Stake Pool Performance

A stake pool elected as a slot leader is responsible for producing new blocks for the Cardano network. If the stake pool does not produce a block, the slot will remain empty and the blockchain will not be extended. The Cardano blockchain can tolerate a number of missing blocks, but the majority of blocks expected to be produced (at least 50% + 1) must be generated during an epoch.

Although occasionally missed blocks don’t affect the extension of the blockchain as a whole, an unresponsive elected stake pool decreases the overall performance of the network, which is undesirable.

Stake pool performance is calculated according to its expected activity as the ratio of a number of blocks a stake pool produces in a given epoch versus the number it was capable to produce. For instance, if the stake pool could produce 100 blocks (based on its stake and the chance to be elected) in an epoch, but it actually produced just 50 blocks, its performance would be 50%.

Poor stake pool performance decreases the number of rewards that a pool and its members receive, thereby decreasing its attractiveness to delegators. To improve its performance, a stake pool should have good network connectivity, be run on a reliable system, and actively participate in block production and verification.

The higher the pool’s performance, the more attractive it will be to delegators since it will offer higher rewards and incentives.