Contingent Staking - How is this not censorship? How is this not permissioned?

In response to the SEC crackdown on Kraken, Charles introduced the idea of contingent staking.

The idea is that stake pool operators must approve Cardano citizens that wish to stake with their pool.
The mechanism is a multisig transaction which could include a KYC process.

The problem I see is that government could lean on stake pool operators and force them to blacklist accounts for citizens that disagree with politicians or the with the bankers pulling the political strings.

The idea smells like censorship to me and seems like it would make Cardano a centralized and permissioned blockchain.

Of course dissidents could still establish their own stake pools but I can’t think of a good reason for the community to take Cardano in that direction.

Any thoughts on the topic?

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Freedom of association for stake pool operators!

They can have a say in who can stake to their pool (and profit from their efforts).


Charles ‘introduced’ the idea of contingent staking in 2021 as a way SPO’s could prevent an attack where whales oversaturate pools forcing smaller stakers to leave, then the whale leaves, leaving the pool with a much smaller delegation.

I think it’s getting blown out of proportion. I 100% agree that ‘KYC’ can’t be added on L1, but we don’t know what the future holds. So what’s better, to have thought about this idea, have done the preparation work and not need it, or ignore it then realise 5 years down the track it (or something like it) is needed?


Greetings @DVNC_L,
Thanks for the information and your thoughtful response. Yes, protecting stake pool operators from whale attacks is a very good reason for contingent staking. And if it makes our banker overlords less likely to attack the protocol that is a benefit. As long as everybody that wants to stake has access to a stake pool, or in the alternative can start their own, then my concerns about permission and censorship are unfounded.

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Fortunately methods that support centralisation + censorship are all extra work for crypto communities which generally just want to keep as simple as possible the process of making money. I remember when this proposal came out (which I supported just to have the technical concept on record):

… it was considered to be essential because the ISPO movement in Cardano would naturally (!) need to discriminate against residents of certain countries to comply with local “regulations” … which were hypothetical at the time & will likely never exist now that ISPO’s are becoming passé.

After this proposal’s author left Cardano I expected a counterpart at IOG or some well connected SPO or new Cardano token dev to take it over. The fact that this never happened supports the fact that compliance with regulators is generally done grudgingly (thank Goodness).

I don’t think Gensler’s recent “You’re on notice” and “We own you” type of declarations are going to really motivate anyone. I hate to say it but the best things working for permissionless cryptocurrencies at this point are:

  • apathy (of developers): not to want to work very hard to satisfy the unreasonable expectations of regulators
  • ignorance (of regulators): not to understand very well what the developers are creating until long after it’s already permeated markets that they will never be able to fully control.

Thank you @COSDpool for the history and for the reassurance that the incentives in play still support decentralization.

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Thank you @HeptaSean, I can see now, that is a valid concern which is well balanced by the fact that anyone can start their own stake pool. I am starting to wonder now if contingent staking will actually incentivize the creation of more stake pools.

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Charles just made a follow up video which addresses my confusion about contingent staking.
It explains the uses and benefits and also explains how contingent staking permits cooperation with regulators while maintaining autonomy for Cardano citizens.

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Yeah, no thanks! I am not willing to sacrifice the very reasons and principles I got interested in the crypto world just because of SPOs or because Charles wants to wiggle his tail around the regulators. Following the same principles, let’s just ditch crypto alltogether, since it is country-agnostic and well, we cannot have that now, can we. If this CIP passes, we might as well just use CBDCs :slight_smile:

Greetings @Adrian2
Welcome to the community.
I am embarrassed to say, I was thinking the same thing when I started this thread.
Thanks to the other people who posted in this thread I have learned that no principles have been sacrificed. No one can be censored on the Cardano blockchain if contingent staking is implemented. Just read through the thread and see for yourself.

Also, I have learned from the other posts in this thread that contingent staking offers many use cases that have absolutely nothing to do with regulation. So if we get all those benefits listed in the above posts, and no principles have been sacrificed, and we also get peace with the regulators, then maybe that’s ok.

Please read through the posts and then let us know how you feel.
I am very interested in hearing your thoughts on the various postings in this thread.

I completely agree with this idea. Currently, only delegators have the ability to choose their SPOs, but I believe SPOs should also have the option to choose whether or not they want to accept a delegation. However, I am curious to hear other people’s thoughts and opinions on this matter.

Additionally, I find it irritating that the discussion on CS immediately turned towards the extremes of implementing full KYC on L1 or complete cypherpunk fever dreams without any consideration for existing laws and regulations. It’s important to also take into account legacy systems. Yes, also when building a completely new system as we are doing here on Cardano.


I think that weakening the permissionless virtue of cryptos at the protocol level is very dangerous indeed. I see a lot of potential use case, but none that is actually desirable enough. Many may be discriminative and privacy invasive. I just don’t want people to be allowed to staking on the basis of their nationality or genre, or age. Conrad of blade pool suggested for example to be able to refuse a wallet containing porn nfts is your religion says so. Do you see where it takes us ? What if an operator refuses wallets containing Judaism or Muslim nfts. What will we do then ? Sorry but no,

This is not the kind of possibility I want for Cardano.

It’s a shame this discussion is being fragmented with KYC, SEC, Contingent Staking, Twitter Drama and YOU. Spank-fully explained! ;) (currently each with a dozen posts on the same subject)… I’ll post here to keep it together with the other CIP reference above.

The recent appearance of staking regulation in the media & social networking limelight has unearthed another CIP which we thought had gone stale… the author (affiliated with IAMX apparently) is now progressing this proposal and editorially we’ve recognised the value that SPO input will have in its approval, acceptance and implementation:

cc @DennisM @KtorZ

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@COSDpool It is not being fragmented. This thread is about discussing Contingent Staking and KYC.

The other thread is about how current Contingent Staking + KYC discussion is irrelevant, not applicable, underinformed and a mental block which we can deal with in novel ways.

You want to discuss Contingent Staking as per Charles’ video (+KYC Twitter add-on). Then this is the thread.

You want to discuss other solutions to this concerns and approach this problem outside of the box, then visit the other thread. It was specifically made so others that do not want to bang their heads against this Contingent-Staking-KYC-model can have a space.

@johnshearing Thread was here first. I read it and as I was going to respond I realized that what I was about say would derail discussion as OP intended. That’s why the new topic was created.


thanks: that’s exactly the matter I was hoping to clear up & luckily the relevant CIPs (which I’ve been trying to progress based on technical rigour rather than any personal feeling that their implementations belong in our ecosystem) are all referenced in this thread. :innocent: