In a recent conversation someone asked me how I came up with the initial pledge amount of 125 000 ADA for QFR. My short answer was that I don’t own billions of ADA as I didn’t want him to know how big (or small) my actual bag of ADA is. The longer answer is, obviously, a little bit more complicated.
I still don’t have billions of ADA but the amount pledged ain’t my complete bag. Two reasons why I chose to pledge 125k ADA:
First and foremost, it allows me to take profits & pay for goods / services with ADA without compromising your staking rewards.
If I would pledge all of my ADA and use a part of it to pay off my mortage or buy an Aston Martin DB9 (Lambos are meeh) in the future my actual pledge would drop below the amount what I promised to pledge. As a result QFR would still be able to mint new blocks, however it wouldn’t receive any rewards for this anymore. This automatically means that QFR loses the trust of its delegators as they don’t receive any ADA anymore.
Secondly, as long as the k-value = 150 and a0 = 0.3, there is almost no difference in stake returns between pools having zero pledge and pools having millions of ADA pledged. Hence, people delegating to QFR wouldn’t really benefit from a higher pool pledge (but < 30 million ADA).
A significant increase of pool pledge will be reevaluated if these parameters change.
On a side note, I do want to mention other people have offered to pledge to QFR. As we believe there’s currently no 100% safe, hassle-free way to do this, we’ll only start looking into this offers once Goguen smart contracts are available.