Cardano Foundation to adjust its delegation methodology following changes to the k-parameter

[Cardano-Foundation]

Cardano Foundation to adjust its delegation methodology following changes to the k-parameter

On 5 November 2020, IOHK outlined its plans to change the k-parameter* starting from 6 December 2020 during epoch 234. As part of the continuing mission to fully decentralize the Cardano network the k-parameter will be increased from k=150 to k=500.

In order to keep our delegation methodology transparent, we would like to give you a brief update on our next steps following the planned k-parameter adjustment, and outline the reason for deferring our re-delegation last week. The adapted reward sharing scheme through the new k-parameter will affect both stake pool operators and delegators alike. It will also affect the Cardano Foundation’s staking methodology.

Our delegation methodology is carefully designed to support and involve new individual stake pools, serving decentralization and the interests of the wider community. In order to be able to delegate to a larger number of pools after 6 December 2020, we must adapt our staking approach and make significant changes to our operational infrastructure.

Some of these operational changes were initiated last week to ensure that our operative system will be ready for December. As a result, we did not re-delegate last week as planned, instead postponing our re-delegation to the end of this week. There may be some further changes to our staking methodology until the beginning of a new epoch on 6 December 2020. In every event, we will proactively inform you about interruptions via the appropriate channels.

As soon as the impact of the k-parameter is reflected in the new stake pool landscape, the Cardano Foundation will adapt its delegation methodology and announce the changes in a timely manner.

In the meanwhile, we thank you for your support as we prepare to adapt our methodology. If you have any further questions about the Cardano Foundation’s staking methodology, please let us know below, and we will address your questions directly or include the information in future updates.

If you are a stake pool operator or an ada delegator, you may be required to take some action to ensure that your staking or delegation rewards are maintained. You can find out more in IOHK’s blog on staking parameters and decentralization.

For further information on the overall staking and delegation ecosystem for Cardano, you can also refer to the recent guidance to delegators and stake pools from IOHK’s chief scientist, Prof. Aggelos Kiayias.

The Cardano Foundation team

---

What is the k-parameter? The k-parameter determines the desired number of stake pools, ‘k’, which governs the rewards stake pools receive according to how much stake is delegated to them, and influences the stake pool saturation point. The k-parameter plays an important factor in keeping the Cardano blockchain adequately decentralized and encourages ada holders to delegate to a wider number of pools.*

Useful resources:

1. Cardano Foundation’s delegation methodology;
2. IOHK: Parameters and decentralization: the way ahead;
3. IOHK: The general perspective on staking on Cardano;
4. Staking and delegation on Cardano;
5. Staking and delegating for beginners—A step-by-step guide;
6. A guide to becoming a stake pool operator.

[ADA_Farm]

Thank you for the update, I saw a few people asking on twitter so I thought I’d check here.

although I’m a very small, but very commited pool I still follow the progress in the hopes that I’ll meet the requirements.

#1 task for me is to try and meet the pledge requirements, everything else is met so far

[ArmADApool]

Thanks for the updates.

[dennyb2010]

Thank you very much for updating us.
I’m happy to see that CF is taking this seriously.

Looking forward to the next update

[Homer_J]

Announcement of announcement. Had to re-read twice to make sure I didn’t miss something

[Miner]

I would like to once again thank CF for choosing RADAR as one of the pools to which you have delegated. It came at the perfect time as I was about to throw in the towel. I hope that k=500 and a0 becoming meaningful will keep me in the game.

Gryph

[ElliotHill]

Hi @Miner,

This is encouraging to read and shows the Cardano Foundation’s staking methodology is working exactly as intended Thank you for your commitment to running a stake pool and contributing to Cardano’s decentralization.

[Marin]

Hi everyone,
I am thinking - instead of re-delegating such a large amaount of ADA to relatively small number of pools every few epochs, wouldn’t it be better for all to delegate smaller amaount (2-5M ADA) to a much larger number of pools for longer period? Few million ADA delegated is enough to get blocks every epoch and that might help small pools for longer time, while waiting for full decentralisation.

[adatainment]

Yes, this has often been suggested and of course this is what we would prefer. But please remember that one delegation at the moment means having one separate wallet, with separate seed words to mange and everything else.

If an organisation like the Cardano Foundation wants to go from 10x64M delegation to 100x6.4M delegation that would mean handling 100 seed words in 100 wallets and everything else that belongs to it.

If you want to do this in a way that is secure, comprehensible and where nothing can go wrong then this is not something that one can setup over the weekend with Daedalus and a few sheets of paper.

[rocky]

I think that’s a swell idea! If you have a “playlist” of notable pools, please consider NOW or NOWgrantsARTISTS.com. I’m setting up a charity pool for emerging artists and art organizations that will imbue equity and transparency into its platform. NOW is working to become a long term, philanthropic, decentralized pool & hopefully a model for others to follow. I’m also applying a symbiotic marketing strategy that will assist Cardano with its dissemination to the general public.

Have a great day! Rocky

[cybershaman]

GROW Pool is just grateful these changes are coming, hopeful to be a part of the new strategy, and thankful for all of you!

[Viper_Stake-Pool]

We are very grateful to have been chosen for the CF delegation, but putting 66M in a small pool right before the k change seems it will cause more harm than good. We’ve already lost 25% of our total stake due to delegators leaving for smaller pools - not to mention the delegators we might have attracted during this transition period. We hope CF will consider keeping part of their stake in these last 10 pools for some period of time after the k change to help keep us on our feet.

[Carlos]

Why not 20x32M then? That would be an improvement. At least it will not oversaturate the target pools.

[adatainment]

What about 44x15M? --> https://pool.pm/cf/stake

[rodri]

Thank you for listening to the community and attending to our needs. Is it known how long each delegation will last?

[cybershaman]

Thank you for supporting this community!! It shows me you value the infrastructure we bring you and this project. With 1 to many delegation still a ways away, breaking up over 600M into 44 × 15M stakes is a lot of work! And then also every month moving the stake to other pools.

Have any of the requirements for qualifying for this CF ticket changed since the first rounds with the 64M stakes?

In gratitude, Raymond Mata
SPO Grow Pool

[yosef]

https://adapools.org/delegations

[rocky]

How has your delegation process been going?

As I become more in tune with pool operation, I have learned that a valuable tipping point is right around 1.35 million ADA delegation. At this point pools can consistently earn one or more blocks per epoch. Right now I’m at 1.08 and I am earning one or more blocks per 3 epochs. As my saturation is relatively low, my additional .9 percent fee is only translating to about 6 ADA per minted block. With this it is much more valuable to mint at least one block per epoch to maintain growth and concretize my pool as a valuable component to the Cardano POS platform. Have a great day! Rocky of NOWgrantsARTISTS (NOW).