I’ve been reading from the following paper: Reward Sharing Schemes for Stake Pools
The idea is that the reward for a stake pool is capped, so that pools don’t have the incentive to grow and control the entire protocol.
I have analyzed some scenarios I came up with, and if I’m not missing something, then the cap scheme is in peril. This is because the same person could run multiple stake pools at maximum uncapped size each.
Here is a Google Docs spreadsheet with the concrete case.
One way to prevent this is to identify the real-world persons running the pools, so that we can find out whether whether they are running multiple pools [Edit as per hayamoto_jr’s answer: or colluding with each other].
This shouldn’t be too hard to do, since the number of pools is targeted to be around
100 1000. However, this needs to be reconciled with the current protocol (i.e. people need to prove stake in order to vote on pool owner’s uniqueness).
Do you think my analysis is correct? Am I missing something?
[Edit: as per canopus’ answer, I was missing the fact that owning a large part of the stake pool makes you inherently interested in the network going well, which is tied to people trusting it. So that makes you want to be a “benevolent” “dictator”. But this doesn’t explain why there is a minimum target for the pool count.]