I would recommend reading the “Reward Sharing Schemes for Stake Pools” paper written by Lars Brunjes, Aggelos Kiayias et. al. again. Here is a link: [1807.11218] Reward Sharing Schemes for Stake Pools
Whilst reading, ask: What is the staking system of Cardano designed to achieve? What is the purpose of asking the holders of Ada to either stake their tokens with a pool, or to run a stake pool themselves?
Here are a few quotes to consider:
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The primary property is decentralisation and fairness, which is captured by the creation of k pools of roughly the same size 1/k. The secondary property we are interested in is Sybil resilience, which is captured by being able to influence the equilibrium configuration so that it takes the parties’ stake into account.
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In particular we want to disincentivize Sybil strategies [14]) that create multiple identities declaring potentially lower costs for each one. We distinguish two types of Sybil behaviors: the first one captures a non-utility maximizer who wants to control 50% of the system. Such level of control enables a party to perform double spending attacks on the blockchain or arbitrarily censor transactions. The second type of Sybil behavior is that of a utility maximizer that creates multiple identities with their corresponding stake-pools sharing the same server back-end and thus also the operational costs. Such a player limits decentralisation by reducing the number of independent server deployments that provide the service. Observe that this also can include coalitions of players that decide to act as one.
Unfortunately the conflation of CFs goals has resulted in an action which will undermine Cardano’s decentralisation. CF needs to separate its objectives:
- If CF wants to incentivise people to develop tools for use on Cardano, then it should set up a fund and pay these people for the work they do. I would be supportive of such an agenda. CF could then use some of it’s staking rewards to pay these chosen developers, whether they run a pool or not.
- If CF wants to stake with community pools instead of running it’s own, then I would suggest that it should select such pools to stake with in-line with the general goals outlined in the research paper linked above. We don’t want CF, which is supposed to represent the voice of the community, and has a massive amount of Ada, acting to undermine the goals of our staking system.