Cardano Foundation Updates Delegation Strategy

[Adrem]

IMO A series of steps in the wrong direction CF!

This whole new “strategy” is diametrically opposite to what the community would have liked to see. This topic has been on the table at the very least since Summit 2022, where I felt it was deliberately ignored:

Announcing the stake pools chosen for October 2022

Congratulations to the selected pools! Many known builders of the ecosystem However I must say it would have been better to support the 58 from the shortlist. I did this small poll (264 votes) on Twitter asking the Cardano community if the Foundation should change the methodology to help more builders with less funds and 85% seems to agree. Maybe CF can run a bigger poll from their twitter account or using the system to vote for the speakers in the Summit? @adatainment

So let’s proceed to analyse these decisions, which are made to sound like they benefit the Community:

@adatainment

• Delegation Duration: Instead of a short delegation period of about three months we will move to an extended period of approximately 12 months. An extended delegation period will benefit operators, allowing them to really focus on their contributions.

Naturally this would also make it a lot less labour intensive to re-delegate, as it only needs to happen once a year instead of every 3 months. Of course, having a large delegation for a long period of time would benefit the recipients, but:

@adatainment

• Delegation Packages: We will reduce the number of pools we delegate to, which will increase the size of the packages. This, combined with extended delegation duration, will help enhance the overall quality of our selections plus allow pools to flourish and establish themselves more effectively.

Increasing the size of the delegation package is completely unnecessary, in fact it should be smaller if anything. Again, this would make administration of the delegation less time consuming. Having 15M ADA delegated is more than enough to attract new organic delegates (if one is able to do so) and provides ample ROA.

@adatainment

• Delegation Criteria: We will remove the single pool requirement which will ensure greater flexibility in our selection process. This new approach aims at greater inclusivity.

Here we go, all in the name of inclusivity: I’m sure those poor MPOs felt so left out. This is simply absurd, so I don’t feel like commenting further.

@adatainment

• Selection Process: Our team will now handpick pools based on the data and insights we’ve gathered. This ensures that our delegation strategy is driven by experience and thorough understanding.

Okay, so even less transparency than before. If anything the process should be completely randomized among the successful applicants. But I digress: if this is actually going to be the process going forward, I expect the community will want to see minutes of the closed door meetings where pools are cherry picked.
In said minutes, at the very least, there should be a clear numbering and naming of attendees, clear presentation of every applicant being considered and clear mind-map of how the successful applicants are selected.

@adatainment

• Expectations: We understand that greater delegation may tempt pools to raise fees, however, we want to clarify that if pools increase costs or raise fees, we may withdraw delegation. Also, we will closely monitor pools and engage with them on a regular basis to understand how they are actively contributing to the ecosystem.

This has always been the case, so no reason to make it sound novel.

@adatainment

• Application Process: As the regular delegation rounds will be replaced with the extended delegation, we will change the application format to a single form. If you are a new pool or undertaking a novel initiative that you believe merits attention, you can use this form to submit your pool for consideration .

The link is broken, or deliberately not working. Either way, it needs fixing.

After having applied (and gotten shortlisted) several times for CF delegation I cannot help but be extremely disappointed by both the content and the form of this decision. It also comes at a particularly bad time, with the prospect of minpoolfee being decreased (sparking a race to the bottom).

In all honesty, the decisions made in the past few months seem to all point in the direction of wanting to weed out small pools. But maybe I am just too disappointed to see things clearly.