The current situation from the perspective of a small pool operator

Ahoj :raised_hand_with_fingers_splayed:t3:

I would like to share how a small pool operator is experiencing the current situation around SundaeSwap ISO. I don’t want to complain at all, it’s just our point of view and wondering if this is the right way to go in the future.

Crypto Colony Pool was launched in March 2021, we produced the first block a month later and to this day we have 24 blocks. The amount that a saturated pool can produce in a single epoch. From the beginning, we try to attract delegators to the opportunity to support our educational projects, in which they can also participate. Over time, we have found that people are not very interested in supporting our mission, but rather in maximizing their own profits. This is understandable and therefore our pool has set 0% margin fees, which saturated pools do not have in most cases. In addition, we distribute PIGY tokens, which can already be sold on MuesliSwap for another ADA and the latest attraction is the loyalty NFT program, where all you have to do to get NFTs is delegate to our pool. But that’s still not enough, as you don’t have regular ADA rewards for regular block production. So if you want to make the delegator stay in your pool, you have to add an extra ADA rewards. When you do this with multiple delegators, you only have funds left for the mission and pool bills. This way, day after day, delegator after delegator, you build your pool with love and try to keep up with the big players, celebrating each block as a birthday (small SPOs know that feeling).

Then comes SundaeSwap ISO with a huge promo from IOG. Your delegators gradually start asking you how to obtain Sundae tokens and whether they will receive them from us as well. I have to answer no, because there was no chance we would get into the top 30 pools. So they leave, ignoring all the bonuses they have from us. We don’t blame them. If we wouldn’t have a pool, we’d also join the queue. Thus, within a few days of announcing the launch of SundaeSwap, we have lost 57% of our stake :cut_of_meat: (623K → 271K) and that is probably not the end. Within a few days, the six-month job disappeared. Large pools are again slightly larger, while small ones smaller. Is this what do you want for Cardano? :person_shrugging:t3:

I don’t know if it was necessary to hype SundaeSwap launch so hard when launching MuesliSwap (which works great) went smoothly in peace. In addition, according to official statements, certain labor pains are expected and, as we know, the crypto community use every opportunity to hate Cardano, especially if something big doesn’t work. Anyway, we believe this whole situation will be good for something and Cardano will get a proper DEX. Looking forward to swap something sweet on SundaeSwap! :crossed_fingers:t3:

Crypto Colony Pool doesn’t end, it’s just going to be a little harder for us now. But there is no story without struggle right? I wish all small pool operators a lot of strength! :muscle:t3:



I am not operating a pool. And I am not interested much into that whole token swap as well as the NFT thing. Up to now, it’s mostly Mickey Mouse money, gambling, and ugly apes to me.

(BTW: That is not a reason for the other crypto communities to hate on Cardano. They do the same silly stuff. If not worse. But it’s a good reason for the crypto-skeptic bubble to hate on every crypto. “It’s all just a scam.” is not that easily disprovable.)

But I delegated to one of the Sundaeswap pools for the fun of it. With the 99.9% plan of switching back, when the 5 epochs are over.

FWIW: I would value most if a pool is operated by people capable in system administration (given the questions in these very forums, I’m not so sure about that, quite often) and pay their taxes being proud of it (taxes that are distributed by democratic decisions trump charity any given day). No need for fancy marketing and no need for tokens and NFTs with very questionable value. But I’m probably a minority of one.

Also: Yes, we need a lot of different pools for network resilience, to make that decentralisation thing reality. But that does not necessarily mean that we need each and every pool of any given size.

The main point of proof of stake is and hopefully will ever be that the stake matters for how many blocks you get to verify. So, the parameters can be tweaked a bit, but there will always be a threshold, where it is way too small to be remotely profitable, while even if parameters like saturation discourage too large pools, it is always possible to just setup the next one.

“Please only delegate to single pool operators, only give IOG delegation to single pool operators, …” is all fine, but if it were really relevant, they would start to pretend to be single pool, not only firing up a new server, but also a new name and website and …. And we can’t travel the world to disprove them.


Being an operator of a small pool as well - even much smaller - I believe that things will “normalize” after the 5 epochs the ISO takes place. Stake holders will come back, as soon as there’s no reason to delegate to pools participating in the ISO, because airdrops have ceased.

There’s also some parameter changes to look forward; especially increasing k. It was mentioned in the mid month update in December. IMO IOG waits for the go-live of some of the DEXes before making the change.

IMO it’s very important to keep stake holders educated, that they should have an eye on what’s going with stake pools and change pools accordingly. This is especially important to all the new holders attracted by SundaeSwap and other projects.

1 Like