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.