Triweekly parameter committee meeting - 13 Feb, 2025
These are the minutes of the PCs (Parameter Committee) triweekly meeting. The minutes and participants follow Chatham House Rules. This is a manually edited summary based on automatically generated notes.
The purpose of the Parameter Committee is to provide technical advice and recommendations relating to protocol parameters. It discusses all parameters relating to the Cardano protocol including network, technical, economic and governance parameters.
Members:
Chair: Kevin Hammond
Vice-Chairs: Alex Moser, Vijay Bhuvangiri
Advisory Group Network: Neil Davies, Karl Knutson, Marcin Szamotulski
Advisory Group Technical: Markus Gufler, Ruslan Dudin, Michael Peyton Jones, Ashish Prajapati
Advisory Group Economic: Sam Leathers, Sergio Sanchez, Philip Lazos, Gio Gargiulo, Sheng-Nan Li
Advisory Group Governance: Nicolas Cerny, Oscar West, Riley Kilgore, Jonny Kelly, Jenny Brito
Communications: Tommy Kammerer, Matthew Capps
Domain experts: Martin Lang, Andrew Westberg, Nathaniel Acton, Mike Hornan, Adam Rusch
(Permanent) Observers:
Secretary: Matt Davis
Agenda:
- PCP003
- GA treasury tax 20%->10%
- PCP004 - cost model update
- Head of Governance Params Team
- MinPoolCost update
- other
Discussions
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Governance Group Head
Acknowledgement of error and appointment of Nicolas Cerny as Head by the Governance Parameter Group Team. -
Treasury Tax Governance Action:
A group with and around Andrew Westberg posted a Governance Action about decreasing the treasury tax parameter tau from 20% to 10%, aiming to involve the community in setting parameters.
Andrew Westberg presented their proposal to reduce the treasury, emphasizing the principle of “no taxation without representation”. Several members raised concerns about some of the rationale presented, particularly the assumption that a reduction would automatically increase staking participation. Others offered a counterargument, suggesting that the reduced reward rate might still lead to decreased staking despite the adjustment. The discussion highlighted the importance of considering the broader economic impact and long-term sustainability of the system, acknowledging potential risks associated with price volatility. It was suggested to involve economic experts to analyze the impact, and advocating for careful consideration and community engagement before making decisions. It was suggested to create a document for collecting and consolidating opinions to inform a thoughtful response. The group agreed that while the proposal was constitutional, their role was to provide informed analysis rather than make a final decision.
This also raised the question of setting precedents for responding to future governance actions. -
Plutus Memory Unit Limit Increase (PCP003):
The meeting discussed increasing the Plutus memory unit limit, impacting CPU usage. Kevin Hammond proposed a phased approach: a 25% increase initially, followed by a further increase to 50% based on benchmark results. It was suggested to do additional benchmarks to address worst-case scenarios involving script and value transaction mixes, highlighting potential risks to block adoption. They emphasized the need to avoid regression and ensure that the worst-case scenario remains acceptable.The group decided to commission further benchmarks to assess the impact of the proposed memory limit increase, considering worst-case scenarios. They also planned to engage with Dapp developers to gauge the impact on their applications, aiming for quantitative feedback rather than simple yes/no responses. The initial proposed increase of 25% was based on previous year’s benchmarks. The discussion also included strategies for broader community engagement to gather a wider range of opinions. It was suggested to post the proposal on the forum and linking it to Twitter, with support from high-follower accounts. It was offered to disseminate information through the Cardano Cafe and other community hubs. -
Cost Model Update & PCP004: The meeting discussed PCP PCP_costModels_KennethMacKenzie and as previously stated accepted it as PCP004, a technical proposal to align cost models for Plutus versions 2 and 3. The group considered bundling this less-contentious update with other technical upgrades, such as PCP003, and potentially others to streamline the process.
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Possible Tenure of non-contentious param updates:
It was suggested and met with appreciation that a cadence of two to four parameter update Governance Actions per year could be reasonable for non-contentious proposals. These windows could be used by the Parameter Committee to make recommendations, which are proposed by the TSC. It was highlighted that there is great benefit of batching updates for the constitutional committee’s workload. -
minPoolCost Analysis:
A preview of data regarding the minpoolcost changes from 2023 was presented, showcasing the impact on stake pools and active stake. They showed that despite a reduction in total active stake, pools adopting the new minimum cost saw an increase in their active stake. They noted a billion ADA reduction in delegated stake for pools maintaining older costs, but emphasized that this was relative to the total active stake. Some raised concerns about confounding factors, such as newer pools being more active and likely to grow, questioning a direct causal link between cost reduction and increased delegation. However, they also highlighted the lack of significant negative consequences from cost reductions as a potential reason to continue this trend. The importance of a neutral presentation of data before adding personal opinions was stressed, advocating for deeper analysis to understand the size and profitability of pools that adjusted their costs. This would just be a first glimpse into collected data.
They acknowledged the need to assess the risk of unsustainable pool growth if parameters allow for further cost reductions, and stated their intent to further analyze pool earnings and sustainability before returning to the committee with more complete data.