Understanding minPoolCost - needing an explanation for starting out SPO's

Hi All,

I’m failing to understand "minPoolCost " as a SPO / Operator, specifically SPO’s getting started. From what I understand: There is a fixed pool cost of 340 ADA that gets taken (burned?) by the Stake pool software, which is deduced from the rewards wallet (?) every Epoch. What i dont understand is does this get deducted every Epoch even if the pool hasn’t found a reward?

If im getting this wrong could you please explain.

What is the general setup for most pool operators to recover the minPoolCost ?

the min pool cost (340) is the pool rewards which will be deducted before to be distributed (rewards) to the delegators (once/epoch no matter how much blocks you will create but minim 1 block)

Example:

if you will create 0 blocks = 0 rewards
if you will create 1 block = ~720 rewards. (720 - 340 - pool margin) = final rewards which will be shared with the delegators
if you will create more than 1 block (for example 3) = (~720 *3) - 340 - pool margin = final rewards which will be shared with the delegators

Cheers,

Hi @Alexd1985 thanks for the reply.

Ok so if i understand this correctly:
Every epoch if the pool has created ≥ 1 block, the minPoolCost will be deducted from the total rewards for that pool (for the current epoch) before the balance is distributed to the delegators.

So, to answer the question (that i have seen elsewhere). When setting up/ registering a new pool. the cost is:
Registration of stake address (stakeAddressDeposit) = 2000000 Lovelace = 2 ADA
Stake Pool Deposit (stakePoolDeposit) = 500000000 Lovelace = 500 ADA
plus some TX fees to interact with the blockchain.

Therefore the minimum amount needed to setup a new stake pool is 500 + 2 + (some Tx fees) ADA.

correct?

correct, you must pay 500 ADA + fee for the pool registration (500 ADA you will receive back as reward to the pool wallet when you will retire the pool); then 2 ADA + fee to register the stake address for the pool wallet address (2 ADA you will receive back when you will deregister the stake address);

PS: the 500 ADA will be taken from the wallet (can’t be used as pledge)

Awesome, thanks @Alexd1985 , I appreciate the replies :blush:

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