1 What is a Forging Pool
A forging pool is a hub where multiple users can combine their forging power to increase their chance of forging a block. This is great for small stake owners who normally will only forge blocks and receive frees infrequently. By combining your forging power with others you can increase the probability that the entire pool will forge a block, and so reduce the time to the next payout.
Only forging power is leased to the pool. Users still retain their NXT and can spend it freely; the pool cannot transact any of their users NXT. This gives a much safer way to combine forging power than sending NXT to a pool.
When (if) the hub is successful in generating a block, the pool is obliged to reward users according to the amount of stake contributed. Note that the Nxt network doesn't gaurantee pool payouts will happen, it only provides a means of pooling Nxt together to forge. It's up to individual pools to decide how much of the forging fees earned to pay out, and whether to distribute the payouts proportional to stake contributions, or by some other formula. For small stakeholders, leasing your balance to a proportional-payout pool makes payouts more regular (but does not increase your expected returns).
2 Should I join a forging pool?
As of May 2014, the percentage of active NXT on the network (amount of NXT being forged at any given time) is roughly 30%. This means that until transparent forging is fully implemented, it would be possible to perform a 51% attack by having 150 Million NXT. This is much less than the 500 million otherwise required if all the 1 billion NXT were forging. One of the reasons this amount is low is because the owners of smaller stakes have a low chance of generating a block compared to wealthy accounts (commonly referred as whales). It isn't worthwhile for them to leave their client (and therefore their computer) running 24/7 in order to forge.
This is no longer the case. With the introduction of account leasing you no longer need to leave the client running 24/7, you can lease your forging power to someone willing to, at no cost (other than the transaction fee) to yourself. Even smaller owners can easily contribute to the forging process. More accounts and active NXT forging means a more secure network.
3 What should I know before starting
Is it profitable?
- As of now:
- The maximal leasing period is 32767 blocks, which is roughly little over 30-35 days.
- To lease your forging power, there is a 1 NXT fee.
- Depending on the forging pool, there may be extra fees associated with the withdrawal of your reward.
- To answer this question you have to ask yourself if your forging power is sufficient to cover the costs and still allow you to make a profit.
- Some of the multiple factors that may influence this answer are:
- how much do I contribute to the forging pool? Said differently, what percentage of the reward will I get given my forging power?
- what is the strength of the pool? In other words, can the pool generate a decent amount of blocks?
- what is the average amount of NXT every block contains as fees?
- Keep in mind the fees associated with the transactions are bound to decrease in the future as the value of NXT and the number of transactions at any given time increases. It may not be profitable now but it could in the future.
Are my funds at risk?
- No. With account leasing, the only thing transferred is your forging power. Your funds never leave your account. They can still be used to buy or sell anything you want. Your leased forging power will change accordingly as you spend or increase your funds.
Are the rewards guaranteed?
- No. It is the forging pool's responsibility to distribute the rewards obtained through forging. The trustworthiness of a hub will inevitably be related to their commitment to perform a payout whenever requested.
Can a pool become too big?
- Yes, this is a possibility. The bigger a pool is, higher is their chance to generate a block, therefore non-members may be attracted to join this pool since this is where most of the blocks will go. Until transparent forging is fully implemented, a person with malicious intents may target a huge hub and profit from their forging power to perform a 51% attack (assuming the pool reaches this forging power). There are multiple pools, for the sake of the network (and your investment) use them.
The pool owner went rogue! Abort! Abort!
- Unfortunately, it is not possible to cancel a leasing. Your forging power will automatically return to you when the leasing period expires, not before.
- However, it is possible to reach the same result in a different way: the amount you lease at any given time is the total funds in your possession. If you own 1000 NXT and you lease them, this is the amount you are contributing to the forging pool. If you now transfer those 1000 NXT from your account to another, the lease contract will not be broken but you are effectively contributing 0 NXT to the pool.
4 List of forging pools
You can join any of the following pools:
NOTE: these forging pools may not exist anymore or the information may not be updated. Make sure to verify before leasing!
- NXTCrypto.org forging pool (by forkedchain)
- Forum thread: https://nxtforum.org/general-discussion/nxtcrypto-org-leased-forging-pool-only-fees-are-1nxt-to-withdraw/
- Pool address: 1460178482 (before leasing make sure it is still valid and the correct one)
- Lease fee: 1 NXT
- Payout request: done via Messages arbitrary messages, send a message (the content is not important) to request a payout, 1 NXT.
- Payout transfer: 1 NXT
- Distribution: proportional to the forging power.
- The Charity Hub (by ChuckOne)
- Forum thread: https://nxtforum.org/leasing-pools/the-charity-hub/
- Pool address: NXT-8N9W-TN4F-YA2S-H5B7R (before leasing make sure it is still valid and the correct one)
- Lease fee: 1 NXT
- Payouts are automatically sent to a beneficiary that is changed regularly.
More pools can be found here