Cardano Foundation Updates Delegation Strategy

[GrahamsNumberPlus1]

Over the past two years, Cardano’s delegation strategy has seen substantial growth and engagement. However, the recent announcement of changes to the delegation strategy has left some in the Cardano community, including myself, with a sense of disappointment and concern. Here are my key points that have raised eyebrows and ignited discussion.

Small Stakepools:

Small stakepools have been the backbone of Cardano, contributing tirelessly to the network’s stability at a personal cost, often without any income in recent times. These pools exemplify dedication and support for Cardano’s principles of decentralization. Unfortunately, the updated delegation strategy doesn’t seem to recognize their immense value.

Centralization Concerns

The decision to reduce the number of pools that receive support while extending the delegation duration and package size appears to concentrate support around a select few. The aim to improve quality inadvertently risks hindering the smaller pools’ growth, which seems contrary to the spirit of decentralization and inclusivity that Cardano stands for.

The Removal of the Single Pool Requirement

Cardano has always been seen as a blockchain platform that discourages centralization. Thus, the removal of the single pool requirement is surprising. While it may aim to create more inclusivity, it has sparked concerns about the potential for centralization, which is a move away from Cardano’s foundational values.

Lack of Transparency and Community Involvement

The recent shift where the Cardano Foundation appears to be handpicking pools for delegation without any clear parameters raises questions about the transparency of the process and does not appear to care about community involvement in the selection process. The community has been an essential part of Cardano’s journey, and we hope that spirit continues to thrive.

As a passionate member of the Cardano community, I’m hopeful that these concerns will be taken into consideration, and that the Cardano Foundation will engage with its community to reevaluate and refine these changes. The success of Cardano is a collective effort, and it’s essential that we continue to uphold the values that make Cardano unique.

[aaron_resnikoff]

Honestly it seems that Cardano core dev teams have finally realized that the approach of making it really easy to stand up a pool wasn’t the right move. They see 3k pools and k at 500 or 1000 and say, hmm we have to many pools. Yet even in “winter” they don’t go down much.
So instead of trying to help a pool just because they are running a pool. They will only help already established multi pool operators. For 12 months with more Ada. More then 15m ?!? That was already bonkers.
I think the hope is that 3/4 of the operators finally get the message.
Which is.
Running a pool, just running a pool, isn’t good enough to garnish any respect or appreciation for supporting the ecosystem. Unless of course your a pool that has been around since Testnet.
And you’ve got like 6 full pools already.
Sure they love you guys. For just running “pools.”
The new criteria will just be a few dudes “hand picking” friends or teams that are already established.
Why even take a form? You likely know who you’ll pick without the entrees.
Just drop the façade already. Just do want you want, but don’t pretend you’re making it “more fair”
Don’t ask the community to summit. Just pick who you want and be honest about why.

[adatainment]

ChatGPT? What was the query?

[aaron_resnikoff]

Seriously. What an ass clown.

[aaron_resnikoff]

Wow. This is not a great reply to legitimate concerns

[GrahamsNumberPlus1]

Dissapointed that you as a representative of the Cardano Foundation don’t appear to be taking this seriously

[GrahamsNumberPlus1]

I will be contacting the Cardano Foundation to make sure they are aware of your attitude to someone who is genuinly trying to help

[Fell-x27]

[Greggybone]

This is the worst thing I think they have written.
MPO’s … why say support the edges?

[Greggybone]

That’s what I saw

[Adrem]

Fix this please

[GrahamsNumberPlus1]

I think the CF have really made a blunder this time and have misread the community - I really hope their is some backlash with this

[Greggybone]

But can’t find 90 pools that contribute?
And it’s only tools hey?
Marketing to broader communities isn’t warranted?
The MPO thing hurts… you need to pull that back

[HeptaSean]

@adatainment

A number of our existing wallets will now contribute to funding the CAG stake pool. […] We continue to work with pool.pm to showcase our wallets and current delegation packages.

I can’t see the delegation to CAG on pool.pm?

[Edickson]

I will simply say that these changes will not take us in the right direction, I feel so sad about that.

[santonode]

Hey This typeform is now closed

[earncoinpool]

@adatainment

ChatGPT? What was the query?

Why do we talk this way to community members? There is a trend developing of this tone being taken with community members by the Cardano Foundation over the last several months by several CF members. I find it inappropriate and disturbing.

[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.

[HamsterStakePool]

Can you be a little more specific about point 4 (Selection Process). What do I have to do as a pool operator to be selected?

In the last round I was accepted as a candidate, but I didn’t make it into the selection.

According to the new criteria, I see even lower chances of getting into a delegation round. On the one hand, because the delegation time has been quadrupled and, on the other hand, the number of pools supported is smaller.

Above you wrote that the foundation does not want to support pools that would survive without delegation. I understand that. But the question for me is what is a healthy number of pools?

Either way. I have been operating my pool since February 2021 and will continue to do so. Simply because I enjoy it

[dconecrypto]

We are a technical-focused group that recently started operating [DCONE] pool, precisely launching on August 1, 2023.

Our perspective is that trying to gain delegators is quite challenging at this time. We acknowledge that our number of delegators is not high, only around 300k-500k ADA, and we are very eager to mint our first block during pool operation and contribute to the Cardano ecosystem.

However, when we read that the delegation time for a pool has been extended to 12 months, which used to be 3 months, it’s no longer the same. So if we can’t be on your list or any other pool operators with very few delegators can’t make it to the list, I can assure you they will feel very disappointed.

The above is the viewpoint of someone new to pool operation, and I believe that everyone is thinking similarly at this time.