How to find trustworthy Chia pools and avoid scammers
Last week the Chia project officially released version 1.2.0 of their protocol. This version includes the long-awaited pooling update, enabling small-scale farmers to participate in constant rewards rather than farming all by themselves. With this news came excitement in the Chia community. Unfortunately, many scammers saw a window of opportunity to trick people into signing up to their shady pools. To protect other farmers from falling prey to these scams, we put together this article to help you research pools properly.
Finding a safe, secure, and trustworthy pool is essential. The choice of what pool to join should be carefully researched and not simply based on the profits. Many scammers advertise their pools as low-cost or even zero-fee pools to attract people looking to minimize costs, even if that means joining a scammy pool. Do not get us wrong: Some very legitimate pools welcome the first pool members with a life-long “no-fee policy”, which shows once again that it can be difficult to distinguish between good and bad pools.
From our point of view, the following factors should be considered when deciding on the right Chia pool to join:
- Pool operators experience and reputation
- Community engagement
- Transparency and communication
- Fee payout structure
- Security and reliability
In the following, we will take a closer look at each of these components.
Why do experience, reputation, and community engagement play an important role when choosing Chia pool operators?
Experienced providers already established in providing pool services for other cryptocurrencies (especially proof of space crypto projects) make it a lot easier to gauge their future performance and have a higher probability of running a pool more professionally and securely.
A pooling provider with a good reputation can provide you with transparency and clear communication and will work hard to mitigate and recover from the effects of any unexpected events. These pool providers will also not shy away from answering your questions before you sign up, so sending them an E-Mail is always a good idea. To understand a pool’s reputation, search for it in various online forums and communities. One example for such a community is our Discord server, where people discuss Chia-related topics all the time — so feel free to join!
Up next is community engagement. We define this criterion as the pools ability and willingness to communicate with you, should you run into any problems. Many legitimate pools offer some form of service hotline or at least a support mail address. Finding a pooling provider with an active community, clear support channels, and detailed documentation will likely be preferable over one that lacks any of the mentioned points.
Farming in a pool is not an overcomplicated process, but there are just enough technical hurdles that a bit of support goes a long way, and your pool should offer this kind of support.
What do we mean by “transparency and communication”?
To us, this describes a pool’s openness and clarity when it comes to communicating their payment structure for individual farmers and sharing information about themselves. Answers to the following questions will give you an excellent overview of how transparent and recommendable a pool is:
- How are they going to reward you for your part of the pool?
- Is there a one-time fee or recurring fee structure?
- How high will the fees be?
- Are there any other management fees?
- Who is the team behind the pool?
- Where is the pool based?
Information about the people behind the pool is a crucial point to consider. Suppose you can identify the entity behind the service and know that you are using a service provided by an identifiable company or person. In that case, this will go a long way. In case anything goes wrong, you know who to contact and who might be responsible. Many pooling websites do not communicate who they are, where they are based, and their legal entity. A pool hiding this information may be a scammer, and you should rethink whether you want to join them.
What is the fee payout structure, and why does it matter?
The fee payout structure describes how a pool distributes its earnings.
There are mainly two formats used in crypto pooling:
One being PPLNS (Pay Per Last N Shares). In this reward format, after a set period, any shares contributed to the pool in this period are used to determine each farmer’s payout. How long that period is can vary as it is tied directly to when a pool wins a reward. It would be best to research this fact on the pool’s website or ask them directly via Mail.
PPS (Pay Per Share) is another less common format where there is a predetermined period, and the pool will keep a constant payout based on shares and the total pool performance. PPS aims to eliminate significant payout variance for the farmer, where the pool takes on the risks of any luck, bad or good.
Why are security and reliability so important?
Pools will likely be prime targets for malicious actors, who may steal your rewards if the pool is not adequately secured. A reliable pool checks a few boxes to minimize this risk. The main boxes your pool should tick concern the security and encryption of their website and applications. Again, this information might not be available at first sight, but it is worth going the extra mile. Reach out to the pool and ask them about the security measures they have put in place to protect their farmers.
While there are many more factors one can consider, we believe you will decrease the chances of running into the arms of scammers by gathering all this information before committing to any pool.
If you are looking to join a pool, check out our website to buy Chia plots!
