# How is a stakepool rewarded?

Let's assume I run a stake pool, where I have pledged X ADA, have received delegations of Y ADA and have set a 1% fee.

When my pool creates a block, how much ADA is awarded to my pool and how is this amount distributed to me and the delegators, with respect to X and Y?

Let's assume your pool has the below configuration,

2. Margin - 1%
4. Delegation from all delegators - 5000 ADA

We will not discuss the reward calculation timing in this question, as it is a topic for another question.

When reward calculation happens, pool performance is calculated. Which in simple terms is how much total stake the pool controls across all pools ie. this pool controls (X+Y) note - pledge + delegation and the number of blocks it should ideally mint based on the stake it controls. Based on the performance, a pool is set to receive some ADA, for this pool let's keep that ADA to be 1000 for 1 block minted.

Now we have, Total Rewards for the pool and delegators - 1000 ADA

Next, the protocol will calculate pool fees. Pool fees are the fixed cost + margin.

In this case, pool fees are as below

fixed cost + ((reward-cost)*0.01) = 340 + 6.6 ADA

Now we have pool fees = 346.6 ADA

remaining rewards for the delegators = 1000 - 346.6 = 653.4

Next, the protocol will calculate rewards for the delegators from the remaining ADA, which is a straightforward process, each delegator gets rewards as per the share of their stake.

Considering there are 3 delegators including the owner's pledge

1. owner pledge - 5000 ADA (50%)
2. delegator 1 - 2500 ADA (25%)
3. delegator 2 - 2500 ADA (25%)

The reward distribution is as below,

Available Rewards to be distributed = 653.4 (note remaining after pool fees)

1. owners stake rewards - 326.7 ADA
2. delegator 1's rewards - 163.35
3. delegator 2's rewards - 163.35

Now, NOTE that the owner's stake rewards + pool fees are paid to the reward account itself. The owners don't get the stake rewards into their own accounts.

So the pool reward account will get = 326.7 (pledge staking reward) + 346.6 (pool fees) = 673.3

The delegator rewards are paid to the respective staking addresses.

Important to note, if the pool fee is 100%, which means all of the rewards are taken by the pool and nothing is left for the delegators.

Here's an example of a pool running at 100% fees that it produces 0 rewards for the delegators. PRIVATE POOL

• Thanks for your response. It makes sense. One final question, how does the pledge affect the reward per block. E.g. all other things being equal, how does the block reward changes, if I pledge X ADA as compared to if I pledge 10*X ADA? May 27, 2021 at 17:13
• @Cryptovios pledge has an influence on the total rewards a pool is set to receive. In the above scenario, more pledge ADA will increase 1000 ADA to be 1010 ADA JUST an example. How much influence the pledge has is based on the protocol param `a0`. There are more details about the formula but I think it is a topic out of the scope of this question. May 27, 2021 at 17:55
• what APY would someone typically get who decides to run the whole pool themselves and just stake the full 64mm? Jun 1, 2021 at 22:28
• Is the fixed cost of 340 Ada for each block mined during an epoch, or lump sum at the end of the epoch subtracted once from the total rewards? Apr 26 at 18:13