In ADA riche get richer?

Hi,
I have a very superficial understanding of the block verification in Cardano.
I’ve read about slot leaders and how the are randomly selected base on stack but I don’t understand how they verify the transactions ?

Also, If one get rewards based on stack, how does the protocol avoid the rich to get richer faster ? Is there a mechanism to level the gain as the stack grows ?

I mean we are limited being, and I recall reading in “Think Fast and Slow” from Daniel Kahneman that there is seem to be an upper limit to the value of money. That is getting a reward of 1000 when you live with 500 is far more valuable than getting the same reward when living with 10000 $. At some point you hardly care about value of money, or it may be pathological to want more, and not so good for the rest of humanity.

So is there something like a decreasing reward. This would avoid one of our modern society major problem wealth concentration, and it working to avoid it should find an echo in a want to be decentralized economy. I hope that this has already been tackled in the protocol and that I just need to catch up.

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Yes. bigger pool dosen’t mean more money. it gets saturated.
(Top ADA owners can stake to serveral pools tho)

Search here on the forum for more info:
https://forum.cardano.org/search?q=saturated

Or look at this topic:

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Yes there are diminishing returns built in for saturated Stake Pools incentivizing decentralization of staking. This is one of not the only Production Market (“Block Producing”) that currently exists in the world that is resistant to pooled capital controlling/manipulating markets ie Monopoly and Oligarchy resistant. Pretty cool stuff: https://youtu.be/X-ziLksiPOE

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Personally I do not think wealth concentration is the issue, that is good or bad for humanity.

However there’s a tapestry that has been woven through the course of time and that single thread that weaves its way through, more than likely has played its role however there are many more threads.

The more distinctions you make in a thing the more complex it becomes

If concentration is not an issue, why supporting a “decentralized” project such as cardano?

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As its not just about fiscal wealth

You do not avoid this problem, and rather count on it in order to make sure that people with most stake will provide most care to the system.

It is hard to design another system, at least one that ascertains a non-chaotic bootstrap period. Eventually, exchanges of ada on markets will redistribute all that, but initial players will substancially gain from it. Again.

I am open to hear about realistic alternatives, but they usually bring their own flaws.

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I understand, and like the way you see the problem. I certainly don’t have a better answer but as always we need to be prepared that people care for the system only because the system benefits them, and they will always try to make it even more, beneficial to them.

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When you select a staking pool it gives you all the information about that pool (size, up-time, saturation etc) to make your decisions. I started out investing on the ITN in the #1 slot pool and it had around 280% saturation and didn’t pay well. I found a Scottish pool and a German pool run by some cool folks I liked that were only at 100k ADA staked and a 10% saturation. They only processed a few blocks that month but the payout was much higher (13%) than the #1 pool with near 300% saturation.

So I was able to diversify with 2 smaller pools and actually get a higher return. I plan on experimenting in the first few months of public staking to find the sweet spot. As someone who has allot of ADA I look at smaller, less saturated pools to stake and I know for a fact many other “whales” feel the same. I care about the pool operator and what their mission is as well. The two people I staked with are students getting MS in computer science and I feel like my investments can help them not only finish college but potentially work full time on their stake pools.

Cardano will bring about a new wave of entrepreneurs and honestly running a stake pool is much easier than buying an ASICS miner and dealing with mining and exchanges. I look forward to working with new groups and helping people achieve their dreams while also cementing my early retirement.

As investors we have the easy part, click a button in Daedalus to stake and we make money. I am really excited to invest in as many pools as I can. The future for a free market in Cardano is the brightest ecosystem I can see in the next decade.

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Exactly, and that is why the entire incentive scheme of Cardano is based on that assumption. It is a bit discouraging to be honest, but it is a common denominator that is very sensible : expect people to follow the path of their self-interest.

Whether it is true or not, or even desirable to design around such an assumption or not is more a philosophical question than a practical one at this point. I perfectly understand why this has been chosen.

I would prefer to count on altruism instead but I fully recognize the weakness of that.

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It makes me think of this debate about competition and cooperation drivers for human evolution. Both are defensible but that’s probably not the place.
Although this is related to what I heard at the summit, about game theory. The question we should ask ourselves is what game do ADA owner want to play?

Thank you.

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