How will you choose the Staking Pool you will stake at? The case for Non-Profit Staking Pools

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I wonder how you will make the decision once Shelly is out where, at which staking pool to stake your ADA?

Will you decide based on the design of the website dedicated to the staking pool? Based on the profile and reputation of the people who are operating it? Or you will take Community feedback and recommendation from Community leaders? Perhaps you will look at some listing and ranking website? Or the Staking Pool will provide it´s “users” any kind of unique experience or content (bathroom webcam to the Kardashians :slight_smile: )?

It´s good and healthy for the Ecosystem to have for-profit staking pools, which deliver superior quality, security and maintenance services and hopefully also have in better cases on-premise operations and not only AWS Cloud one. It´s another topic in case staking pool operators purely look for profit maximalization, how this will impact the non-directly observable or not immediately-effective quality of services they provide on the long term and how to verify and audit these services (such as security).

Along the for-profit staking pools there might be room for non-profit staking pools, ran by registered, legally sound and solid, audited non-profit public sector organizations, who may dedicate the income of the pool to some greater cause, continuously delivering value either within or outside of the Cardano Ecosystem.

For instance, we may have a staking pool, which will commit that all revenue, which remains above its operations overhead will be dedicated to sponsoring street artists to paint the world full of beautiful and creative Cardano related art. Another one may simply commit to spend it´s income on supporting an endangered animal species. Or one which will sponsor Community Meetups with merchandise, catering or other products & services. How about one that will continuously educate the Cardano Community regarding the responsibilities of the sustainability era and operating a delegates campaign platform. The opportunities here are endless … I would personally stake at a non-profit pool dedicated for sponsoring / supporting the world food program.

So, the idea here is that we have certain goals, initiatives and missions which require continuous income (OPEX) to efficiently tackle a problem as they are never really achieved to be considered closed or obsolete (never ending stories) opposite to other projects, which may be delivered with a onetime funding (CAPEX).

It feels like the Treasury approach will fit very well the CAPEX projects, while the staking pools might fit well with the OPEX initiatives. Of course you could have the combination, by first having a CAPEX investment (applying for Treasury support) setting up the capability / value stream and then maintining it with OPEX funds (operating a staking pool or having another revenue stream for your venture).

What do you think about this? Would you consider staking at such non-profit pools would they have their operations fully audited and transparent?

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I dont think any business whatsoever should be run for non-profit - but as long as there are no special treatment or tax exceptions business owners can do what they want. Unfortunately that is not the case, non-profits are subsidized businesses and wreck harvec on the market and filled with high salaries, corruption of contracts and deals being made out to connections of the “non-profit” this is how they funnel money out.

In practice there is no such thing as non-profit.

There is charity, charities (which are not a business), or a business who uses Its profit for charity - non profit businesses cannot exist

Sure you can have a business that is perpetually losing money - but someone has to fund that - and how can you fund that? Only with PROFIT from a other business. We want business who dont make a profit to shut down, because they are squandering resources from other profitable projects. The free market automatically takes care of that.

Monetary Profit is the creation of capital, tangible or not. Monetary loss is the destruction of capital.

Also when you have PUBLIC COMPANIES virtue signalling businesses that donate for charity is also bad for the market and everyone - and it is absolutely AMAZING that this is legal.

Charity should and is best done on a private level.

Back to Cardano, I dont see the point, just redistribute the gains and let people do charity on their own. But sure, if one wants to stake in a charitable stake pool, people will do so that way, it will be created if there is a demand for that and there are probably many options as you mentioned, not just charity but all kinds of other “rewards”

The overall point I just want to make is that while non-profit might sound virtues or good it is profit seeking companies/individuals that increase our collective capital and living standards and provide the capital for charity to even exist in the first place.

Charity are only intermediate solution and perfectly fine, but it should not hold some virtues status over profit seeking businesses - because these are truly the creators of wealth and that you even have something to distribute in the first place. Charity destroys capital, nothing wrong with that, it doesn’t make charity wrong, but it can only be done as long as there is someones capital to be destroyed.

Also just to clarify, you as a individual are a profit seeking business, everything you have that goes above minimum living. You sell your capital producing labor, you have to pay for living, and whatever is left-over is profit (your savings)

You created that out of nothing - it is the surplus and left over of the economic energy you put in (labor), and what you took out (living expenses)

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No fancy websites, no unique experience (probably not possible at all, because I expect the delegation to be a secret choice), not too much reputation:

Daedalus -> sort by lowest fee -> boom

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Daedalus -> sort by lowest fee -> boom

This.

I wonder how many pools we’ll see at the start operating at a loss with 0% fees to attract users.

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And how will that impact the quality of the Cardano infrastructure?

The operators will save money on security and other non-directly / non-immediately observable infrastructure qualities…

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Yeh that will definitely be the case - I am not sure what the cost of operating will be, I assume it will increase with time as the network grows. But yeah the cheaper it is, the more of a scenario this will be as many will just do for the fun/hobby aspect also if cost are low.

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May I add that it would probably not be by lowest fee, it will be highest desirability - which would factor in fee among other important considerations.

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Perhaps most pools that start out with very low cost and margins will have a single server doubling as stake pool node as well as relay node. Also, there won’t be any separation between test, staging, and production servers.

Eventually though all that will reflect on the stability of such pools. Professionally managed pools will stand out.

Having said, I think there will be professionally managed pools with lowest imaginable fees - run by big exchanges and custodian operations.

It will be interesting to see how game theory helps achieve true decentralization.

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Yes, somewhat exaggerated formulated on purpose.

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Empty pools and low fee pools will likely be the choice of the unwashed small balanced masses, but real investors ( i.e. the Japanese ICO buyers) hopefully will be discerning on where the stake.

I would hope given a list of for-profit and nonprofit pools they would willingly and actively choose the projects they think most beneficial to the ecosystem.

With 1000 pools, that list might get rather long to read thru, and the Daedalus teams choice of filters will likely greatly impact discovery.

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Yes I think game theory will be used to ensure high quality pools. Charles already mentioned that there will possibly be an extra multiplier for pools that are run by people who have a good reputations in the community. I can imagine multipliers to incentivise other things as well.

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This will be fun to watch. True atomization of a market. Something the Capital always talks about but somehow never truly manages to achieve.

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