600 => 0.19
  • This multiplied by 73 is the average number of blocks per year

Bottom line, a small pool is not profitable to the owner as long as the actual cost of running the nodes is higher than 0,7% of the reward that the owner would get by delegating to a saturated pool. For a delegator, it is much worse. If your delegators are friends - you should tell them if you want to stay friends. I guess, most folks that delegate to small pools don’t understand the actual cost that a small pool incurs.

This is by design of the incentive mechanism - it will converge towards k saturated pools (currently 500).

Because of that, I run my pool as zero-profit (because I like it) and give everything that is not actually needed back to delegators. The pool runs on RaspberryPi4, I have a cost of < $10 per month, which is a lot less than $2040.

10

@tomdx ,
Thanks for the detail explanation ! I run on AWS it cost a couple hundreds. I don’t have friend delegate to it yet, and was planning until your warning : " if you want to stay friends" :).

so if I stake 5000 to my own pool, looks like it cannot even cover my cost?

11

The $2040 is a theoretical figure. Every pool that wins at least one block per epoch gets 6 x 340 => 2040 - with a > 0% margin even more.

Here are the reward details for ASTOR
https://dynamicstrategies.io/crewardcalculator/pool1n6qqnvjfzskcq9zdld5pnp8q3ktd28pqsh5tkmvarqcayr76puv