Stake pool performance vs margin

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John Doe needs to pick between two pools.

Let’s assume that the block reward is 1000 ADA/block and that 10M delegated ADA gets 10 slots for both pools.

The only difference between the two pools is the pool margin.

Scenario 1: Both pools mint all blocks

Both pools will get 10.000 ADA.

After subtracting the epoch cost and the 1% pool margin for pool A we’re left with 8910 ADA and John Doe will get 89.1 ADA

Stake pool B has a higher pool margin, 5%, so after we subtract all taxes John will get 85.5 ADA

In this first scenario, John Doe would be better off with pool A because it gets him 3.6 more ADA than pool B

Scenario 2: Pool A misses one block

Instead of getting 10K rewards, pool A will only get 9K.

After subtracting the epoch cost and the 1% pool margin, John Doe will get his share of 79.2 ADA.

In this scenarion John is way better with pool B because with pool A he would get 6.2 less ADA than with pool B.

He might get 3.6 more ada with pool A on a sunny epoch however a rainy epoch would set him back at least 6.2 ADA.

Pool performance is more important that tax!
The gains from a low margin pool will be easily wiped out if the pool does not perform properly.

A few words about myself: I’m the stake pool operator of the Hexadecimal pool — ticker HEX. My pool is up and runnig on mainnet and it’s ready to accept delegators.

I want to talk a bit about my performance on the Incentivized testnet.

Please note that ITN Performance might or might not correlate with mainnet performance. This is just me talking about my previous accomplishments.

I’ve created a spreadsheet with all the pools from the ITN ordered by ROS. To filter out any statistical outliers we’re going to look at pools with at least 100 blocks:

As you can see, my pool had a 12.75% ROS on the ITN which makes it the 3rd most profitable pool that also produced blocks on a consistent basis.

I will be providing the same reliability on mainnet, so if you’re looking to delegate to a pool, consider mine since I have a proven track record.

Thank you,

Timo


Stake pool performance vs margin was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.