4GOOD

Delegators to 4GOOD have the unique opportunity to contribute to the mission of the pool both passively and actively.

• Passive Participation: Delegators to 4GOOD help the pool increase its ability to mint blocks which in turn increases the amount of funds accrued for charitable giving

• Active Participation: Delegators to 4GOOD are able to participate in determining where the accrued funds for charitable giving are directed

We believe strongly in the mission of the Cardano Foundation and the science that underpins the network engineered by IOHK.  Given the alignment of these shared values, we seek to support their efforts by piloting and utilizing any tools and techniques released by them and the community which will help us to deliver on our mission, particularly in the areas of delegator communication and voting.  Likewise, we will contribute our voice as a feedback loop to them, and the Cardano community at large, to offer ideas and solutions for the betterment of the ecosystem.

There are two mechanisms by which a Cardano stake pool earns rewards each 5-day epoch period for participating in the network, namely a fixed fee and a reward margin fee.  Currently, the fixed fee set forth by the protocol is 340 ADA per epoch.  Likewise, the reward margin fee set forth by 4GOOD is 3% whereby the remaining 97% of the rewards are distributed to delegators pro rata per the staking rules embedded in the protocol.  In order to accrue charitable funds, 4GOOD has also created a donation margin which is defined as a percentage of 4GOOD's reward margin collected each epoch.  The donation margin is set at 10% of the total reward margin fees.  Below is an example to see how the donation margin rewards are calculated.  Note, numbers have been rounded to the nearest whole number for simplicity.

• Total epoch rewards earned:       4,400 ADA
• Fixed fee:                                              340 ADA
• Delegator rewards:                         3,938 ADA    (total rewards - fixed fee) * 97%
• Gross margin rewards:                       122 ADA   (total rewards - fixed fee) * 3%
• Donation margin rewards:                  12 ADA   (gross margin rewards) * 10%

After each epoch, the donation margin rewards are calculated.  At the end of the month, the total monthly donation margin rewards are transferred to the 4GOOD donation wallet address.  While this is a manual process now, the intention is for this to be an automated process through the use of a smart contract in the future.

In order to make a meaningful donation during this initial phase of the program, we will engage with the 4GOOD delegators to direct the funds when the level of accrued charitable funds has reached 1,000 ADA.  Our hope is that by that time there may be some methods offered through the primary Cardano wallets for stake pools to effectively communicate with their delegators.  Following our initial donation, we will discuss with our delegator community to see if market conditions warrant routine donations based on a given period of time (monthly, quarterly, etc.) or based on a new threshold amount of accrued ADA.

Delegators may offer ideas for where charitable funds may be directed at any time by sending an email to info@4goodstakepool.com or using any other communication methods that may exist between stake pool operators and delegators at that time.  Candidate organizations will then be reviewed and qualified for their legitimacy, their alignment to the mission of the pool, and their ability to receive donations in the form of ADA.  At the time voting is necessary to direct a donation, the 4GOOD operators will engage with their delegator community to announce and execute a vote.  While this will be a manual process initially, the intention is for this to ultimately be an automated process conducted on-chain for full transparency.

Charitable organizations will be qualified based on their legitimacy, the alignment to the mission of the pool and their ability to receive donations in the form of ADA.  Receipt in the form of ADA is both important in helping to educate organizations about the Cardano project and to further its reach into underserved regions of the world.  Organizations need to be able to provide verifiable credentials as a registered non-profit and should have a proven track record for fulfilling their mission.

Like the Cardano project itself, we are embarking on a new endeavor with the 4GOOD stake pool and its mission.  At first, much of the mechanics of this will be manual, but over time it is our intention for as much of it as possible to function in an automated way, perhaps even as a DAO at some point.  Until then, we will do our best and we welcome any and all comments, questions and suggestions to make 4GOOD the best it can be.  Please drop us a line at info@4goodstakepool.com or on Twitter @4GOODStakePool.