Daedalus Stake Pool Ranking Explained
Updated: Aug 17, 2020
A lot of new shiny things popped up in our newly minted Daedalus wallet for Shelley main net on Cardano. Let's dive closer into what ticker symbols mean once you click on any of the pools. For our purposes, we clicked on our FAY pool. Assumptions are going to be the same regardless on where you look.
Until the current epoch 209 ends, ranking in Daedalus is entirely random. Pools aren't producing any blocks and thus the most meaningful metric is currently unavailable. While we wait for epoch 209 to end, let's have a look at different parameters of each pool as showcased in Daedalus wallet. Above picture showcases inside of Daedalus delegation center.
Stake Pool Name: Here you will find the name of the pool in full. E.g. Cryptofay
Ticker: Under the pool, there is a ticker of a particular pool. This ticker is an easy and quick way to look up pools in wallets or tracking web-sites. It can be as short as 3 letters but 5 maximum. Cryptofay ticker is listed here as FAY.
Pool ID Address: The string of random letters and numbers represents a publicly available and verifiable address of this particular pool. This is helpful if you wish to double check the validity of the pool itself. Sometimes, malicious actors may wish to impersonate other operators by running similar names or tickers. This helps you to find them out.
Description: Here you can find few words from the operator to peak your interest. Sometimes, you may be able to scroll within the box to read little more. Not all allowable characters fit within the first view.
URL: This is website address that allows you to visit operator's web-pages where you can learn more about them. It is an additional representation tool.
Rank: This is as simple as it sounds. Daedalus works its magic in the background to rank the pools from the most desirable ones to the least desirable ones. This is a quick and easy solution for anyone just to delegate quickly. It has some flaws to it so you shouldn't rely on it entirely. Also, during current epoch 209, ranking isn't substantiated.
Controlled Stake: Number represents total amount of ADA presently delegated to this particular pool. You can see in the above screen shot that it says 0. That is because print screen was taken shortly after registration. In the future, you will be able to see exactly how many tokens have been staked with this or any other pool. This metric is important because it may tell you about how close or not is the pool to the saturation point.
Pool Margin: This is the margin denominated in % points. Stake pool operator decides how much of total pool rewards will be allocated for their services. E.g. if your pool earns 100 ADA in rewards, pool operator gets 5% and 95% is then sent back and distributed to all stakeholders proportional to their stake. In real terms, looking at this solely may not be best predictor of pool's performance. Small fee percentage can in the end cost you more if the other factors do not align with the pool long-term viability. E.g. if the very same pool has a small pledge or has issues in uptime and reliability.
Pledge: Every pool operator has an opportunity to set the amount of pledge to their pool. These are owner's own resources that are locked up in the pool during operation. It generally shows commitment and dedication for every potential stakeholder about intentions of the stake pool operator. E.g. this screen shot shows that the pool operator has pledged 168.3k in ADA. It means that the owner put 168.3k ADA as a guarantee for the pool. Generally, the higher the pledge, the more attractive the pool is. There isn't a minimum requirement for owners to pledge. Thus it is important to investigate on your own why a particular pool has such and such pool pledge. Small pledge does not automatically mean that pool is unreliable or otherwise unsuitable for staking,
Cost per epoch (CPE): This metric is set by pool operator to denominate their minimum fixed cost. Cardano protocol caps this minimum at 340ADA per epoch (5 days). Owner cannot set it any lower and this is the reason why almost every pool has this set by default. You can think of these rewards for the stake pool as a preferred stock. This CPE is paid prior stakeholders get their rewards redistributed. This is an important metric to understand because a small pool may generate just enough rewards to cover epoch outstanding fees but not have enough for the delegators to draw from. This problem generally fades away quickly as the stake pool attracts more and more delegators and the fee gets split down amongst more stakeholders. Hence, if you like the pool and where it is headed, then you don't have to worry about it in the long-term.
Produced blocks: Number here showcases how many blocks has this pool produced over its lifetime. It will show you if this pool actively participates in the protocol producing blocks for which the system produces rewards. No blocks, no rewards. That simple. Initially, many pools will have minimum or no blocks produces. This is normal as we are in the beginning of the new Shelley main net era.
To sum up.
When you delegate/stake your ADA with stake pool operator, you do it exclusively through your wallet. ADA never leaves your custody. Don't let anyone tell you otherwise.
Any and every fee incurred once you delegate your stake to the pool does NOT come out of your staked funds. These fees are extracted from rewards only. Your funds will NOT diminish over time based on these. You will, however, need to pay small transaction fee when you will delegate your ADA through your wallet for the first time. This is a standard transaction fee set by the network as if when you move funds between various wallets. Similarly, un-delegation or re-delegation follows same logic.
Always check all parameters of the pool you are interested in. The pool performance is indicative of a mix of parameters which make it a good or bad choice. A single parameter is not the only deciding factor. Take time to learn about each to understand their background. You wish to be delegated to the quality pool. Otherwise, choosing incorrect pool may cost your time and resources initially. Initial weeks may be turbulent until the entire ranking system stabilises.
Keep in touch with your pool operators on their social to stay up to date. Check periodically for any changes in stake pool key parameters. Such as withdrawn or diminished pledge, increased fees, high latency and low up-time, etc.
Undecided about your pool yet? We invite you to consider staking with us. We are small community pool that would welcome you. Reach out to us on telegram link in the footer of the page. Pool Ticker: FAY
Pool ID: 9ac6f4118dccc20d978e7239d73d47e939cc594c350effa8711f5ac4