With Cardano the impact of pool fees on rewards reduce as stake increases, up until the saturation point is reached. For these reasons a flat fee approach is sub-optimal, they reduce rewards when a pool is small and needs to grow and they offer no resistance to reward killing over-saturation as they get too big.
Why our fees are better than flat fees:
- Encourages growth, no fees until pool exceeds 50% saturation
- Low fee of 1% between 50 to 65% saturation
- Gears pool towards optimal stake and therefore optimal rewards
- Increased Saturation Protection as stake grows too large
- No surprises
|VS1 Pool Saturation||Margin Fee||Up to Stake|
|0 - 50%||0%||31.70M ₳|
|50% - 65%||1%||41.21M ₳|
|65% - 80%||2%||50.72M ₳|
|80% - 95%||3%||60.23M ₳|
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Without a saturation mitigation strategy even a 0% pool is likely to be less profitable over the long term, the slower the pool recovers from over-saturation the more devastating the losses. Critically even the most active stakers are slow to react as they don't realize the drop in rewards until it hits their wallets 2 epochs later!
With Saturation Protection our pools automatically regulate stake via a progressive fee structure which ramps up in the final 5% of saturation. This brings back delegation towards an optimal stake preventing the pool from reaching over-saturation which massively impacts rewards.
- Enables highly profitiable set and forget staking
- Actively combats over-saturation - before it impacts rewards
- Discourages new stakers when pool is under threat of saturation
- Encourages active stakers to migrate before pool becomes saturated
Rewards per epoch comparison between VS1 pool and various flat fee pools with a personal stake of 100K ₳, comparison does not track rewards lost due to over-saturation!
|Saturation||VS1 Pool||1% Pool||2% Pool||3% Pool|
|50%||77.65 ₳||76.86 ₳||76.08 ₳||75.29 ₳|
|65%||77.11 ₳||77.11 ₳||76.32 ₳||75.54 ₳|
|80%||76.48 ₳||77.26 ₳||76.48 ₳||75.69 ₳|
|95%||75.80 ₳||77.37 ₳||76.58 ₳||75.80 ₳|