Cardano Foundation announces its delegation methodology - CLOSED

I often wonder what folks are actually asking/hoping for. The fundamentals say that the system will converge towards k saturated pools, which is thought to reach a state of equilibrium where no player has an advantage of changing the configuration - k is currently at 500.

Ok, you may think that 500 pools, with all the others eventually loosing all delegators to more profitable pools, is no good and you may want to increase k - lets say to 1.000, 10.000 or even 100.000. What you probably don’t want is hyperinflation, which would kill the project. Lets assume, you therefore would like to have the total reward to remain more or less the same i.e. 15.000.000 / epoch. You would then have to distribute that among the 100.000 (saturated) pools, each of which would receive 150 ADA / epoch. How about all those, who are not lucky enough to be among those “privileged” 100.000? Oh, and lets not forget, there are only 21.600 blocks / epoch - so every (saturated) pool would still get 750 ADA, but only once a month. Is that good use of compute resources?

Optimal decentralization is also not necessarily about an ever increasing number of nodes. There are other important factors to consider too - security and scalability for example.

Delegation grants like this may go here or there for a while and then they go elsewhere. They will likely not change the fundamentals of game theory or what research has shown to be good for most for the longest possible time. These delegations are probably more like a fleeting gift than something one should feel entitled to receive.

It is possible to run a pool totally non-profit and still be very happy about, because it’s the direction of the project what matters most IMHO.

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