How Does a Pool Operator's Risk Tolerance Affect Their Expected Value Calculation? ▴ Learn

How Does a Pool Operator’s Risk Tolerance Affect Their Expected Value Calculation?

A pool operator with a low risk tolerance will set the PPS payout rate significantly lower than the expected value to build a larger reserve fund and ensure profitability even during prolonged 'bad luck' streaks. A high-risk-tolerance operator may set the rate closer to the expected value, accepting higher variance for a larger potential profit margin.

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