He did say though that a0 and k are heavily related, so I suppose both paramters will be adjusted at the same time.
I heard like once K is increased then they will revise a0. I think the first preference is for K and later a0.
If a0 is revised now, many pools will be less desirable due to very less pledge amounts.
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It’s interestingthat you say that, as it seems most people thinking a0 is too small are stakepool operators.
Anyway, almost time for the epoch transition, better check all systems are running properly.
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BTW, personally, I don’t have any bad feeling for IOG pools. They deserve to be here. Openly in competition with all other pools.
When Charles is ready to fund from his pocket for initiatives, who can question IOG’s presence…No one.
Which pool is yours?
What I remember hearing from Charles in an AMA was they want to delegate to pools but deciding what pools and the security around that is difficult. Especially without the 1-to-many portfolio feature they are working on. While that is worked out, they want to make money on the Ada they have.
I see few pools with stake <3MM can still achieve ~5% ROA, is that just pure luck? Or they do something differently?
My understanding the only controllable factor is to make sure your pool is online when winning the reward, but to get the reward in first place is just like a lottery?
My one is: UNDR
I suppose, those comes from the d>=0.8 meaning the apparent performance is 100% and assuming at least one block is created (which also a luck, but it avoids extremes, so around ~5%).
But, from d<0.8 it will come from pure luck (relative to their stake), but the chance is increasing while d is decreasing, but a lot of small delegated pools will suffer for short term till then.
Because, the expected blocks has a huge affect on the apparent performance, cos I.e. 1 of 5116 (d=0.74) or 1 on 21600 (d=0).
IMHO, morally:
- Any identity can have as many pools as much money they have for full pledge. e.g. IOG could have ~12 pools.
- Though, they could decide, to half (or any % of the) pledge and delegating their other half (or the rest) to any other pools for supporting those pools for any reason, but it should be very transparent which can be achieved,
- The rest (like me) could have only and only 1 pool.
The current reward scheme, does not really support this scenario and I am not talking about the a0, k or any value, but the reward distributing function, in which the margin based reward is linear to the delegated stakes.
Meaning, higher the delegated stakes, linearly more rewards to the pools (ofc a0 has also affect on it).
So, this could incentivise (assuming the ranking/desirability has no any affect on it) the pool ops having more smaller pledged pools (despite the opposite force of the a0), but would gain more rewards due to the nature of the reward distribution function.
So, I would implement some pledge weighted margin which would not have that huge impact and would incentives the pools to not split their pledge (to some extent) for gaining such a high reward.
I had to edit as was not allowed to write a 3rd post
To make it sense I give some very oversimplified and rough example, assuming Nash equilibrium, and 150 fully saturated pools, and the current monetary expansion for the year i.e. ~2.6bn
So, the pool reward, would be the following per annum:
- min: ~2.6bn/150*4% (assuming 4% min yearly ROI and minimal pledge) - therefore minimum pools reward for a year: ~693K ADA
- max: ~2.6bn/150*4%*130% maximum pool reward for a year: ~900K ADA
So, is it fair for example a pool who invested only 100K ADA for earning 693K rewards 693%?
And on the other hand, for a pool who pledge 207m earning only ~6%?
My reward scheme would consider the investment (to some extent) instead of this linear nature of the margin.
So, if somebody invested (i.e. pledged) only 100k, 200k, 500k etc. then its return would be weighted on that investment, to some fair valule, would say ~20% yearly, instead if these 6x to 10x.
And as you can see higher the pledge, the reward decreasing propotionally relative to their pledge, meaning no incentives from whales to have huge pledge, but split them accordingly (to their sweet spots).
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Wow you have more active stake than I expected. And you think your pool won’t survive?
The ranking depends on the averaged apparent performance, the cost, margin and the simplified reward function that assumes NASH, and not based on the delegated stakes (though it affect the apparent performance), and it will have a huge impact on the staking.
Meaning, some small pledged pools need to unify to some bigger (pledged) pool (I warned already, size depends on the pledge and not on the delegated stake) to survive.
You see. You don’t know nothing how they are deciding. Is there a list of criteria to qualify? Do they have dates, concrete numbers? Nope. People still repeating the same mantra: It’s still early. They have probably only started running nodes in July 
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Why should I be told how they are deciding? Why is that any of my business?
I can’t be more clear than I was. You sure have the right to your opinion as everyone else.
I think I do get your point. However making several smaller pools with low pledge will result in lower rewards for the delegators so those small pledge pools should not be able to attract any delegators. Right now this doesn’t seem to work if you look at the 1pct pools for example, but once ranking of pools works properly in daedalus and on other sites, delegators will (hopefully) do the rational decision and switch to high performance, low fee, high pledge pools. Since the 1pct pools only have 10k pledge or so they will receive a very low rank.
As discussed in the other forum topic. Pools are going to be ranked based on the expected rewards for the delegator. This function does include the stake and oversaturation.
Yep, missed the section 4.3, to make it clear.
Yes, I mainly referred to some whale like pools, who can tweak tune the system for gaining the max profit they could in some dishonest fashion. For small pools I think a0 as an addition has enough force to prevent that type of Sybil attacks when ranking is fully enabled.
I’m not entirely convinced this will be the case. But I’ll be happily surprised if it’s true.