Saturation FAQ
What is a stakepool's saturation level?
A stakepool's saturation level is an indication of how much is staked to that pool relative to the network. Once the active stake delegated to a pool crosses the saturation threshold it becomes over saturated.
What is the point of saturation?
Saturation helps keep the size of individual stakepools below a threshold. This ensures that individual pools do not becomes too big and helps keep the network as decentralised as possible.
What happens if a pool becomes over saturated?
Once a pool is over saturated it starts to receive diminishing rewards. The % reward return for that pool will start to drop as low as 2% depending on how over saturated they are.
How do I find out how saturated a pool is?
Most pool explorers have this listed for pools. For example, take a look at ADAPools - they have a % saturation for a pool on their "Stake" column.
What is the current saturation level?
Currently a pool becomes over saturated when it has more than 64 Million ADA delegated to it.
Can the saturation level change?
Yes the saturation level can change and is relative to the number of active stakepools. Sometimes this is known as the K parameter.
Is there a concept of slashing?
There is no real concept of slashing. A stakepool's rewards are adjusted by the pool's performance for that epoch. The rewards are multiplied by a fraction of the blocks produced by that pool in the epoch. A perfectly performing pool will have a fraction of 1 (no reduction). For example, if a pool minted 8 out of a possible 10 blocks, and the pools rewards were 1000, the actual rewards received would be (8/10 * 1000) = 800.