Hi, I’m started staking my ADA in a pool with estimated 8%ROA and 11%cost (3%+340). What does 11% cost mean?
I have not got any reward at the end of my first epoch of staking. Is that because the cost % exceeds ROA %?
Thank you for your time in advance.
I’m started staking my ADA in a pool with estimated 8%ROA and 11%cost (3%+340). What does 11% cost mean?
Cost shoud be the % which the pool will receive from total of rewards but I think it’s not reflecring the realitty in yoroi
I have not got any reward at the end of my first epoch of staking. Is that because the cost % exceeds ROA %?
Nope, first time when u delegate u will need to wait 4 epochs till first reward ( rewards are delayed with 2 epochs)
Thank you very much for your info.
“Cost shoud be the % which the pool will receive from total of rewards but I think it’s not reflecring the realitty in yoroi”
I am using Yoroi. Yes, there is no clarification on what cost% means in Yoroi. Did you mean to say that, based on my case, I will get about 8%ROA regardless of the cost %, and that I can just ignore the cost?
Yes, but u should check on adapools.org for the long term ROA not for the monthly ROA; the ROA for short term can fluctuate
I see. Thank you very much for your information. When you said “long time”, I assume you meant “life time”? Some of them have up to 70% (lifetime) while others (e.g [[ANEJO] Anejo Stake Pool]) have both good monthly ROA 8% and lifetime 10%. Would it be a good idea to stake in those pools?
Hmm those are pools which had an amazing luck… for these pools u should also check what is the uptime (when were created)
But u must understand that all pools will provide on long term (1 year) the same reward ~5-5,5%
To understand cost (for the delegator) you need to understand how the block reward is distributed. It is actually quite simple …
Most pools take the minimum fix, which is 340 ADA. For simplicity, lets say you stake 500k with a pool that has no other delegator and the owner pledged the same amount. The pool has a 1% margin.
The active stake is therefore one million and there is a good chance that the pool will actually win a block. Lets further assume that the block reward is 740 ADA.
Pool reward …
340 + (740 - 340) * 0.01 => 344
Delegator reward …
740 - 344 => 396
The owner would get: 344 + 396 / 2 => 542
You would get: 396 / 2 => 198
There is the important metric of cost per block, which in this case is …
344 / 740 => 46,5%
You would therefore give almost half of your rewards to the owner. The more blocks a pool makes per epoch the lower that cost per block.
In comparison, lets choose a much larger pool that makes 50 blocks per epoch.
Pool reward …
340 + (50 x 740 - 340) * 0.01 => 707
Cost per block
707 / (50 x 740) => 1.9%
You will notice that the value of ADA has not entered the game so far. Actual running cost for the pool is however likely not paid in ADA (just yet). Another important metric has entered the game recently, which is “effective cost”. Some pools have realised that the cost to the delegator are unreasonably high (especially for small pools), while at the same time the pool rewards are also higher than is actually needed. There are pools that give a significant share of pool reward back to the delegator - this is however something you won’t see in Daedalus.
You may need to shop around a little, to get the benefit of such extra payouts. There is often good reason to choose a pool not just on ROA. For example, whether it does other good things in the world - does it “Make the world work better for all”? Some good options are here.
Thank you. I got it. I am not able to find “uptime” info on both adapools.org and the website of pools. Where do you find that info?
Thank you for your explanations. So then, on Yoroi, is 46.5% %cost you see on Yoroi?
I use this reward calculator when I want to compare owner reward vs. delegator reward for various parameters. It however also cannot show effective cost.
Thank you. Yeah, I looked at the registration of those pools with high %. They were registered a a couple of months ago. Like you said, their high % ROA/lifetime will likely go down as time passes.
Thank you very much.
UR welcome
