The
pool margin has minimal inpact on the rewards being distributed. Let's take as an example a pool with 10M ADA staked, the rewards are approximately:
- Case A, 0% fee: 7160ADA, 5.22% yearly
- Case B, 2% fee: 7017ADA, 5.12% yearly
- Case C, 4% fee: 6874ADA, 5.02% yearly
In Cardano the block are assigned to the pool randomly with a probability as a function the
pool size. Higher the stake, higher will be the probability to receive blocks to be minted. The probability is engineered so that the rewards are about 5.5% yearly. This mechanism of block assignment makes the rewards somehow oscillating over time. This variation is normal, but is more present on small pools.
The
pool saturation is determined by the parameter k, defined in the blockchain. Currently k=500, that means that pools that have more than 64M ADA staked are oversaturated. When that happens the rewards diminish so that the delegators are more willing to select a new pool with below the saturation limit. Soon k will increase to 1000, meaning that the saturation limit will be lowered to 32M. That's why choosing a smaller pool avoids loosing rewards due to saturation.