Starting out in 2022

Staking & Delegation Operate a Stake Pool
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Hi everyone,

I’ll begin with the standard disclaimer: I’m quite new to Cardano and Cryptocurrency. Please be gentle if I demonstrate laughable naivety in the following observations and questions.

I’m considering running a Cardano Stake Pool. My motivations are mainly geeky; I’ve been a sysadmin by day for several decades and in my spare time I write amateur code and admire the skills of other coders. I’m a maintainer of the, mostly forgotten, Mixmaster Remailer and wrote a successor to it called Yamn. I’d be lying if I said I don’t care about making money from running a stake pool but I’m principally concerned that it doesn’t turn into (yet another) very expensive hobby.

I’m estimating my initial operating costs at 150 ADA per month using the current exchange rate of 1 ADA = $1.30. This is based on 3 dedicated servers (2 relays and a block producer) hosted in a Data Centre. While I can shoulder that cost for a few months, I wouldn’t want that level of financial loss over a long period of time. Am I being overly cautious or is the reward for operating the pool likely to cover my monthly outgoings within, say, a year?

My next question concerns the size of my stake. I understand this relates to how much return I can expect but, looking at the existing pools, many clearly have huge funds available. Has Cardano staking become the realm of big businesses who can stake millions of ADA or is there room in 2022 for a hobby operator with an average income and a family?

Last but not least, I’d be interested to know more about the duties of a stake pool operator. Are there daily or weekly operational tasks or does the pool mostly run without intervention? I have no issues feeding and watering a few servers but can’t give up my day job and dedicate all my waking hours to it.

That’s all the questions that are currently running through my head but I’m sure there are others that will arise if I undertake this journey. My thanks in advance for reading my ponderings and for your opinions. I wish Cardano the very best of luck, with or without my participation.

Steve

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Welcome Steve to the Cardano Community. I think you already figured the technical part of running a stake pool as well as the financial part. What should be your main plan of attack is to how to attract delegators to your stake pool. Focus on that plan. You must have a plan. Tweeting every day is not a plan. You have to define something unique, something marketable for your pool. What is it that you bring in to the Cardano community? Anything unique in terms of contribution to build a tool, or educate a community that never knew Cardano existed. Or perhaps you know someone who has enough money to buy over a million ADA and need you to operate a pool.

I have been operating MYLO for 5 months now and have sustain organic growth through educating my community of 2,000+ American-Indians who only knew Bitcoin and Ethereum until a few months ago. Educating them about the value proposition of Cardano helped me gain their trust and they stake at my pool. I also tweet a lot but there are over 3,000 stake pools who do the same. So, I had very little success from twitter. I am now working on something unique to differentiate MYLO so that every Cardano delegator must go through my pool if they ever want a piece of the pie.

Good luck in your journey and if you need any technical help, please search through the forum or ask.

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Thanks for your reply and welcome. Yes, I’m quite comfortable with the technical aspects of running a Stake Pool. The Operators Course is pretty good and there are plenty of other resources to draw on. It’s the marketing aspect that I find more challenging. Clearly this isn’t a case of build it and they will come.

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Very well said… Twitter is great to let people know you exist, if you spend a ton of time on it. Just because you tweet something they like doesn’t mean they’ll delegate with you, it takes so much more.

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