Stake Pool Operator - Cost of Entry

If I understand correctly, as the price of ADA goes up, the cost of Entry as a Stakepool operator goes up, correct?

For example,
Currently, the 500 ADA. So, @ 1.50 the cost of a 500 coin deposit is roughly $750.

f / when the value of ADA goes up to $8 per coin, then the cost of starting a stakepool would be $4000.

If the cost of ADA rises to $300 per coin, then the cost to start a stakepool would be $150,000.

Or does the ADA deposit go down as the price of ADA rises?

Hi @MCMaricopaAZ the 500 ada starting deposit to create a pool is a default parameter that can be changed if the community agrees to change it. The same goes for other parameters like the minimum fixed fees and margin fees.

That put aside, of course setting up a pool with a decent pledge will get more expensive while the price of ada goes up. But that also makes sense to me since there should be a risk vs rewards situation. 2 years ago the price of ada was 10 cents but to invest in the project then was also more risky since the chances of success were lower. As a project gets more mature so decreases it’s investment risks but this will also go hand in hand with the investment price.

1 Like

Thanks. That makes sense.

At the stage we are at now, it appears to me that I need to be a millionaire to even compete in the Stake Pool. I have the deposit, and I could stake 2000 ADA, but my chances of mining a block would be close to zero unless I were lucky enough to get some big delegators.

However, if I delegated my ADA to a larger pool, I can still do very well with a 10,000 coin investment. which is cool. :slight_smile:

1 Like

Wouldn’t say 0 but it would take a long time to get a block minted. :sunglasses:Luck has a huge factor. My pool was able to mint a block recently and we were in the same situation as yourself thinking when will we get the opportunity to mint.

Pools rewards are capped to a certain degree. A pool that mints every epoch receives less rewards than a smaller pool that mints 1 a month and receive more rewards. Roughly about 5% or i like to say 3-8% ada in 1 year… There is a whitesheet explaining on the forum somewhere if you were interested.

1 Like

I am, but I’m still trying to get my Stake pool running. I was able to get it running under 1.26.2 but now with 1.27.0. It’s not working. :frowning: Struggling.

1.27 requires a little more memory/cpu than the previous version. Are you following one of the tutorial on the forum?

1 Like

Yes, definitely following your posts. :slight_smile:

I added an 8GB swapfile

So far looking good:

1 Like

Glad to hear. Looking forward to your stories !

1 Like

The cost of running a pool is explored here to some degree. For a delegator, there in one decisive factor, which is cost per minted block. If that cost was 0, all pools would be equal in terms of ROA no matter how many blocks they win p.a. Luck is not a factor, because is works both ways and in the long run it equals out. Large pools have significant lower cost, because a fix amount (i.e. 340) will be deducted from the reward of many blocks. A small pool can still be attractive, but only if it finds some (creative) way of lowering the cost for the delegator - at least IMHO.

1 Like