Multi Poolers - Big risk

I am very concerned about… Individuals running many pools … please do something…

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Here is another interesting recent video:

I thought the part with Sebastian starting around 37:50 was pretty interesting. Illustrates some of the things we as a community need to come together on. Particularly getting some tooling projects funded in catalyst.

Here is an interesting paper that shows where we are headed with Consensus:

I think at some point we will see something where proof of stake is just one part.

Binance is the worst of the multi-poolers and they only control ~12% of total active stake. It’s an issue to work on, but we’re nowhere near a security threat level. It’s more of a concern for those using Binance Earn rather than being a network-wide problem.

Check out for a list of pools dedicated towards this cause (including mine).

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As long as we let it happen it is an issue and it will only grow.
Cardano can’t stop Binance (and others) from creating pools, but can stop self assignation of resources to those pools. A design change/update is necessary

What resources are you referring to that the network is assigning to them? I do agree that possibly the pledge influence factor could be increased, but Binance earn users are already getting hit by up to a 30% penalty in rewards given that their pools have no pledge. They also get hit with a 6% margin.

On top of this, IOG encourages Single Pool Operation through quarterly 3+ million Cardano delegation to SPOs who exhibit good behavior on chain. What more do you think the network could do?

Here is a breakdown of all pools groups:


The reason Binance controls so much stake is that its trading platform is dominant. So many active traders use Binance and they just leave their crypto on the exchange where Binance can basically earn yield on it.

If we create a decentralised exchange, with a great user experience, and low transaction fees, that is better than Binance, then the problem will cease. Difficult, but possible.

A decentralised exchange does have some advantages especially since on Cardano smart contracts can do staking. For example, a Cardano DEX can implement staking within its smart contracts, allow users to choose their stake pools, and return the rewards to the users. Furthermore, a centralised company like Binance will ultimately need more employees than a decentralised exchange. For example, note how many people work for Sushiswap compared to its trading volume.

We need more competitors and we need to make it easier and cheaper to trade directly using the Cardano infrastructure without having to leave for Binance.

When the Djed stable coin is available it may take a significant chunk away from Binance. Many people trading Ada are just swapping in/out of stable coins to trade the charts. Binance fees are low. The Djed stable coin fees need to be lower.

Then we just need to be able to offer leverage like Binance can to satisfy this need for all the degenerate gamblers. This leverage is coming too. Scary!

Well I know it won’t be popular, but I wonder what makes people believe that letting users choose their stake pool is a good idea ?
The result is that Binance choose for themself (on behalf of their user but without genuinely asking). And that a ton of successful pool are chosen on social media exposure and other sort of fame. It goes without saying that it is absolutely unrelated to a good pool.

A good pool system should be rated on technical facts (I know in this period and age of antivax it’s a tough subjects), and witnessed results. Uptime, availability, geolocation, architecture, etc … . With a clear system so it’s easy for pools to provide what the network needs, and be rewarded by staking. Not the other way around …
Checkout DOT or AVAX, I’m not saying to do the same but it’s quite different and nonetheless successful in that respect.

“Good” is subjective. What is good to you might not be as good to someone else. Also value is subjective so that the value one pool provides may look quite different through different eyes.

The value of a pool can even change over time depending on the circumstances. For example: If I saw that the pool I was staked to was getting too much influence over the network, I would actively move my stake even if the pool had not changed what it was doing.

This is why the protocol allows the holders of Ada to decide where they should stake.

Don’t know. Decentralised exchanges cannot solve the problem of exchanging fiat for coins or tokens. Even if it are stable coins, you still have to have some service that exchanges Dollars or Euros for these stable coins, an exchange that deals with real banks.

I fear that there will always be enough people who leave the purchased coins and tokens at exactly this service, because everything else is too cumbersome … and sometimes risky as we can see very often.

While I agree that these are much more valuable than good social media marketing: Multi-pools could even have an advantage at these metrics. They – especially the ones that are so big that they are a real threat to decentralisation – have enough resources to do very professional pool administration compared to the single pools who need basic bash courses in the forums.

The fiat on-ramps and off-ramps are an issue but these fiat transactions are not the cause of the Ada sitting for prolonged periods on centralised exchanges.

The Ada held by people on exchanges results from:

  1. Ada held waiting to be sold
  2. People viewing exchange custody as more convenient or more trustworthy
  3. Not wanting to pay the transaction fee to transfer off exchange?

As I understand, one of the reasons that IOHK partnered with COTI to issue the Djed stable coin is that COTI has a banking licence. So hopefully it will be possible to on-ramp and off-ramp fiat to Djed stable coin via the COTI platform.

If that is the case, it hopefully will take some business from Binance.

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Well “Good” is not so subjective for the ADA network. At least I hope not ! You have to take the point of view that does matter, the network itself. Is it good for the network ?
I know you can twist that and find an angle where we can argue it is subjective, but you have the idea. What is good for me and you is not fully irrelevant, but nearly. If the network is better, we are better in the end.

You are right saying the value of a pool can change overtime, but I think you are wrong using this as an argument backing ADA holders as main and only stake controllers.
Technical parameters automatically gathered everyday can easily detect a pool change. It can even easily detect a trend and predict a trend too. This would be the base of rating pools, on a daily (even hourly) basis.
This is using the same concept as the crypto is using. We all know you can’t trust people, this is why smart contracts are so much better. You are forced to respect the terms of the contracts once signed. Same goes for stakers and pools, I don’t want the everyday of this in peoples hands. The main decision would be human though, made by educated, Cardano centric people.
Look at where we are now, pools are very chaotic, unfair and inefficient. Not because of technology, but organization. Well I’m not starting again, I’ve said this already :wink:

@HeptaSean You know Multi-Pools could have the upper hands on some metrics, that is right. But that’s for the best of the network so it’s fine. On the other hand, Multipools are multi … and that is not for the best. So perhaps, as mentioned before, a smart way would be to pick few pools from big multipools, this way you have few solid nodes and still promote decentralization.

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I don’t think the current Multi Poolers are that much of a risk for now. At least we know a lot of them. Furthermore, the people staking to them are probably more informed and willing to move their stake than those staked on Binance pools.

I worry more about Binance and other centralised exchanges. I also worry about the power that smart contract staking will enable. I worry that some future defi lending platform might gain out-sized control via smart contract staking enormous amounts of Ada others have deposited as collateral.