Exchanges & Use Of Enterprise Addresses - Are We Tracking These Or?

Hello Fam,

Quick and dirty question. I’m sorry.

What is being done on the front of enterprise addresses?

To my understanding, we already have about 4(?) exchanges and additional multi farms nested comfortably on the network. Yet, “enterprise addresses” are getting no where near the attention it deserves. The following excerpts are from Design Specification for Delegation and Incentives in Cardano.

Section 3.2, page 8:

Screenshot 2020-11-11 at 11.53.30

Section 3.2.2, page 9:

Screenshot 2020-11-11 at 09.45.12

  • Who or how are we tracking if these are being followed?
  • What remedies (if any) there are for not following these guidelines?

I cordially welcome your insight into this topic - because I am getting all kinds of undesirable scenarios in my head looking at things as they are. Maybe it’s just me - but these entities are on the road to ‘eat’ Cardano network share and hence control.

Your time and effort is appreciated.



The Yoroi Extension will automatically detect if your wallet contains enterprise addresses and show them if it does. We don’t show enterprise addresses to the average user since basically everybody wants to delegate their ADA so displaying them would just be confusing.

Part of the reason enterprise addresses haven’t gotten used is definitely because wallets didn’t expose them to keep things simple for the users (so most users don’t even know they exist). It also doesn’t help that enterprise addresses require extra effort to implement, and so many Cardano wallets actually don’t support them at all.

However, the main reason they haven’t gotten used (in my opinion) is due to a shift in thinking inside the cryptocurrency community. When Proof of Stake was new, many PoW proponents were very critical of the idea that PoS currencies would be partially controlled by exchanges. Since there weren’t any PoS currencies yet and almost everybody was using PoW currencies, it made sense to appeal to this thought process by the inclusion of features like enterprise addresses. As more and more PoS cryptocurrencies were released, people started liking the idea of staking as a service provided by the exchanges. Since there are less PoW people to appease and there is a new group of people asking for staking as a service, it’s much less appealing to advertise features like enterprise addresses to the public.

That being said, most people who would actually want to use enterprise addresses to prove they aren’t staking aren’t regular wallet users – they’re usually companies who are running cardano-wallet (which does support enterprise addresses, but I don’t know how easy they are to use)


I should add to this by saying that personally I think enterprise addresses are under-used and the ecosystem would benefit from pressuring exchanges to use them. There is no financial incentive for using enterprise addresses though, so I doubt any of them will.

If you read older versions of the Shelley spec, you’ll notice there were originally plans for a sort of state rent where creating new UTXO entries would cost ADA and spending UTXO entries would give you a refund where the longer the UTXO entry had to be stored, the less you get refunded. This concept was used for staking keys and pool registrations, but for UTXO entries it was simplified (to cut dev time) to just be the 1 ADA minimum you see today. The idea was that using enterprise addresses would get better refunds as a way to encourage exchanges to use enterprise addresses (since exchanges historically manage a lot of UTXO entries)


Section 3.2.2 writing is a bit contradictory, in my view, as it initially says “exchanges MAY wish to … not exercise stake rights”, establishing that the use of enterprise addresses is voluntary, and then in the second paragraph explains why it is unavoidable to ignore funds in exchanges, assuming they will in fact use enterprise addresses.

Of course if it’s voluntary, exchanges will opt for using regular addresses, and stake the funds to obtain the associated rewards. If, as Sebastien explained, there’s currently no incentive to use enterprise addresses, it’s really surprising they are being used at all.

I have no real issue against exchanges operating a stake pool as long as joining it is initiated by the owner of the coins. Automatic staking and earning a profit on someone else’s money is sneaky, to say the least. It’d be good if we could avoid that.

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