How are delegates that charge a 10% dynamic fee making a profit?
Someone please feel free to correct my maths on this, but I can't see how bakers / delegates are making money charging 10% dynamic fee (or less in some cases) .
Let's assume the following:
50% of Tezos tokens staking
15,000 TZO Balance available
If we use the calculator on the Tezos Community website and enter 1 roll (10,000 TZO), with 50% of the networking staking we can see that this results in a total reward including block fees (assumed at 10 TZO per block) of 10.6%, let's round this up to 11% reward.
Assuming 50% of the network is staking, the bond is 0.0825 / 0.5 = 0.165
Scenario 1 - Solo Baking:
= 3,350 Remaining
10,000 * 0.11 = 1,100 TZO Profit from our 1 roll
We also have 3,350 remaining which we can delegate to someone else for a fee, let's assume 10%.
3,350 * 0.11 = 365.8 * 0.9 = 331.65
Toal profit = 1,431.65
Scenario 2 - Delegation service 10% dynamic fee:
15,000 / 0.165 = 90,909.1 (enough bonds to bake 9 rolls)
90,909.1 * 0.11 = 10,000 Baking profits
Take our fee out of the baking profits 10,000 *0.1 = 1,000
Total profit = 1,000*
*Plus cost in man hours of doing support, making payments etc.
What am I missing?
EDIT: I didn't take into account that the bond is incorporated into the staking balance. Also the baker gets all of the reward from his portion of this staking balance. So ignore me :)
Also found this worked example from the Bakechain FAQ to be quite helpful: https://medium.com/@bakechain/bakechain-marketplace-faq-cf2a64ee1062