Stake pool pledge Amount


We are considering the pledge amount and how we arrive at the correct figure.
Is there minimum 10,000 ada and or what benefits the Stake Pool to go above this?

@Michael.Liesenfelt did some calculations a few days ago:

What I would take from it: Pledge doesn’t make a difference until you have tens of millions of ADA that you can pledge.

Until then it’s just a signal for your potential delegators that you put your own funds into it. But it does not give you relevant advantages in return.

Also always keep in mind that you won’t get regular block production with less than around 1 million stake and you won’t be able to offer competitive rewards to your delegators with less than around 10 million stake.

The latter might change if the parameters are tweaked. The former will probably not change.


@mattmco ,

The most updated yield charts have been added to the CIP draft document here:

I have cases for 0, 30, 340 (current) minFee and a0= 0.0, 0.1, 0.3 (current), 0.5, and 0.7.

Thanks Hepsta those charts are very good, so from a startups perspective its not the pledge that you begin with that rewards, its a signal to the seriousness of the stake pool from company did I get that right ?

So the stake saturation what is that in relation to the pledge and I see a0 mentioned lots can you explain ?

Thanks @Michael.Liesenfelt any chance you can break down the science a bit?

he a0 parameter creates a benefit for pledging more stake into a single pool; adding X amount of pledge to a pool increases its rewards additively by up to a0*X?

And what is the pledge saturation ?

Stake saturation is the point at which a pool does not get additional produced blocks for additional stake anymore. If then more stake is delegated to that pool, the rewards for the same number of blocks have to be distributed among more stake. So, the yield in percent goes down, when new stake is delegated to a saturated pool.

Currently stake saturation is at around 64 (or 68?) million ADA if I remember correctly.

Pledge is a part of the stake coming from the pool operator. A pool will not get any blocks if the declared pledge is not delegated to the pool by the operator.

Having more pledge increases the rewards, but as the analysis linked above shows, it only really becomes relevant if it is a larger part of the stake of the pool and the pool is more than, say, 20% saturated (which is around 12 million ADA). Most effect can be seen for people who have a private pool, saturate it completely and declare all of these 64 million ADA as pledge. Then, there yield increases to 5.5 % (from the 4.2 % that most medium-sized pools get).

But, as delegators are not really rational and most do not read much about how it works, there will probably be many who look at the pledge and arbitrarily decide if 1k pledge is enough or if 10k are still too low.

It all depends on what you want to do with the pool. Shall it be a hobby or a serious business? Are you ready to do some marketing?

Forum wisdom is that you start to get a block per epoch on average at around 1 million ADA stake. If you have that much yourself, it might make sense to run your own pool. But if you want to attract other delegators, you will have to do very persuasive marketing, because the yield that you can offer is way lower than the average of ca. 4.2 %.

As you can see in the charts, yield for delegators starts to be that average somewhere around 20 % saturation. So, if you have around 10 million ADA stake, you can compete with other pools for delegations, but would still have to do lots and lots of marketing.

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