Reduce minPoolCost to 75 ada
Discussed in the Governance Review for epochs 653 to 655.
On-chain changes
- EconomicMin Pool Cost170 ₳→75 ₳
Abstract
This governance action proposes reducing minPoolCost from 170,000,000 Lovelace (170 ada) to 75,000,000 Lovelace (75 ada), a decrease of approximately 55.9%. No other protocol parameters are changed by this action.
Motivation & rationale
minPoolCost. minPoolCost was reduced from 340 ada to 170 ada in 2023 (PCP-001), but the relief that reduction provided has been substantially eroded by the continuing decline in reserve-funded block rewards: the delegator penalty on single-block pools, which fell to ~28.3% after the 2023 change, has since climbed back to ~52.8% and is projected to reach 100% by around epoch 758 (February 2028) if unaddressed. IO Research's updated incentives report has also reversed its earlier position, now assessing that a high fixed-fee floor favours rather than deters Sybil-style stake fragmentation by large operators. PCP-006 (Cerkoryn, 2026) proposes a further reduction to 75 ada as an evidence-based interim step, pending the more structural solution of a proportional minPoolMargin (CIP-0023).
minPoolCost Technical Evaluation and Committee Process
The current 170 ada setting was recommended by Intersect's Parameter Committee in PCP-001 (2023) and enacted in epoch 445 (October 2023), prior to the availability of on-chain Parameter Update governance actions under CIP-1694. The proposed further reduction to 75 ada is the subject of PCP-006, authored by Cerkoryn and published on the Cardano Forum on 30 March 2026, which explicitly requests Intersect Technical Steering Committee (TSC) endorsement as part of its acceptance criteria. The TSC ratified this reduction on 2026-07-09. This governance action, and the evidentiary record below, is intended to support that endorsement process and the subsequent on-chain vote.
minPoolCost Inflation Model and Declining Reward Economics
At Shelley launch, minPoolCost was calibrated against prevailing ada price, the then-current inflation schedule, and estimated SPO operating costs. All three inputs have shifted materially since 2020: block rewards have fallen from roughly 1,800 ada to around 300 ada per block as the reserve depletes, while infrastructure costs have broadly risen. minPoolCost now represents a disproportionately large share of total rewards for small pools producing only one or a few blocks per epoch, as shown using PCP-001 appendix data (Epoch 415, approximate gross reward per block ~300 ada):
| Blocks/Epoch | minPoolCost (ada) | minPoolCost as % of Gross Reward |
|---|---|---|
| 1 | 340 | ~113% (no reward) |
| 1 | 170 | ~57% |
| 1 | 75 | ~25% |
| 2 | 340 | ~57% |
| 2 | 170 | ~28% |
| 5 | 340 | ~23% |
| 5 | 170 | ~11% |
minPoolCost Competitive Dynamics and Treasury Impact
Because delegators can observe a pool's advertised Return on Staking (RoS), small pools operating at the minPoolCost floor are structurally disadvantaged relative to larger pools. Lowering minPoolCost does not force any SPO to reduce their fee, but market pressure is expected to lead small pools currently at the floor to adopt the new, lower floor, improving their competitiveness. This is directly relevant to stakePoolTargetNum (k): a healthy ecosystem of smaller pools must be economically viable before any future k increase is effective, so improving small-pool economics via this reduction is a prerequisite step, not an alternative. Separately, a reduction in minPoolCost marginally decreases treasury inflow; the Parameter Committee's economic working group assessed, in connection with the 2023 reduction, that treasury balance was above forecast projections and that a reduction posed no risk to long-term economic stability. No evidence has since emerged to change that assessment.
minPoolCost Sybil Attack Considerations
The original rationale for minPoolCost as a Sybil mitigation rested on imposing a minimum cost floor on an adversary seeking to accumulate controlling stake by operating pools at a loss. PCP-001's 2023 analysis found that, under a non-myopic game-theoretic equilibrium, minPoolCost is not strictly necessary to prevent Sybil attacks, but under an adversarial-actor model (where an attacker is prepared to subsidise pool operation indefinitely to pursue consensus manipulation), it imposes a tangible cost. IO Research's updated incentives report has since revised this assessment, concluding that a high fixed-fee floor now more plausibly favours Sybil-style stake fragmentation by large, well-capitalised operators (who can split stake across many pools to harvest the fixed fee repeatedly) than it deters it, and recommends minPoolCost be lowered toward zero, ideally paired with a proportional minPoolMargin mechanism. This weakens, but does not eliminate, the case for preserving a high floor on security grounds, which is why this proposal recommends a further staged reduction to 75 ada rather than an immediate move to zero.
minPoolCost Empirical Evidence Since 2023
Two years of post-2023 data are now available that were not available at the time of PCP-001. Contrary to "race to the bottom" concerns raised in 2023, the market did not collapse toward the new floor: 340 ada remained the dominant fixed-fee setting across pool sizes after the reduction to 170 ada, with only smaller, competitively positioned pools adopting the lower floor, thereby answering the empirical question PCP-001 left open. The IOR report also documents persistent ecosystem stratification: of 1,614 active pools, 873 operators (54%) remain below the roughly 3M ada delegation threshold associated with consistent block production, while only 289 pools could theoretically saturate given current delegated stake, indicating the 2023 reduction alone did not resolve the underlying structural pressure.
minPoolCost Live Proposal PCP-006 and Future Trajectory
As of 30 March 2026, PCP-006 (Cerkoryn) requests a reduction from 170 ada to 75 ada, calibrated to restore the delegator penalty on single-block pools closer to the range experienced in early Shelley, and framed as a stopgap while the more complete structural solutions, such as a minPoolMargin parameter (CIP-0023), work toward implementation. Beyond this proposal, the long-term trajectory for minPoolCost points toward either zero or functional irrelevance: either via continued incremental Parameter Update reductions (as argued more aggressively by CIP-0074), or via structural replacement through CIP-0023's minPoolMargin, which scales proportionally with pool rewards and would eliminate the competitive distortion inherent in a fixed fee. CIP-0082 lays out a staged combined roadmap across minPoolCost and stakePoolTargetNum (k) consistent with this sequencing. This proposal is the near-term, low-risk step available now, ahead of and independent from that longer structural process.
minPoolCost Proposed Parameter Change
minPoolCost will be decreased from its current setting of 170,000,000 Lovelace (170 ada) to 75,000,000 Lovelace (75 ada), a decrease of approximately 55.9%.
minPoolCost Consistency with Guardrails
- PARAM-05a (DRep vote for governance-critical parameters):
minPoolCostis listed among parameters critical to the governance system. The constitutional minimum is more than 50% of active voting stake and the current ledger threshold for the economic parameter group is 67% of the applicable DRep voting power. Constitutional Committee approval is also required. A minPoolCost parameter change does not require SPO approval. - PARAM-06a (90-day notice): PCP-006 was published on the Cardano Forum on 30 March 2026. This governance action is not intended for submission before 30 June 2026, satisfying the notice period; it also builds on public discussion dating back to PCP-001 (2023) and community advocacy since 2022.
- MPC-01: the proposed setting (75,000,000 Lovelace) is positive.
- MPC-02: the proposed setting is well below the 500,000,000 Lovelace ceiling.
- MPC-03: the proposed 75 ada setting is calibrated, per PCP-006, to restore the delegator penalty on single-block pools to a level closer to that experienced in early Shelley, reflecting current SPO operating costs and reward levels rather than the 2020 launch-era calibration.
Reversion Plan
minPoolCost. This change affects reward distribution only and has no bearing on block production, propagation, or execution limits, so since it has not been reduced to zero, it carries minimal security or performance risk. If monitoring reveals adverse effects, for example, evidence of Sybil-style stake fragmentation exploiting the lower floor, or unexpected treasury impact, then minPoolCost could be reverted to 170 ada via a subsequent action. However, minPoolCost is enforced only at the point a pool registers or updates its certificate; it is not retroactively re-applied to certificates already on-chain. Consequently, SPOs who lower their declared cost below 170 ada while the floor is 75 ada cannot be compelled to raise it back to 170 ada if the parameter is later reverted: their existing registration remains valid until they next choose to submit a new certificate. Reversion would therefore only constrain new pool registrations and any pool that voluntarily re-registers after the revert; it would not force any DApp, script, or transaction-level rework, nor would it force already-registered SPOs to change their pricing.
An optional CIP-179 survey is linked to this action. Survey responses do not count toward ratification of this governance action.
Rationale highlights
Why some of the largest DReps voted for and against, in their own words. About vote rationales
I vote NO on “Reduce minPoolCost to 75 ada.” This proposal conflates the delegator reward penalty affecting small pools with the long-term sustainability of stake pool operators. Reducing minPoolCost to 75 ADA may improve the displayed return for delegators,...
I vote NO on “Reduce minPoolCost to 75 ada.”
This proposal conflates the delegator reward penalty affecting small pools with the long-term sustainability of stake pool operators.
Reducing minPoolCost to 75 ADA may improve the displayed return for delegators, but it does not improve block production frequency, delegated stake, operating costs, or income stability. Seventy-five ADA is not sufficient to support sustainable pool operations and lowering the floor may instead increase competitive pressure on operators to reduce fees further.
A larger number of pools does not automatically make the network more decentralized. What matters is the number of genuinely independent operators, the distribution of stake, multi-pool concentration, pledge, infrastructure diversity, and whether operators have a sustainable economic foundation. Increasing the number of economically unviable pools does not provide meaningful decentralization.
Cardano needs a broader redesign of stake pool incentives, including minPoolMargin, k, pledge influence, the reward curve, and incentives for multi-pool operation. Reducing one parameter in isolation does not address these structural issues.
This proposal offers a partial adjustment that may weaken operator sustainability without solving the underlying incentive problem. I cannot support treating a short-term improvement in delegator returns as a sufficient decentralization policy. Therefore, I vote NO.
「Reduce minPoolCost to 75 ada」にNOを投票します。
本提案は、小規模プールにおけるデリゲーターの報酬低下と、SPOの持続可能性を混同しています。
minPoolCostを75 ADAへ下げれば、デリゲーターの表面的な利回りは改善します。しかし、ブロック生成頻度、委任量、運営コスト、収入の安定性は何も改善しません。75 ADAは持続可能なプール運営を支える金額ではなく、実際にはSPO間の値下げ圧力を強める可能性があります。
また、プール数が多ければネットワークが分散化するとは限りません。重要なのは、プールの総数ではなく、独立した運営主体の数、ステークの分布、マルチプール運営による集中、プレッジ、インフラの多様性、そして各運営者が長期的に活動できる経済基盤です。採算の取れないプールを増やしても、実質的な分散化にはつながりません。
現在必要なのは固定費だけをさらに引き下げることではなく、minPoolMargin、k、プレッジ、報酬曲線、マルチプールへのインセンティブを含む、ステークプール報酬制度全体の見直しです。
本提案は根本的な問題を解決せず、SPOの持続可能性を弱めかねない部分的な変更です。短期的な利回り改善を分散化と同一視することには賛成できないため、NOと判断します。
Allowing a free market with respect to minPoolCost is more consistent with the ethos of crypto. It's unclear whether this will actually allow smaller pools to compete more effectively with established pools in a real on-the-ground measurable way. But,...
Allowing a free market with respect to minPoolCost is more consistent with the ethos of crypto. It's unclear whether this will actually allow smaller pools to compete more effectively with established pools in a real on-the-ground measurable way. But, history seems to indicate that allowing the free market to do its thing (barring any tragedy of the commons externalities) is generally the more fruitful path. While a minPoolCost of zero would be a true free market, this seems right directionally.
As a DRep and SPO, i am voting ❌NO on this proposal, because we need a minMargin parameter of at least 5% first before thinking about to lower minPoolCost even more. Does not make any sense to me, there is still a threshold which puts small pools in a...
As a DRep and SPO, i am voting ❌NO on this proposal, because we need a minMargin parameter of at least 5% first before thinking about to lower minPoolCost even more. Does not make any sense to me, there is still a threshold which puts small pools in a disadvantage. Getting rid of minPoolCost while introduction minMargin is the way to go! But i am against any lowering of minPoolCost without introducing a minMargin parameter with a sustainable number parameter first.
Generating enough transaction fees for Cardano to sustain itself is one of the toughest challenges we face. But there are two sides to the equation. Network revenue is just the numerator. The denominator is operating costs. And reducing operating costs is...
Generating enough transaction fees for Cardano to sustain itself is one of the toughest challenges we face. But there are two sides to the equation. Network revenue is just the numerator. The denominator is operating costs. And reducing operating costs is arguably the only other way we have to meaningfully affect self-sustainability.
minPoolCost prevents pools from competing to lower operating costs, and it props up pools that cannot operate as cost-efficiently. That’s likely one reason we still have roughly 3,000 registered pools and over 1,600 active pools even though stakePoolTargetNum is set to 500. Having a minimum margin instead (CIP-23) fixes the issue as well, but at the cost of time. It is at least two hard forks and another parameter change governance action away, but our endeared community SPOs are already being forced to close left and right.
Personally I want as many honest pools as possible to be successful, and the original incentives structure was beautifully designed to do exactly that. But we have to give the parameters some tender loving care. To get where we want to be, successful pools should be able to compete primarily on pledge, and then on operating costs, without sacrificing performance. Lowering the minimum fixed fee is the first step to get there, and I'm putting my own money where my mouth is to see it through.
If we want Cardano to last, we need to attack the problem from both directions and let SPOs fairly compete to lower costs.
Vote to lower minPoolCost to 75.