Solo staking


#1

Hi. I asked this question on Facebook, but I guess this is the proper forum.

I’m just thinking, and I might be wrong. If you have 100 Ada and join a pool. Won’t you effectively stake just the same amount inside a pool as well as outside given that you vote with your stake?

I might have to read up in delegated PoS :wink:

My point is that I want to be a part of the development, and not give my staking vote away. Won’t I be eligible to some reward if I solo-stake/vote? Or do I HAVE TO gamble on a bigger delegate?

Charles mentioned in an interview that a reward would be set aside and then you can come and claim if you prove you’ve contributed.


How much ADA required for delegate proof of stake?
Proof of stake rewards question
#2

Yes, but your opportunity running outside a pool will be different.
Opportunity to be chosen as a slot-leader (produce a new transaction block and sign it) is derived by dividing your stake by the total value in the Cardano SL (Settlement Layer) system.

Example:
Your stake = 100
ADA Pool = 29,900
Total value in SL = 100,000

Solo:
100 / 100,000 = 0.001%

Pool:
(100 + 29,900) / 100,000 = 0.3%
100 / 29,900 = 0.00334448%

Opportunity to be chosen as a slot-leader:
Solo = 0.001%
Pool = 0.3%
Your contribution to the pool = 0.00334448%

The choice really is yours but the opportunity and thus rewards are different.


How much Ada will be needed for staking?
Are pools going to be allowed to take a fee or will staking be truly expected value neutral?
AdaPools.io - AI monitoring now in place on all nodes, 24/7/365
#3

Oh that’s right. I forgot all about the slot aspect.


#4

Math slightly off but the takeaway should be that with e.g 1000 stakes you will solo get 1 and with pool you will get 300. you well end up with the same amount of profit but benefit of the pool would be that the staking earnings will be paid daily but with solo you will be paid yearly (contrived example).


#5

I would say there are two theoretical advantages of pooling vs solo:
By example, assume you could get 12 ada solo as a lump, or 11.88 staking (I’ll assume 1% pool fee which is pretty standard in mining).

1 - Assuming that Ada appreciates throughout the year (maybe 1% month for a quick example, or 12% per year), you’d be better off to get 1 Ada per month that enjoys the monthly appreciation vs a lump 12 at random (i.e. could be very end of the year).
i.e. Month 1 = 1 Ada + 12 months at 1% appreciation = 1.12 Ada end of year
Month 2 = 1 Ada + 11 months at 1% appreciation = 1.11 Ada end of year
etc.

In other words the consistency of payout from a larger pool (the larger the better as it (ensures the most steady payouts for all members )) will almost certainly exceed the payout from solo assuming the currency itself is appreciating and you hold onto your rewards.
I used 12%, but imagine 50% or 100% appreciation and things look even more skewed for a pool.

2 - Because of the very low odds of being a slot leader doing solo, you better make sure you are 100% 24/7/365 running, ready and available with a fast connection b/c nothing would be more frustrating than waiting all year and the one time you are elected is when your computer reboots at night due to a ‘windows update’ or you don’t reply in the allocated X sec time b/c your computer was busy or similar. That would mean potentially waiting another year for another chance and of course losing that years reward vs the steady payout from pooling.

That said, we will all have to wait and see exactly how the staking will work,
what are the rewards, pool fees,etc. to truly compute the best option but the two points above are the general theoretical advantages over solo.


#6

Do we just need to run the Daedalus wallet to stake? I have an good internet connection will it make sense?


#7

Interesting… Get me popcorn.


#8

Seems like it’s better to join a pool with stakeholders who have approximately the same amount of Ada in their wallets for the best roi for all members, or am I missing something here?


#9

Yes I came to the same conclusion. Otherwise if there are too much discrepancies, the probability to get chosen is too low if you are a small stakeholder in my opinion.

But I am not so sure, because the “competition for getting elected” is not within the pool but within the whole Cardano SL if I’m not mistaken…


#10

If the reward will pe proportional to what you stake - it will not matter what others stake - as long as you stake long enough to get ellected


#11

Not quite, as the probability is the likelihood of an event happening measured by the ratio of favorable cases to the whole number of possible cases.

Your favorable outcome is how many ADA you own and total possible outcomes are how many ADA will be staked.

What a pool gives you is predictable payouts, the law of large numbers guarantees this.


#12

What would be a good criteria of who goes in the pools, besides the stake/ADA involved? Is it wiser to have people in a staking pool whose IP addresses are geographically close or far apart? Aliveness is definitely one of the major assumptions in a PoS system, I’m just wondering out loud what’s better …


#13

I like the way you are thinking this through, does your physical geographical wallet region vs the ADA-node region matter?

Not really, at least as far as technical reasons are put forth.
But it could make a difference to you if your country is less than friendly.

I’m planning on deploying a node in the Bolivarian Republic of Venezuela in large part because the people there are suffering from fiat money. Do I expect any traffic from the people of Venezuela, no, but I’m hopeful the word will spread and in a small way the people will be given a choice and thus take control of their right to opportunity.

Cheers,
Jonathan


#14

What, you’re not going all in on the Petro? :slight_smile:


#15

i thought the pool idea was more about allowing exchanges to give you POS rewards in a reasonable way, so you can be on the exchange and still get your reward, unlike how it typically works for clams, and other POS coins on poloniex (as one example).

what i’m seeing here is talk about teaming up with others to have a staking pool to spread out rewards so they’re not infrequent and lumpy but donating some fee to the pool manager (a so far unspecified fee) for the privilege.

being in a pool might be dumb, depending on the manager’s take.


#16

You should not by now that - your coins from the exchanges - are NOT YOUR coins. Do you have the 12 seeds from the wallet that them? What if the exchange site will close today - what will you do?
You only HAVE crypto if you HAVE the private key of the wallet - atm you dont OWN any coin - exch own your coins!


#17

I am not sure if I understood exactly can someone explain me please how you join a pool ? Thank you


#18

After going through Cardano docs my assumption is that to get elected as slot leader you suppose to own at least some percentage of ADA (Ex. 2%), if you own less than 2% ADA and stake solo you have no chance of getting selected has slot leader, but you can join a pool.


#19

that would seem to fly in the face of the idea that we want as many wallets out there as possible to secure the network.


#20

At the moment you can’t join any pool. Staking and pooling will only begin in REWARD ERA (Q2 2018). You can checkout these projects BlushPool, ADAPOOLS and Adafans.