> For the complete documentation index, see [llms.txt](https://logyq-protocol.gitbook.io/whitepaper/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://logyq-protocol.gitbook.io/whitepaper/tokenomics/ispo-rewards/how-ispos-work.md).

# How ISPOs work

### **How an ISPO works**

In order to set up an Initial Stake Pool Offering, the SPO changes the ISPO-designated pools’ variable margin to 99%, which means the SPO gets 99% of the ADA rewards generated in an epoch after the fixed cost is paid to the SPO. With a 99% variable margin, the SPO essentially captures all of the ADA staking rewards.

**In exchange for delegators giving up their staking rewards of around 4% to 5% APY, the delegator will receive the project's native tokens.**