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?
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?
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
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.
IF your pool wins at least one block/epoch you get 340 as the owner
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
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
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.