Registering a stake pool

There are multiple components to be aware of when running a stake pool:

  • your NodeId: it is the identifier within the blockchain protocol (wallet will delegate to your stake pool via this NodeId);
  • your VRF key pairs: this is the cryptographic material we will use to participate to the leader election;
  • your KES key pairs: this is the cryptographic material we will use to sign the block with.
  • the stake pool Tax: the value the stake pool will take from the total reward due to the stake pool before distributing rewards (if any left) to the delegators.

So in order to start your stake pool you will need to generate these objects.

The primitives

VRF key pair

To generate your VRF Key pairs, we will utilise jcli as described here:

jcli key generate --type=Curve25519_2HashDH stake_pool_vrf.prv

stake_pool_vrf.prv file now contains the VRF private key.

jcli key to-public --input stake_pool_vrf.prv stake_pool_vrf.pub

stake_pool_vrf.pub file now contains the VRF public key.

KES key pair

Similar to above:

jcli key generate --type=SumEd25519_12 stake_pool_kes.prv

stake_pool_kes.prv file now contains the KES private key

jcli key to-public --input stake_pool_kes.prv stake_pool_kes.pub

stake_pool_kes.pub file now contains the KES public key

Choosing the Tax parameters

There are 3 values you can set to configure the stake pool's Tax:

  • tax-fixed: this is the fixed cut the stake pool will take from the total reward due to the stake pool;
  • tax-ratio: this is the percentage of the remaining value that will be taken from the total due
  • tax-limit: a value that can be set to limit the pool's Tax.

All of these values are optionals, if not set, they will be set to 0. This will mean no tax for the stake pool: rewards are all distributed to the delegators.

So how does this works

Let say you control a stake pool SP, with 2 owners (O1 and O2). During epoch 1, SP has created some blocks and is entitled to receive 10_000.

Before distributing the 10_000 among the delegators, SP will take its Tax.

  1. we extract the tax-fixed. If this is greater or equal to the total (10_000) then we stop there, there is no more rewards to distribute.
  2. with what remains the SP extracts its tax-ratio and checks the tax from the ratio is not greater than tax-limit.
  3. the total SP rewards will then be distributed equally to the owners (O1 and O2). Note that if the --reward-account is set, the rewards for SP are then distributed to that account and nothing to O1 and O2.

For example:

totalfixedratiolimitSPO1O2for delegators
takes 100%1000001/1010000500050000
fixed of 10001000010000/1010005005009000
fixed + 10%200010001/1001100550550900
fixed + 20% up to 150200010001/51501150575575850

The options to set

--tax-limit <TAX_LIMIT>
    The maximum tax value the stake pool will take.

    This will set the maximum the stake pool value will reserve for themselves from the `--tax-ratio` (excluding `--tax-fixed`).
--tax-ratio <TAX_RATIO>
    The percentage take of the stake pool.

    Once the `tax-fixed` has been take, this is the percentage the stake pool will take for themselves. [default: 0/1]
--tax-fixed <TAX_VALUE>
    set the fixed value tax the stake pool will reserve from the reward

    For example, a stake pool may set this value to cover their fixed operation costs. [default: 0]

creating a stake pool certificate

The certificate is what will be sent to the blockchain in order to register yourself to the other participants of the blockchain that you are a stake pool too.

jcli certificate new stake-pool-registration \
    --kes-key $(cat stake_pool_kes.pub) \
    --vrf-key $(cat stake_pool_vrf.pub) \
    --start-validity 0 \
    --management-threshold 1 \
    --tax-fixed 1000000 \
    --tax-limit 1000000000 \
    --tax-ratio "1/10" \
    --owner $(cat owner_key.pub) > stake_pool.cert

The --operator flag is optional.

And now you can retrieve your stake pool id (NodeId):

jcli certificate get-stake-pool-id stake_pool.cert
ea830e5d9647af89a5e9a4d4089e6e855891a533316adf4a42b7bf1372389b74

submitting to a node

The jcli transaction add-certificate command should be used to add a certificate before finalizing the transaction.

For example:

...

jcli transaction add-certificate $(cat stake_pool.cert) --staging tx
jcli transaction finalize CHANGE_ADDRESS --fee-constant 5 --fee-coefficient 2 --fee-certificate 2 --staging tx

...
jcli transaction seal --staging tx
jcli transaction auth --key owner_key.prv --staging tx
...

The --fee-certificate flag indicates the cost of adding a certificate, used for computing the fees, it can be omitted if it is zero.

See here for more documentation on transaction creation.