Cardano considering staking as a service for exchanges. Any other built-in firewall (excluding pledge amount & Saturation) to prevent large exchanges from gaming the system against smaller stake pools? Exchanges have more resources. This strategy could minimize decentralization. What do you think?
First of all, no keys, no coins.
On the other hand, it depends on whether the exchange will allow users to choose the pools, or whether the choice will be made exclusively by the exchange. In the case that the second option is the one applied, then clearly decentralization as such will be at risk, since the exchange will use the power of delegation of the users to distribute the coins that the users supposedly have in their own stake pools.
In that case, the question will be how to balance the game so that small pools or operators who own a small number of pools can compete against exchanges that will use their users’ coins to empower their (dozens of?) (unregistered?) active pools.
I don’t have (nor know) an answer to that, but IOHK might.