If the delegate states that the base cost is 340 ADA, and then it sates a %, like 3%. What is it a % of? 3% of what. The rewards earned perhaps?
Hi!
The base cost (340) and the percentage based fee will be taken from the reward a pool is given for minting a block, before the rest of the sum is distributed among the delegators. So a high percentage means less money goes to the delegators and more to the pool operator.
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Freja is right. To be precise … the 340 fix is deducted first, then the margin is deducted - the rest is then distributed proportionally among the active delegators.
Perhaps also worth mentioning … as soon as a pool mints at least one block per epoch, the operator receives those 340 ADA. For pools with an active stake of > 1m it means, they get 6 x 340 => 2040 ADA per month even with a 0% margin. We are now in a somewhat awkward economical situation in which $2040 per month exceeds what anyone should need for running two simple nodes by far. Hardware, electricity, network, domain cost can be < $20 and if you run on an arm64 device like a RaspberryPi4 it can be even half of that.
As a consequence, it very hard to justify why an operator would want to take a margin > 0% if he/she already gets 100 x that of what is needed to run the nodes.
If you have the choice, look for a pool that does some good in the word (e.g. gives plenty to a charitable cause of your choice). There are also pools that return much/all of the profit to their delegators.
Its a good idea to calculate the annual cost of delegating to a given pool. i.e. 73 x 340 + margin
Perhaps you find a pool with a good cost/charity ratio. The ranking in Daedalus is useless in that respect IMHO.
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Hey tomdx,
Thank you for that detailed information. I’m curious then, have you delegated to a pool? If so, would mind sharing that with me?
Thank you
Many folks that post good comments also say something about their pool in their profile. Another good source of inspiration is “announcing the pools we’re supporting”.
I want to thank you for your response to my question. I appreciate it!
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