Official guide is misleading

[HeptaSean]

@Tom_Stafford

The main sway of this guide is to have stake delegated to people not pools, based on merit. This is a proof of stake network, not proof of merit, not proof of identity, not proof of anything but stake. The network relies on stake. The document should instead guide delegates into behavior that is best for the network, best for them.

Of course, it is proof of stake. The success of a pool depends for the main part on the stake delegated to them. But that does not tell us, how to choose a pool to delegate to.

Cardano was deliberately designed, so that users choose a specific pool by identity. That brings the people into it. That allows to delegate to mission-driven pools, to pools run by people doing great work for the community, to pools based on perks like ISPOs or NFTs, … and it also makes it at least sensible to consider communication channels with the pool operator to get informed of changes, because you actively have to change delegation, e.g., if a pool gets shutdown.

And this does not seem to be against the idea that at least Kiayias of IOHK has about staking:

Stake pool operators may prove to have skin in the game in other ways than pledging stake of course; e.g., they can be very professional and contribute to the community in different ways.

https://iohk.io/en/blog/posts/2020/11/13/the-general-perspective-on-staking-in-cardano/

You don’t have to like this “personalised” form of staking, but it is so deeply built into how staking works, that another PoS chain may be better suited.

@Tom_Stafford

A wise operator and/or somebody with a ton of pledge is doing their pool a favor by being anonymous. The guide’s recommendation here has nothing to do with the pool at all, it is a social preference.

Anonymity is also a social preference. Given that the protocol is built in a way that I can choose, I want to know, where the profits that I help generate with my stake go. But, okay, a guide could/should maybe be neutral with respect to this question.

@Tom_Stafford

The guide literally tells people to avoid certain pools by name, despite these pools having good performance among other favorable traits. Avoiding pools with a 1,2,3, ticker is an incomplete method of avoiding multi pools and leaves the actually threatening sybille attacker alone - the one secretly running a thousand pools.

I tend to agree that multi-pools that are very far from 51% are probably not a threat to the network and something totally different than the exchanges and funds controlling huge percentages and those are still something different than sybil attacks done in secret.

@Tom_Stafford

Back to knowing your operator, it’s super easy and free to create many social account to give the impression of many identities. Pledge costs money.

It’s not soo super easy to really convincingly emulate an active single pool operator across several social media, contributing to the community, … Making pledge more important would restrict pool operation to really wealthy operators. Do we want that?

@Tom_Stafford

While in theory, rewards against a pool are optimal at saturation point

Not a theory…

“In theory” does not mean that it’s just a theory. And the point that close to 100% there is a risk of oversaturation is real.

@Tom_Stafford

you would ideally want to be stake with a pool whose Live Stake is somewhere between 5% to 70% of saturation point

No, ideally you would delegate to 100% or even 90% would be a better suggestion. 5%? come on…

5% is too low. True. With the current parameters, the part of the curve, where it doesn’t make that much of a difference starts at, I’d say, 20%.

@Tom_Stafford

note that at the current protocol parameters, the overall difference for rewards is not hugely affected

This is basically telling people to ignore pledge.

It is somehow true, nevertheless.

There is a proposal that wants to change that and it contains some calculations on the current situation:

CIP - Shelley’s Basho-Voltaire decentralization update

Cardano Community, I’ve begun authoring a CIP: Submitted a pull request for the: Shelley’s Basho Voltaire decentralization update CIP-Liesenfelt-Shelleys_Voltaire_decentralization_update/blob/main/README.md Pull Request cardano-foundation/CIPs/pull/242 Google Docs Draft Link: Shelley’s Basho-Voltaire Decentralization Update [Google Docs] (Anybody can comment!) In short, the network hasn’t decentralized as much as we would like: [k effective per epoch] The current reward formulation has…

Yes, you are right that pledge could make a difference. If there were lots of public pools that were pledged in the range of 50% of saturation, tens of millions of ADA, that I could choose to delegate to. Are there? Haven’t seen them. With the pledges that are usual at the moment, they hardly make a difference.

I am not sure if enforcing pledges in this range really helps decentralisation as you claim it. It would restrict the possibility to run profitable pools to a very small group.