What are technical benefits of having multi-owner pool?

If we put aside the bureaucratic decision of making a multi-owner pool (couple persons), I’m really trying to understand if what are the technical benefits of having multi-owner pools?

Each owner still probably will create a dedicated to that pool wallet/address/stake and will have a pledge amount there untouchable.

Why create additional pledges/rewards/payments “owner” in addition to “human owners”?
Is adding human owners is only a bureaucratic decision for visibility or even sometimes bragging and stuff like that?

Let’s say you have 100k or more and would want to own a stake pool. You may not have the tech skills or the time to actually do that though. An alternative would be to become an secondary owner of an already existing pool. The pool would benefit because your 100k could be added to the pledge and hence (depending on the effect of a0) would increase rewards for everyone.

You would have a benefit too, because as an owner you would likely get a share of the pool’s fix and its margin. This can be considerable - see the difference in operator return and delegator return for any pool of your choice.

However, that share of pool margin is not an automatic thing, it would need to be negotiated among the already existing owners. There needs to be sufficient trust among the owners, because there is only a single rewards address for the pool i.e. those rewards must be distributed manually among the owners. In future, this can be a plutus script address, such that extra distribution can be done by a smart contract. The latter is something I’m already working on, so that in the near future that contract can not only distribute extra rewards to loyal delegators but also to partners who may want to become co-owners.


Thanks @tomdx for your awesome answer!

I’m still trying to understand if it is beneficial to create separate artificial-rewards-“owner”?
That account will receive rewards, hold full/partial/none pledge, (maybe do payments too?)

Sorry for asking dumb questions, I’m reading everything about multi-owner pools (my-fav-thread) to understand potential outcomes and operations just before I’m ready to host my pool to mainnet. So people in such threads discuss such “rewards-receiver” owner.

Trying to understand best practices and the most common use-cases.

TL;DR :wink:

However, to me it would be imperative that private keys remain with the respective owner. Changing pool parameters would require a multisig Tx, which can be done with HW wallets (e.g. Ledger). At least that is what I’ve tried.

I’m both SPO and one of the owners. For me, the main reason to have a reward account is for easy award counting and distribution. Without a separate reward account, I would have to use my own private account to receive reward. If my private wallet is also receiving and sending transactions for other purposes, the reward accounting will become very messy pretty soon.

Also to my surprise, I recently discovered that the staking reward for all owners, in addition to pool reward (cost+margin), also go to the reward account. That increases the complexity of accounting and also require higher trust among owners and SPO. A separate reward account just makes accounting/distribution more transparent and easier.

1 Like

That was my next question about if how to manage rewards in case of multi-owners. Slightly unrelated to my initial question, but kinda continuation of your very useful questions and researches in the other thread! Thanks for your input! I will try to do my own research and different pool setups.

the staking reward for all owners, in addition to pool reward (cost+margin), also go to the reward account.

You mean actual “usual” staking to a pool of owner, and not pledging? - and my personal stake to “by coincidence” my own pool will go to rewards address ? that’s because I’ve staked using same wallet/address I did delegation?

If my private wallet is also receiving and sending transactions for other purposes,

Rhetorical question…, Why one would use a personal/private wallet to pledge/register pool? When you can easily create as many wallets/addresses as you wish? Probably that’s about hardware wallets.

Pledging is a form of staking, an officially announced and committed staking of the owner’s wallet. The staking reward for the wallet owner uses for pledging will go to the reward account. If the owner has another wallet, which is not used for pledging, then its staking reward will go back to this wallet as usual.

Each human owner will use 1 or more wallets to pledge (ie., officially declared staking) to the pool. After pledging, owner is still free to send to/receive from this wallet. If any one of such owner wallets is also used for pool reward purpose, accounting will get messy pretty quick.

1 Like

One small question. In your case, is that “rewards-owner” is holding the complete pledge amount too, or is used mainly for receiving rewards (of course counting that accumulating amount in the pool pledge, as was answered to you in the other thread)?

Reward account holds very little ADA. It’s for receiving rewards only. That is the purpose so that owners can still control own funds. They are only relying on SPO for staking reward and their share of pool reward, much smaller risk.