Hackernoon article on Shelley release :)

Hi guys, here’s an article I authored for the upcoming Shelley release. Let me know what you think and if you like it, give it a share :slight_smile:

Happy to take technical feedback if I’ve missed anything and edit accordingly, please let me know!

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Nice, but I noticed a factual error. It says in the article that pool operators might deviate from the intended behavior by not distributing the rewards as planned. This is wrong since pool operators have no power over rewards distribution. Once everyone agreed on margin% and fees, the rewards are automatically distributed. No pool op decision here.

Otherwise nicely written :slight_smile:

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Thanks! I’ll change that now :slight_smile:

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Very nice article, my comments on a few details:

“Pools who (…) fail to pay incentives fairly(…)” - not possible, payouts are done by the protocol not by the pool.

“(…), or charge disproportionate fees will be penalised.” - only people who are delegating the stake will penalised high fees by not staking with this pool, but basically you can have a pool with a margin of 100%.

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:ok_hand: Thanks for the follow up !

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Got ya ADATNMT ! Ahah

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Thanks guys! So, am I right in saying that some pools will charge higher fees than others though?

Yes. This will be a free market regarding these other aspects. Profit margin mostly if I got it right

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I think this is more accurate then:

"As you might imagine then, becoming a stake pool operator carries some weight of responsibility, not least of all to the protocol, but to the individual participants who choose to delegate their stake to a pool. Pools who frequently disconnect from the network would be subject to penalties.

For example, once the rewards from validating a block are distributed amongst all pools which contributed to its validation, the pool operators are then required to distribute the rewards amongst those who have delegated stake to their pool, after they have covered their own reasonable costs. If a pool frequently disconnects from the blockchain, they are less likely to be chosen as a slot leader, receive less rewards, and therefore do those delegating to their pool a disservice."

Also, as an aside, did the community led initiative to formalise staking best practices ever gain traction?

:ok_hand: There is one or more telegram channels for pool operators, as well as an under construction FAQ GoogleDoc. May be @adatainment has some more info there, since he is a pool op in the making :slight_smile:

The best practise workgroup is: https://t.me/CardanoStakePoolWorkgroup
There is also a link to the doc (mostly collected questions, but also some answers)

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I’m sorry this is still not accurate:

The pool owners are not required to distribute rewards. They simply can’t because they don’t get the rewards. (only for their own stake) This is done (automatically) by the protocol.

“Disconnecting frequently” does not affect the chance to be a slot leader. (at least not directly)

It works like this: it will decrease the reliability of the pool, which will lead into a lower ranking for the pool and less rewards for everyone who delegates to this pool, then people will likely remove their stake. When people are removing their stake, this will of course affect the chance to be a slot leader.

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Thanks so much, really appreciate your feedback -

" As you might imagine then, becoming a stake pool operator carries some weight of responsibility, not least of all to the protocol, but to the individual participants who choose to delegate their stake to a pool, to maintain the pools reputation. Those pools who frequently disconnect from the network or are otherwise unreliable operators would face several challenges.

For example, rewards from validating a block are distributed by the protocol among the slot leader and the pool participants. If a pool frequently disconnects from the blockchain, their ranking is affected, and subsequently rewards are lower. Those delegating their stake to that pool are then more likely to leave and find a more reputable pool, and therefore, the less reliable pool will have lower stake, and a lower probability of being chosen as a slot leader. Therefore, it’s within pool leaders best interests to maintain a reliable pool."

I think, that’s way better. The ranking is not only about reliability, it will very likely a new metric called “desirability” that is composed by different properties. I tried to explain this on https://www.adatainment.com/index.php?page=articles_staking&lang=en#card2 if you want to have a look.

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Thanks for all the help both, linked your site at the bottom of my article @adatainment! Bookmarked you :slight_smile:

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Very kind of you, thanks.

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Thanks for sharing, :wink:

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Good Morning!

a nice article. But I have a question about it,
you write that “…The Cardano developers have achieved this through allocating multiple addresses associated with different cryptographic key pairs, including one to delegate stake, and another to spend ADA as a functional unit of currency…”
Please tell me where the information came from. Where can I read that, or can you tell me more about how these two address types differ?
Thanks a lot.
Regards
Hans, Germany

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Nice article, it’s pulling upcoming developments together and in typical Cardano fashion, it’s being peer reviewed for accuracy :+1:

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Thanks! Sure, it’s detailed on the “Incentives and Staking in Cardano” page - https://staking.cardano.org/

:slight_smile: