Retiring CPX Stake Pool - Operator since ITN

Staking & Delegation Operate a Stake Pool
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Looking for feedback. Planning to retire CPX - CardanoProxy stake pool - OR convince me otherwise.
It’s been a great run, operating a stake pool since early days of the incentivised testnet. I’ve been running this pool on dedicated hardware and multiple dedicated business internet connections (Fiber with Cable backup). For the most part, delegators consisted of friends of family and/or friends of friends. Without the means or quite frankly interest in advertising the pool on social media and going all out with Youtube and/or twitter, this continues to feel like a lost cause.

I appreciate the idea that small pools bring a sense of decentralization to Cardano however without being able to consistently mint blocks, I’m not only hemorrhaging time and money, but also feel like Cardano, as much as I love my dear Cardano, is really not as decentralized as people might think.

I personally believe the whole pool ticker and identity thing was poorly implemented. I get that users may want to affiliate with specific causes or their favorite crypto youtuber, but imagine a world where you didn’t really have to think about that and the protocol simply allowed you to stake in a round robin fashion perhaps, to an anonymous group of pools supporting whatever issue or issues you cared for. Yes there’s been a lot of discussion about pool groups in the past but this has never come to fruition. As a pool operator, it feels like Cardano is as distributed as the Youtube/Twitter crypto sphere allows it to be. With pool operators running Pool1-Pool20… etc… this is far from decentralized.

From a user’s perspective, it’s also far from intuitive. This needs to be as easy as getting passive interest on a savings account. Essentially, a second nature thing.

I digress, with our inability to mint a block (or a few) consistently on every Epoch, it’s to the point where I cannot in good conscious, and as much as I wanted to keep this alive as a sense of pride in contributing to the system’s success and decentralized nature of the protocol, I cannot in good faith continue to recommend staking with CPX to my friends and family when I know they could be making better returns elsewhere. This is not a lack of effort either. I’ve tried coordinating with other operators, offering rewards, heck even paying for ads… almost everything outside of being an “influencer” which is not my cup of tea. The stake also doesn’t play much of a role either so while I thought I could advertise or bank on the fact we’re staking a large sum of ADA, that hasn’t made much of a difference in returns.

To that end, I plan on retiring the pool unless someone convinces me otherwise. Adding to that, this means I can influence close to 1MM ADA on where to go (delegate to) next. Any takers on either question?

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thanks @Ahmad_Alkilani … I remember your name from the early days when I was setting up our pool. What you’ve said about the YouTube/Twitter crowd really weighed heavily on me during that period, since I knew it was not a sphere in which I would ever be able to compete.

Eventually our pool made up for it with work on Cardano Foundation initiatives like the CIP process and the Developer Portal. But even with the resulting stake we still have the financial goal to assure total reliability with the minimal possible cost & configuration (from 2020-2021 an initial total cost of $2 per day). Back in the early days our stated goal was a stake pool footprint that could be duplicated by poor communities in Africa and Asia: naively not considering the much greater importance of holding onto a massive amount of constantly centralising stake delegation :rofl:

Regardless of your decision I hope you will stay on with the Cardano community and/or its various projects in the larger ecosystem. But I would also bet that there is a way you might keep your pool alive if you switch to a lower budget configuration that is equally reliable: currently our 2 nodes (1 relay, 1 BP) on DigitalOcean cost $192 per month where you could get your first month paid for: https://try.digitalocean.com/freetrialoffer/

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Hey @Ahmad_Alkilani

Thanks alot for your story and its really sad to see that people like you, which were here since the start, wasnt able to build up a delegator base but i totaly feel since we just launched our own pool a few days ago… Its so extremly difficult to attract delegations if you arent an influencer or if you dont have a few millions stake by your own.

I could tell you now that you shouldnt stop and that you can succeed but the truth is, it is extremly difficult without reach…So the only thing i could offer you is, that you can support our pool with your delegations.

Feel free to drop me a DM and im happy to tell you about our vision and my background in the Cardano ecosystem.

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Just honestly tell your friends and family that they could get better returns with another pool, what the difference in returns could be and what the chances are that you in the future could also give better returns. They can then decide for themselves if they really want that slightly extra return or that they want to support you. Think about with minimal total stake you need to keep investing time in your pool and get enough rewards yourself. You’ll see who stays and who leaves and you can make a decision later based on what happens.

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It totally feel what you’re describing. I’m really close to a similar decision. “Lost cause” is the proper term.

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Yeah I get where you are coming from. My position is similar to yours with way less stake being delegated and less effort on my part to increase. I maintain the pool to support the ecosystem now. Appreciate your candor.

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Thanks for the note!
We already run on dedicated hardware so the cost is really in maintaining dedicated business internet connections (I was running a multi-WAN setup, i.e., 2 internet connections for 2 distinct ISPs, both with just as much capacity). I will admit we went overboard with our procurement and we may have been able to just live with 1 and half the resources we have dedicated to this. I also expected smart contracts and Hydra to come online much sooner and require additional resources from Pool operators hence the decision of dedicated hardware. We are still ready for that and have plenty of power to throw at that problem (Hydra) if it comes… but again, getting delegation is a pain as everyone here has expressed already.

I will continue to note that the delegation in Cardano to me is just non-intuitive and doesn’t go the way of the promised decentralized finance. Delegating to pools is still not as intuitive as receiving “interest” on a savings account. Instead of generalizing, here are a few bullet points:

Why I think the current approach to delegation is genius (i.e., a very good thing):

  • Stake pools have an inherent interest in advertising and marketing their pools to survive. This essentially means creating influencer buzz and is basically free muti-faceted marketing for Cardano from members of the community. This is genius in that Cardano in a sense gets its own marketing arm without having to lift a finger/spend funds etc…Treasury can, and should be used for better things as is the case today.
  • Users can, if they chose to, be very selective of who or which cause(s) they support.

That’s unfortunately, to me, where the advantages end. On to why the current model doesn’t work or hasn’t worked upon launch/so far:

  • Presenting this sea of pools to delegate to is really asking a lot of users new to crypto, new to Cardano, or new to anything relatively technical or users that simply don’t care to understand the semantics of how delegation here works. You can’t argue users should get super educated on how it works if your goal is decentralized finance for the masses. You simply failed to provide mass appeal to the average Joe.
  • Again, I continue to compare this to “interest” on a savings account. When you subscribe to something like that, you don’t necessarily care how the underlying assets are being invested or how. In contrast, if you stake to a pool on Cardano and the pool goes bust, there’s nothing inherently built into the protocol that just re-allocates your funds and moves along. Again this goes against the current design in that pools are known entities, companies, or individuals so selection is key and that ultimately presents challenges when thinking about introducing something like automatic re-delegation off of retiring pools for example.
  • I think pool groups or bundles (baskets) of pools in addition to implementing automatic re-routing of funds delegated to retired pools would go a long way but then you, as a user, still need to kind of select which basket of pools to chose from… but at least things get aggregated well enough.
  • This centralization of influencers and multi-pool operators necessarily means centralization of Cardano “operators” with smaller operators like me struggling to reason why we’re doing this in the first place. It’s not about Pool operators not making a killing… more about sustainability with the inherent ebbs and flows of pricing.

These issues were only exacerbated with how various wallets list pools and estimate rewards but that’s a story for another day.

Now, I’m not calling for a socialistic view on how things should operate. I realize this is a capitalistic economy but I do think the protocol design and tooling surrounding it contributes to the problems rather than helps solve for it, both from an operator and user’s standpoint. There should be an “easy button” and then an advanced mode if you so wish to be specific about who you contribute to. The easy button for consumers would be "Hey, do your best effort to stake according to these parameters and then the wallet but preferably protocol (so it’s consistent) just goes and does its thing… distributes your stake to multiple pools according to your preferred criteria (maximize rewards, selective causes etc…) … and also handles re-delegation from retired pools which has been a big issue in the past.

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Delegators are aware already. Most of them are just leaving it up to me really as I know most of them. The rest can obviously see performance metrics and are free to leave/move as it’s an open market and I’ve communicated with those that have registered on the website’s newsletter so it’s no secret.

It’s not merely an issue of where funds go, but also an issue of “is it worth it”. As CPX is still up I’ve obviously delated the decision for a little while longer until I have some cycles to either wind down and re-delegate, or otherwise.

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Thanks for the note! I think you and I have commented on quote a few posts in the past and I always see you name in the comments section. Congrats on the pool and we’ll certainly consider delegating your way if/when the time comes. For completeness and in case anyone reading this in the future wants to consider your pool for delegation, mind sharing your ticker/pool_id here?

Thanks

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The growing amount of ADA delegated to retired pools is indeed a worry, currently we have close to 50M ADA delegated to retired pools, see https://cexplorer.io/retired-delegations

I wonder what percentage of ADA in these wallets is lost forever, e.g. lost keys etc. so they will never move irregardless of what happens.

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That’s right. I honestly can’t fault anything but the protocol for this assuming of course that the ADA delegated is still accessible and not lost as you say.

Having to monitor stake pools for retirement isn’t exactly user friendly. Upon delegation you should have the option to (and this should be the default) auto-migrate-delegation if selected pool retires. Migration again could be based on certain criteria. Lots of small SPOs could benefit from this.

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In any case, I feel like we’re preaching to the choir here. Anyone know if there’s a way to get more traction on some of these ideas?

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From another large pledge pool, I feel your struggle. I’m not making any profit from running my pool right now due to incentivicing some large delegators to stake with OYSTR in an attempt to break free of the 340 minPoolCost rut. I’m hoping that some parameter changes are coming soon that will make pools like ours more attractive to delegators. I’m sticking around though and I’m determined to make it work. If I were you I would at least stick around to see what is the outcome of the upcoming poll this month.

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If your professional energies are committed towards achieving excellence in Cardano, you can follow this thread where there has been some work on proposed alternatives to Cardano’s RSS (Rewards Sharing Scheme[s]), with related channels for governance, SPO decentralisation, CIP formulation and other initiatives: Matrix > Cardano Professional Society > RSSv2

It is still “the choir” but people’s approach here is much more proactive, though morale has been affected by the IOG statement late last year that RSS proposals will not be accepted as part of the CIP process. This has discouraged some and motivated others even more. In any case whatever ideas you have about reform will meet with a cooperative audience there.

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Well, we’ve delayed, contemplated and mulled over this as much as we could but the time has finally come and we are officially retiring CPX starting from epoch 451.

If and when Cardano pivots to a more performance/uptime based anonymous approach that isn’t destined to become a social popularity contest… then we’re definitely back in. In truth, we say this not just as a pool operator but also as a consumer. The barrier to entry for staking is still too high if you have to explain to anyone staking what a Pool Operator even is… why you may want to chose one, etc… I get the social aspect… this should not be the “default” though. The elephant in the room we don’t seem to discuss often enough is all the stake delegated to retired pools. There is an inherent expectation that people would need to actively monitor their stake and the pools they’re delegated to all the while we don’t provide the proper tooling for notification or fast, automatic/automated actions. Yes, people need to be in control of their financial future but most people don’t want this to be a large part of their daily lives.

The silver-lining is that we are likely to have more time to dedicate to more fruitful efforts for the eco-system and community.

[Edit] - Fixed typo

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Sad to hear that you had to retire the pool…

Probably wont be the last.

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Yes, the purpose of the staking mechanism in the protocol design is to provide:

  • Resilience
  • Anti-censorship
  • Basically guaranteed faithful running of the protocol

The liquid staking design allows stake to move freely in order to reduce the power of operators behaving poorly or maliciously, and increase the power of those performing the protocol faithfully. The social layer does provide a mechanism to monitor and communicate the reputation of pool operators in terms of how they run the protocol. But, the reputation should be about faithful running of the protocol not about what the pool operator believes in or what he does as another job.

Whether the stake pool operator believes in climate change, donates to the homeless, delivers podcasts, is a vegetarian, or builds particular blockchain tools, should not be the primary reason for selection. These are all great causes but have nothing to do with faithfully running the Cardano protocol.

By turning the staking mechanism into a popularity contest we are creating ways to game the mechanism, and I would argue that this is actually reducing Cardano’s resilience.

Instead, we would increase our resilience far more by focusing on things like:

  • Where pools are located geographically
  • What government governs their location
  • Whether the compute hardware is under their physical control
  • How they are connected to the internet (What ISPs are they dependent on?)
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I don’t agree that being a vegetarian is a great cause… :stuck_out_tongue_closed_eyes:

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No me neither. Humans developed big brains through eating meat.

Actually the more extreme vegetarian is vegan and you can’t even live on a vegan diet without artificial vitamin B12 supplementation. So, I don’t know how anyone could think that a vegan diet is anywhere close to healthy.

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lol… now, now… calm down, vegetables are good for you :slight_smile: