Worthwhile to Operate Stake Pool?
IOG has just released its Shelley Testnet staking calculator.
At first glance, we see that reward yield for delegators has gone down quite drastically from ~10% during ITN to ~4.6% for Shelley mainnet.
Although this is widely expected, it will still be pretty disappointing for investors looking for high returns in the crypto space. For perspective, one should note that bank yields globally hover around 0%.
There is no free lunch in the world. The lower returns also make the Cardano eco-sytem more sustainable for the long-term.
One heartening point is that marginal rewards from increasing pledge tapers off quite dramatically (using the start of mainnet settings). Putting up a 200k vs 2m ADA pledge results in a visible, but not too significant yield difference.
While taking into account the issue of Sybil attacks with the introduction of pledges, this does not preclude small pool operators from taking part. I feel that this is important as it’s in line with the spirit of decentralization.
We probably do not want to see FAANG among pool operators!
For more details on the reward parameters settings, please read the blog post “Iterating for growth with IOHK research“.
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