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About stake pools, operators, and owners

A stake pool is a reliable server node that represents the combined stake of various stakeholders in a single entity. Stake pools use the Cardano node to form the backbone of the Cardano network by processing transactions and validating and producing blocks.

Stake pool roles include a stake pool operator and one or more stake pool owner(s). It is important to note the conceptual differences between the two:

  • A stake pool operator is the owner of the cold and VRF signing keys used to create the stake pool. The operator configures and maintains stake pool infrastructure and is responsible for monitoring it. The operator can register, re-register, or retire a stake pool, update certificates, and ensure that the block-producing node can sign and validate blocks and process transactions.
  • A stake pool owner is determined by the stake signing keys used in stake pool creation. The owner's pledge stake is intended to provide protection against Sybil attacks.

Usually, the stake pool operator and the owner are the same person. However, a stake pool can have multiple owners that choose to combine their pledge. It should be noted that the stake pool's declared pledge must be met by the combined stake in the owner's wallets and failure to do so will result in the pool being unable to produce blocks.

All operator and owner rewards are paid out into a single rewards account associated with the reward address of the pool. If a stake pool has multiple owners, it is up to the owner of the rewards account to distribute rewards to the operator and other owners.

An agreement is likely needed to define when and how the accumulated rewards in a shared account should be split. For example, they can agree to have the operator control the shared account, or they can choose to use a multisig account.

To run a pool effectively, a bi-directional relationship and trust are crucial. If this trust is broken, other parties can lose in regards to accumulated or potential rewards, or reputation for the operator.