Why should I NOT choose a 0% Margin Pool to stake with?

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 :wink:.

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.

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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…

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Warning! The following is a lot of what may seem like :cloud: :laughing: 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 :pray:

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.

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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?

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I see.

% annualized unless otherwise noted

Aggregators like PoolTool :clap: 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.

Good luck :+1:

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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

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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:

  1. IOHK has more than 210 Million ADA, more than the maximum incentivized per @rene_securestaking
  2. 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

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What you are not seeing and will not see until rewards are given out on epoch 215 or after is actual RoS and performance metrics of pools.

Why?
The first 2 epochs had a performance setting = to 1.
This means so long as they had a block they would earn the full value of rewards in proportion to their stake.
After epoch 212 this changed because D reduced below .8 to .78 for epoch 213 and will again to .76 in 214. With this change you will see the rewards change in relation to blocks created and it will give you more accurate data to what an epoch is supposed to look like. D reduction also means more and more blocks will be made by the SPO’s and you will have more actual data to calculate and visualize performance.

Remember this is a long road and we are just at the very start.

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The suggestion that pools smaller than 210Mio ADA do not suffer reduced rewards, is in my opinion incorrect. Please see this topic for the explanation

Hi, please have a look at the following article (and related blog post) to better understand the concept of saturation and why not only the largest pools are at risk of occasionally seeiing there rewards capped.

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Be aware this article is under dispute. I personally believe its conclusions to be false. Do your own research.

Agreed, but many delegators won’t see that. They will be primarily impacted by ‘0%’. It’s a great way to market a pool to future delegators who will only care about the bottom line, and there will be plenty more of those mainstream less-informed types in this ecosystem as cryptos go mainstream, particularly as the global economy remains in a state of stagnation.

Hi Rene, I’m glad you were able to attract stakers partly thanks the 0 margin. I opened a pool a few days ago with 0.9 margin but nobody got interested yet. Do you believe it would be a good start-up strategy to lower it to 0% as you did? What advice would you give me in general to attract more stakers? Thank you! Giuseppe

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this is false affirmation. I have other sources of income, I can make my pool running a full year without issues.

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Strongly disagree. The cost calculation/sustainability considerations are solely determined by the pool operator’s individual cost parameters. The operator may also set the fixed fee to a higher value.

Your generalized statement is just not correct/ not applicable.

Well, his statement is from Aug-2020 - it was likely not meant to be an eternal truth. Here my 2ct on the current pool reward dilemma.

Let’s not forget that hardware costs, servers and energy are very competitive. There are several VPS options now some can offer cheap hosting.
ADA on the other hand, appreciates in value. Having the option to cost the fees to 0 or whatever the pool operator wants would be exceptional.