Deciding which stake pool is the best for you
There are more than 1000 stake pools available. Choosing to which ones delegate your stake is an important decision. There are many differences between all the stake pools. We can classify those differences into two broad categories:
- From the protocol standpoint
- Off-protocol considerations
From the protocol standpoint
The key differentiator from the protocol point of view is the performance of the stake pools. Daedalus Rewards Wallet Delegation Center displays relevant performance indicators for all the available stake pools.
Let's see what these performance indicators mean and how to interpret them to help you make the best decision about your stake delegation.
- Rank: Daedalus ranks stake pools according to its desirability, which is a function of the pool's costs per epoch, its margin, and whether it is saturated or not. The most desirable pool gets Rank 1, the second gets Rank 2, and so on.
- Controlled Stake: The percentage of total stake that is currently delegated to the stake pool.
- Pool margin: The share that the stake pool takes from the rewards before distributing them among its delegators.
- Cost per epoch: The fixed fee per epoch that the stake pool charges to cover its operating costs.
- Produced blocks: The total number of blocks that the stake pool has produced up to date.
- Pledge address balance: This is the amount that the stake pool owners commit to delegate to their stake pool. One can expect that operators with higher balances delegated to their own pool have more incentives to perform well.
The above are the key performance indicators. However, there are tools created by community members that display other useful information: ROI, number of delegators, active epochs, current reported height, involvement in adversarial forks, and their performance. It is a good idea to consider these other indicators when selecting a stake pool to delegate your stake. Some nice community built tools are
There are some off-protocol factors that you may want to consider before delegating your stake. For example, you might be interested in delegating to a stake pool that:
- Is operated by someone that you trust
- Is operated by an NGO
- Runs on green energy
- Donates part of its profit to a particular cause that you want to support
- Is on a particular location you like
- Is owned by more than one stakeholder
- Provides you information about their performance regularly
- Has an app that allows you to track your rewards easily
You can find this kind of information on the stake pools' websites. Daedalus and the Explorer provide links to the websites reported by the stake pools when they registered.
Now you know everything you should consider to choose the best stake pool to maximize your rewards.