Hi,

As per the discussion here https://www.reddit.com/r/cardano/comments/k0c8pz/cardano_parameter_change_what_you_should_know/

It says that if stake amount goes above saturation point the rewards will get slashed.

Ans as per this What is a Fair Reward for Cardano Pool Operators?

It says that pool must have some x amount to get daily block and reward? and the x amount seems to be the saturation point parameter which means.

Saturation parameter = total circulating supply / K(Not sure what’s the value of k. Is that 1000?).

How much stake should be staked by a stake pool to get rewards/daily block?

Please correct me If my understanding is wrong about the saturation point and K parameter.

Low stake = few blocks

high stake = more blocks

But this not matter because if a pool has high stake then the rewards are often but small amount

If the pool has a low stake then the rewards are seldom but high amount

The averrage of rewards on long term (1 year) will be the same … around 5%

You can comporare on pooltool.io… choose one big pool with hundreds blocks and a smal pool with only few blocks… and compare the long term ROA

Alex, I’m sorry to contradict you on this …

It is not true that the delegator reward is independent of pool size. Instead, there is a cost to the delegator that varies considerably relative to pool size - the details are captured here.

It is so, because the a fix cost (i.e. what is removed from delegator rewards before distribution) divided by the total reward a given pool gets, is a much smaller fraction for large pools, than it is for small pools. We cannot contradict this simple mathematical truth.

This mechanism also helps that stake will eventually cluster around k saturated pools with k (very likely) being a lot less than number of blocks per epoch (i.e. k=500 now, it may be 1000 or even 10000 in the future, but not 21600). With k=21600 every pool would just make 1 block per epoch and there would be no economic reuse of compute resources.

Isn’t the ROA calculated after the pool cost ?

but indeed, the rewards are affected by the pool cost and margins …

The ROA is the annualized ratio of `YourReward / YourStake`

. To optimize your ROA you would want to minimize the cost that you pay for these annual rewards. With an (almost) saturated pool that cost would be about 0.7% (i.e. pretty good)

Lets assume all goes well throughout the year and you make 5.88%, your friend who has delegated the same amount to a much smaller pool has a cost of 30%. Of course you could say that 5.88% vs. 4.12% is not a significant difference in annual return, especially not if the change of ADA value dwarfs both figures, but it is still 30% less rewards.

We could for example say: Delegator rewards are between 4-6% p.a. depending on pool performance, which is peanuts in comparison with how we expect the ADA value to change over the same time frame.

This would cover small and large pools and would at the same time be totally true and in line with what the reward formula predicts.