9

"Stake pool operators are rewarded for running the protocol in the form of incentives that come from the transaction fees and from inflation of the circulating supply of ada", as mentioned at this docs

In case a small stake pool does not get elected for block creation, how much of the running costs would be covered assuming that minimal hardware confguration is employed on the stake pool?

6

If the stake pool does not create a single block in the epoch, it receives no rewards.

If it is elected and is able to create at least one block, it receives the fix pool fee, which is right now minimum of 340 ADA plus the margin fee.

Minimal hardware configuration is debatable, but you can run a pool as low as 1 EUR (about 1ADA with today prices) per epoch.

4

In case a small stake pool does not get elected for block creation, how much of the running costs would be covered

If a pool produces zero blocks, it gets zero rewards.

If a pool produces one block per year, it will receive a rewards only for the epoch in which that block was produced.

You can work out roughly how many blocks per epoch you would generate for any given stake, and from that you could estimate your rewards and compare that to the cost of running your pool.

Bear in mind that the block rewards may reduce over time (part comes from the money expansion that reduces over time), although smart contracts and other functionality may also bring more transactions and more fees that could also increase them.

It's possible the 340 ADA minimum reward may also be changed in future, which could result in lower rewards for small pools (though on the flip side, this would also make it easier to attract delegations as a small pool because the ROI would be less poor delegating to a small pool).

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