Have your say on the Cardano Foundation’s delegation strategy

Have your say on the Cardano Foundation’s delegation strategy

As we shared on 17 November 2020, the Cardano Foundation’s delegation methodology is evolving and being redefined following the upcoming changes to the k-parameter. This is the first, but not the last, evolution of our delegation methodology in keeping with the changing parameters of the protocol towards a more decentralized ecosystem.

In our last announcement, we informed our community that we had already initiated the first operational changes necessary to modify our delegation preferences. As there have been different conversations about an optimal and fair allocation approach within the community, we would now like to invite you to give us your feedback on two important factors—the appropriate amount of ada and the right epoch interval.

We would also like to emphasize again that the required upcoming changes in our delegation processes as a Foundation are not done with the change of wallet infrastructure—we are accountable not only to the community, but also to supervisory authorities. This requires that we carefully balance our delegation preferences for the benefit of the Cardano ecosystem, while also meeting regulatory, auditing, and accounting requirements at all times. We achieve this through due diligence, intensive behind the scenes operational planning and execution, and also through your valuable input.

We will continue to keep you informed about the status and development of our staking methodology and, in the meanwhile, would like to invite you to participate in this process and provide your feedback on the following topics:

  1. In your opinion, what is the appropriate amount of ada that the Cardano Foundation should delegate to a single stake pool?
  • approx. ₳15 million;
  • approx. ₳20 million;
  • approx. ₳25 million;
  • other; please leave reply beneath

0 voters

  1. In your opinion, what should be the right epoch interval for redelegation? We are particularly interested to hear from stake pool operators.
  • once a month;
  • twice a month;
  • three times a month;
  • other; please leave reply beneath

0 voters

Thank you for providing your feedback. We will assess your responses firstly on Friday, 27 November 2020, for the first adaptation of our delegation approach and use this information to further evolve our delegation methodology for the benefit of the community and the decentralization of the Cardano blockchain going forward.


CF delegation strategy to date has revealed incompetency at the highest levels


Could you guys expand on these part? :
we are accountable not only to the community, but also to supervisory authorities. This requires that we carefully balance our delegation preferences for the benefit of the Cardano ecosystem, while also meeting regulatory, auditing, and accounting requirements at all times. We achieve this through due diligence, intensive behind the scenes operational planning and execution, and also through your valuable input.

How exactly the delegation strategy has anything to do with regulations, real examples would be appreciated.

Thank you

Thank you CF for including the community in this.
It marks a positive change.


Or possibly a lack in understanding how complicated it is. Holding ada for an entity like the CF isn’t the same as an individual. No one person has control over the ada, any decision etc. The CF are monitored extremely closely by the swiss authorities and some may think they have to jump through unreasonable hoops, due to being a crypto entity.

It certainly isn’t as easy as create more wallets, split the ada up and start delegating. Nor is it as easy as the top management saying that’s what they want to do.





I voted for 15m but would like to see even smaller options.
I know not easy to handle at the operational level (HW keys, manual steps, …) but here some thoughts

First, we should understand what these CF delegations should be useful for. The main challenge for small pools is to get out of the “small” area where they can produce some blocks, and reliably at least one block per epoch.

With continuously decreasing d factor this became easier and will continue to allow pools to produce more Shelley blocks for another ~20 epochs (100 days) from time of writing

so let’s look at a current epoch (230) and where the small pools stake threshold for at least one block usually is.

(graph from https://pooltool.io/analysis)

the green line extends the line for pools who produced at least one block.
We see literally all pools with more than 5 million active stake produced a block and so RoS>0

As the Foundation has ~620m to delegate (plus approx another 80m of ITN rewards?) it would help more pools to bootstrap and start collecting delegations if the amount is smaller than 15m

Especially if the period for such delegations should last longer than 2-3 epochs.

My proposal would be 7.5 million for 5-6 epochs
This would support ~80 pools for almost a month.
And yes Sorry! I know, this would mean 80 hardware wallet keys, and manual work once a month.


These are pretty balanced numbers.

Hi, I’ve voted for 15 million ADA for 1 month, but think 10 million ADA is sufficient allowing for a positive impact on 50% more pools :+1:
The reason for choosing 1 month is because it takes 15-20 days for the rewards from the increase in stake to start becoming visible for delegates.
IMO these supportive aids should be provided only to SPOs who operate a single pool as this will allow the ecosystem to become more decentralised.
If an SPO creates a new pool then any supportive aid should be removed from their other pool ASAP.
If an SPO reduces their number of pools to 1 then they should become eligible for the support again IMO.


Setting up a stake pool should be possible for everyone. But one would have to go through some kind of registration procedure to prevent abuse. This is to guarantee decentralization. Larger parties such as exchanges should not gain the upper hand.

Agree any stake that gets most pools making a block. Of course that means relaxing the requirement to have made blocks previously. If pools cant make a block with even 2M stake in 6 epochs they are most likely not working. 2M would get most of the “unblocked” proving they are viable.
After that … once all pools
(snapshot at change in policy date) have blocks go to 20M so pools that made blocks all get a chance to make the 100 or so blocks to get ranked fairly (in non-myopic ranking) Maybe limit these things to pools over some minimum pledge, but not higher than 10k Pledge , this is getting expensive for some

I am aware of all this.

My professional opinion stands, thank you. I would appreciate not attempting to minimize my visibility into the damage CF has done to their own ecosystem.

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First of all, many thanks for raising this up to discussion!

Thresholds proposed look good to me as first approach. I’d like to share my 2c about the “other” option:

  1. What about some aproximation to:


This way amounts to be delegated by CF would be fixed for each pool (easing the task/bureaucracy) and should leave enough room for organical growth in most cases.

It could be the case that the delegation slightly saturates some of the pools that are above the $AVG_CURRENT_STAKE_OF_POTENTIAL_CANDIDATES, but this is a minor problem IMHO.

  1. Pick something static (I’d go for a min of 4 epochs) then iterate and measure how much time takes a benefited pool to get close to $AVG_STAKE_GAINED_BY_POOLS_BENEFITED_BY_PREVIOUS_DELEGATIONS
    Set the avg time as baseline period.

Haha I meant Swiss

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You’re welcome, No worries. Glad it’s your professional opinion :+1:


Just an idea, but I think CF should focus on helping highly pledged (aka skin in the game), well-established (from ITN days) pools get over the block number threshold of (at this moment) ~170 blocks which would give them a fairer Daedalus ranking. Currently pools below ~170 minted blocks have an inaccurate performance estimate which is keeping them out of K. Instead we have a bunch of low pledged low fee pools in there which have to their credit minted enough blocks.


I would like to see voting on the types of pools CF can delegate to. Pools that are good for the ecosystem and show quality stewardship should be prioritized


I’m very appreciative of the Cardano Foundation’s willingness to delegate to community stake pools. I feel the best strategy, once support for delegation to multiple pools is provided in the wallet, would be to delegate 10 to 15 million ADA for 4 epochs and if that delegation is getting good returns for the foundation then it should remain delegated to the pool for an additional 4 epochs, otherwise if the returns are below a certain threshold the delegation should be moved after 4 epochs. Single pool operators providing additional value to the Cardano community should be supported if at all possible, but only if delegation to their pool provides adequate returns for the foundation.

1 Like

Delegate 5m per stake pool. 15m will mean halfway to saturation when K changes again and saturation is at 32m


I think if the Cardano Foundation are going to delegate, it should be every epoch using an automated algorithm, so that every Stake Pool Operator has fair opportunity.

@15 million < or less

On another note, I think the whole delegation staking system should be Randomly Automated. That way every stake holder and operator are on an equal playing field in this ecosystem. Win Win for everyone.