Assuming that the pool operators keep a relatively high % uptime, why would I stake with anything except a 0% Margin Pool?
Pretty easy to answer.
A 0% margin pool isnt sustainable on the long term. If SPO’s doesnt get paid, they wont run their services in a professional manner and we do need that.
Why are you so sure that no 0% pool can run it professionally? Couldn’t one person worldwide afford the cost through inflation of ADA and processing transactions?
Because if he doesnt charge any fees, hes only getting the 340 ada per epoch which is a minimum.
You have to maintain your server, you need hardware, you need a good internet connection and way more. Im pretty sure that it wont be sustainable with 0% fees.
The owner has their own ADA though which they can stake on their own node and would get whatever percentage of ADA delivered there.
The cost of operations doesn’t just include server hardware (or renting of cloud VMs) or internet connections and cost of egress traffic. It also includes the time these SPOs are putting into the support and operations which is severely underpaid at the moment.
Also, keep in mind, these margins can be changed by SPOs at any time. Good chance this will happen for most, if not all 0% pools. The ones I’ve seen only have 0% for an introductory period.
With that said, let’s assume the SPO can maintain 0%… the cost to delegators from 0% to let’s say 3% isn’t so significant as to make the 0% more intriguing vs the risk that it will someday disappear on you. Finally, you may chose to support a pool with some ADA that let’s say is at 6% (just throwing numbers for the sake of the argument) where the pool is using profits for a good cause for example, or running on clean(er) energy or … take pick your… obviously there’s the verification and vetting that this is where the profits above and beyond operation costs are going to etc…
In short, not as simple as a straight up margin calculation; there are quite a few factors and uptime/sustainability is in my mind at the top of the list.
I am running a pool at 0% at the moment. The reason is to get the highest ranking possible to attract stake and ‘get off the ground’. So it is indeed introductory for me.
I develop and run cloud services for a living and have been doing so for over a decade (well back then not always ‘cloud’ but hey). Same is true for my business partner. Our IT costs are currently covered by the 340ADA per epoch.
So indeed what we are putting in is our time.
What I have not seen so far in many of the discussions about pool margin is that we are putting this time in to further the network same as all other ambassadors of Cardano. There is no recognition of that.
Arguments like ‘a few percent margin is very little on the absolute rewards’ are invalid in my opinion. It doesn’t matter for the reasons and quality of a 0% pool. All arguments about poor quality can just as easily hold for 3% or 10% pools. Performance is the only metric apart from doing your own due diligence and getting to know the operator
What’s your pool called rene? How long do you anticipate keeping it at 0% ?
Our pool is SECUR. We are lucky to be doing quite well on the stake side at the moment. I think one of the reasons is that we are following this strategy already from the hardfork. We felt already back then that it’s almost a must-have strategy given that we didn’t participate in the ITN and didn’t have a brand name.
It’s currently very hard to differentiate yourself with the value of k and total % of ADA staked.
We anticipate to run at 0% until we reach saturation or very close to it.
Thanks rene, I’ll consider staking with you all. How do you determine saturation? What’s the ideal amount of ADA to be considered “saturated”? And, by that I assume that means has the highest chance of being selected as slot leader while still delivering optimal return on stake?
Saturation is total stake divided by k. With the current values that is around 210Mio ADA.
And it is indeed the point at which additional stake will not give additional rewards
If the following sounds aggressive, or misaligned with the ‘spirit’ of Cardano, trust me or don’t, these are statements of fact, and thus beneficial to Cardano .
The infamous 1 Percent SPO of the ITN and now Shelly, slapped a group of SPO’s who had social media traction. Some cried, unfair! The winners tho, learned a critical life lesson, made proforma adjustments, shut up, dug in, and got in the cage.
I would JV a competent SPO farm with a strategic proforma at an initial loss as long as the numbers and partners were sharp, period. That’s called real business.
People making a-priori assumptions wrt SPO’s business decisions, character, experience, and objectives are signaling they haven’t a clue, and/or have an agenda.
Have you looked around at the PoS space recently? A demigod has been created, while critical, critical time has been strategically utilized by sophisticated, savvy, and highly intelligent PoS businesses who, kinda get why the tortoise is frequent road kill.
So deepau, you’re saying that people are choosing Stake Pool Operators (SPOs) based on their theoretical assumptions about what the SPOs themselves report to be with regard to their competence instead of actual results to signal competence?
You’re saying that Cardano Proof of Stake (PoS) is a powerful demigod tool and that smart pool operators will choose to run at a loss in order to gain traction and raise prices at a later date aka the Wal-Mart strategy? And, people who are not willing to run at a loss, that is to say stake pool operators with margins higher than 0% are worrying about sustainability now and as such are tortoises who will probably lose competitively to other staking pools, aka “die” ?
Can y’all feel the tension in the air right now? I can, I can feel down in my plums…
Warning! The following is a lot of what may seem like Maybe, I’m more stressed out about Cardano than ever.
I loathe pretentiousness so, nothing I write comes from that place. I don’t assume more or less of anything
I may be wrong, but I thought providing some color might be the simplest response. In 1533, a relative of mine wrote a brilliant libertarian treatise, Perfecting Human Expression. Many in my family survived intense hardship; genocide, and various other serious existential challenges. Around kindergarten, it sort of hit me that we aren’t the problem. In a more current expression: Invasive societies manifest global scale, human suffering.
Because I believe projects like Cardano have the potential to improve human life, I support and defend them by whatever means at my disposal. Perfect execution? Heck no! But, my intentions never waver.
Still reading? Wow. My bottom line, I believe in and defend the sanctity of free will, which necessarily requires minimizing centralized power. Free markets, no war, and constrained government.
K great. I’m with you on Freedom and believing Cardano will likely improve the future.
How does this relate to my incentives as a staker wanting to always choose nodes which offer 0% margin for staking?
% annualized unless otherwise noted
Aggregators like PoolTool help sourcing data. Please keep in mind, this is just a general idea of my ITN process, and, in this context, I rarely consider qualitative information. I’ll do the same for the main when we have more data.
1. Filter 90th to 95th percentile for block production stability.
2. Look for interesting and reliable return correlations.
3. Monitor epoch deltas such as: ratio of active/live stake, production,
Using an ITN benchmark of 10%, and with hard, production and stake cutoffs, this criteria, over the ITN period, enabled an above average return or alpha with below average volatility or beta.
Hope this helps.
I fully agree with you.
I have translated all the Yoroi apps into Dutch without getting any rewards for it. Thjat that mean the translation is bad???. No it just means I am commited to Cardano to make it the best system for block chain in the world and I could assist to make it more understandable for those Dutch who does not understand English perfectly
So, I went to pootool.io They will not let me sort by current return on stake (why?!). So, I see a couple of things:
- IOHK has more than 210 Million ADA, more than the maximum incentivized per @rene_securestaking
- 5.5% Return on Stake seems very possible now
If i filter by 0% margin pools I can see several 0% pools that have not made money yet but a few that have.
So…yeah, as a Staker I should find the most reliable 0% margin pool with the most ADA staked and go for it and I’ll probably get comparable returns to all the pools which charge a margin?
You can have a pool with more than 210Mio ADA (oversaturated). In that case the rewards will be capped as if the pool was exactly saturated so it will slightly decrease the RoS for all delegators in that pool