Pool farms - 0 ADA pledge but delegate-rich

A delegate-rich stake pool with 0 ADA pledge is not illegal, inappropriate, or malicious. However, it is shocking to me as a pool operator. Here is why it is shocking to me. In the Cardano ecosystem, a stake pool’s pledge (a stake pool owner’s ADA in the game) is crucial. The pledge perimeter is pivotal in instrumenting security and trust in the Cardano stake pool ecosystem. Pledge is a reward perimeter use to protect the Cardano network against Sybil Attack. The pledge factor is used to determine rewards. The pledge factor is used to build trustworthiness to attract stake delegates. IOHK and Cardano Foundation advocates that a stake pool with more ADA pledge is more reliable and trustworthy in the decentralization of the Cardano blockchain. Vice versa, a stake pool with 0 ADA pledge is untrustworthy in protecting the network. This concept of ownership stake is a fundamental tenant in a Proof Of Stake system like ours. Only individuals/entities with ownership stake get to decide who decentralizes the network. This pledge recommendation prevented me from using my stake pool’s large ADA pledge to create a stake pool farm (several stake pools belonging to a single owner). Imagine what I felt when I saw several stake pool farms with 0 ADA pledge controlling over 936 million delegated stake. See the example images below.

If you consider pools with pledge between 0 Ada and 10 ADA, the controlled delegated stake is well over a billion ADA. Meanwhile, trustworthy stake pools with over 100K ADA pledge cannot attract enough delegated stake to sustain their operation.

0 ADA pledge and delegates-rich pools are clear signs that the A0 factor needs to play a significantly more critical role ASAP. If A0 variable is not increased ASAP, some of these abnormal stake pools will entrench their abnormality to the degree that it would be an irreversible problem to correct. This opinion is my humble observation of how mathematical game theory is no match for human ingenuity to game the system. Hence, the need for Voltaire governance. Until then, the Cardano Foundation and IOHK need to remedy this situation ASAP.

1 Like

Hopefully this post creates a good debate, my personal view, i want to know someone has some skin in the game, i’ve tried to come up with a figure (although this is subjective as i don’t run a pool and don’t know the circumstances of each pool operator and their ability to fund a ‘reasonable’ pledge)

The minimum pledge number i’m at at the moment is 50K, i will probably review this figure as we move forward.

Interested to know others opinions :+1:

You are an educated delegate. Kudos to you!! :clap: :clap: :clap:

You are right considering being a trustworthy pool with a 0 pledge.
However your specific examples tell me that, considering the high variabele fee (20%) , the delegators know the pool owner.
The etoro Pools are E-toro exchange’s Pools (100% fee)Not very iterested in your delegation.

1 Like

I tend to agree because it looks like high pledge pools don’t seem to have a lot higher RoS than zero ADA pledge pools. Maybe there is a small difference but currently there is a lot of noise in the data so it’s hard to tell.

However, there are two conflicting goals at play here. One is the importance to incentivize having skin in the game. The other is the goal to have a diverse community of pool operators in order to counteract concentration. In other words if a high pledge provides an advantage, smaller pools would not stand a chance to grow because stake would tend to clump around high pledge pools.

I would assign a high importance to the diversity goal now that we at an early stage and I consider it an achievement to have so many small pools around after such a short time. However, I also agree with you that this situation is not maintainable forever. My expectation is that some small pools will differentiate themselves from the crowd, attract large numbers of delegates and offer them to convert a part of their delegation to a share of the pledge. For this to be economically feasible, the importance of pledge on the RoS must increase over time.

If that works out, the result is a large number of ADA delegators who are also stake pool shareholders, so we would have both diversity and skin in the game.

We form a small Grouponv of Dutch enthousiaste. Together we could delegatie about 1.5m ada. Not much but we hope to make a small difference for small pools to start maling blocks and attrack otter delegators. Then we switch to another pool. We only select pools with enough pledge or with a mission. Preference is both of them. We started now to delegate to shop stakepool in the hope he can keep working on shopify.


Good to see there are delegator groups like you! Please keep it up! :+1: