Running multiple pools is more profitable than just a single one -> this does not lead to true decentralization!

True, if everything you are doing is cloud based it scales very cost efficient.

I remember Charles saying in one of his videos that it’s a good thing that we see IOHK staking their ADA - that it means they continue to hold them instead of dumping them into the community. And I agree that it is good to see them continue to hodl.

I also see the significant need to have reliable pool operators to keep the network up and running and prevent any noticeable downtime.

But when we have passed the 150 pools count, and with d=0.9 at the start (meaning IOG still operates most of the block-producing nodes), I think IOG is already contradicting themselves when they also operate 20 stake pools.

This is preaching the gospel of decentralization while actually acting in favor of centralization.

I think it would have been better if they just anonymously distributed their delegated stake to a bunch of small pools. This would be practicing what they preach.

I also understand their concern against favoring any particular SPO or group of SPOs. But delegating only, without openly talking about the specific pools they’ve delegated to, shouldn’t be a problem for that concern.


I believe IOHK is running 20 pools with different properties to collect data themselves and not for profit only. So, if k “dramatically” goes up like CH mentioned in his video, and IOHK still only operate 20 pools - everything is good I would say.

Charles has already said multiple times they will do this. But deciding who to delegate to and handling that much Ada securely takes time. Meanwhile they need to use that Ada to make money just like the rest of us.

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Don’t remember the details, hopefully someone who does will drop in, but I don’t believe they’re keeping the rewards.

It might be too late to rewind the damage. For starters, smaller pool might not survive a year. The number of pools will shrink. The highest rewards from monetary expansion are paid out earlier in the system (now), which means these pool farms will acquire even bigger stakes now. In addition ADA price is lower without smart contract, which means a single entity can accumulate a lot now than in a year. I say fix it ASAP. I complained about this problem back in the ITN days, and as early as last month

Thanks to @Tom_ADADE for highlighting the issue.


On ITN, IOHK did support pools but why would they do it in the mainnet as it is an operational overhead for them?.

I think Cardano Foundation already distributed their ADA to some guys based on their contribution. You will see a pattern of bigger delegation to some people here if you analyze it. All got same amount on the same day…find it out :grinning:

I am thinking that IOHK will opt for Coinbase custody service?.

Funny: Yesterday i realized, that someone tries to register 1-percent pools using letters instead of numbers for “numbering”. Until now they have 16 pools running, 1 kADA pledge, 0% margin.

First of all: nice analysis :+1:t2:

I understand your proposal, but I doubt whether it is possible to prevent someone (or an entity) to create multiple pools. Now it is fairly easy to recognise by the ticker/pool name, but they can use different name for their pools.

Question is: why the delegators decide to stake at these * 1PCT (or whatever) pools? Do our delegators care at all about decentralization? It doesn’t look promising based on your analysis… :thinking:

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Hello everybody :smiley:
This does not seem fair to me indeed. I delegate my ADAs, so I understand that me and all those who delegate rush on Emurg* replacing ADAFR for me, the next epoch and the next? :roll_eyes:
6 months is too long to change this
See u my friends.
Thanks Tom_ADADE

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Tom you’ve got me checking this more than i really wanted to !

So today checked the ADApools again and found that there are now almost 250 pools giving a return of over 5% ROA, which i think for a new blockchain only having been running for less than a month is probably quite good. :smiley:

Then like Tom’s original post, i hope the team review comments here and elsewhere and make the changes to encourage even more decentralisation and more choice (but those choices also need to be made by us delegators to promote that ethos) so when your deciding on your pool take a second or so.

Have Fun

This thread, and the original post, outlines very well the discussion that I’ve also seen going on elsewhere, and the things which I’ve been considering a lot over the past week or so. I wanted to add my perspective from the point of view of someone with a very small pool, CRAB, with only ~ 363 K ADA live stake, which nevertheless was lucky enough to gain 3 blocks in Epoch 213.

Gaining those 3 blocks was very lucky, however running a sustainable stake pool shouldn’t be based on luck. Despite that, I’ve still seen much of the stake migrate away since gaining those blocks—and much of the stake remaining is in fact controlled by me, but not put into pledge. That’s mostly because from what I can see, pledge doesn’t matter, at least practically rather than theoretically. I’ve seen others comment that marketing is basically more important, whereas I came to the system in setting up a stake pool thinking the quality of service and reliability would actually be more important; I thought my extensive work with distributed and high-availability systems would be a great fit for the project, which prompted me to make the investment in time and money.

It appears I was wrong about that, but nevertheless, the fact remains that I wouldn’t trust my delegation to simply the biggest marketer, especially one with no contact channels, or equally in some cases, an operator with seemingly very little experience of mission-critical systems. I think the rewards structure of the system needs to incentivise the types of stake pool operators we want to see operating within the network, and much like the arguments put forward in recent videos regarding treasury systems for ETC, actually reward those who do the work—whether that’s development, hardware utilisation, or the extensive testing already performed by lots of people just to get everything running satisfactorily—in most cases rewarded only very minimally or not at all.

I didn’t expect to make an immediate profit in running a stake pool, but I’m not doing it purely out of love, either; it has to make good business sense, one way or the other. In my opinion, the current state of affairs make very little business sense, and has already caused me to start wondering how long I’ll be able to justify operating a stake pool for—and that’s after just one month! It’s all very well to say the parameters might be tweaked and sorted out in some months’ time, but by then many experienced operators will be long gone, leaving the vast majority of the network controlled by just a few players, at which point it will be even harder to get a viable pool delegated to than it currently is.

I feel in some way that the state of affairs in operating a stake pool from the start of the Shelley era have been missold to me, even if unintentionally; I’m not sure I would have spent the weeks of work researching (including reading all the background and mission of Cardano, running numerous quality-checks in the testnet, etc.) and developing mission-critical services within my infrastructure (including open-sourcing some of that), had I realised how things would be—both with the abysmal predicted ROIs for small pools (basically zero, in many cases), and also how discouraging it would be to operate under such terms. I didn’t even realise that ‘decentralisation’ would mean a large number of IOG pools at launch, which made getting in early even harder, and arguably set a precedent where setting up multiple pools is accepted. However, I don’t blame those who have set up multiple pools; if I were in a situation where CRAB grew that large, I would likely do so myself, in the current climate. As I understood it, one of the strengths of Cardano would be that people could act in their best financial interest, and that would be in alignment with the network’s best interests. Unfortunately, at this moment in time, this does not appear to be the case.


example / # Cardano ADA Staking with Arthur J Goldman Consultants /

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You don’t really have to trust your pool. As soon as the pool ranking works properly in daedalus, a delegator only needs to regularly check if their pool is still in the top k pools. Those top k pools will be the most reliable, with relatively low fees and high pledge.

I’ve said this elsewhere, I don’t think many people will care about who operates the pool, just as they don’t care who is mining their bitcoin. And this is not a negative thing the system is meant to be trust less.

I understand that for the individual behind the pool this situation might be frustrating but from the way the incentive mechanism was designed, it is clear that only pools with high pledge will survive.

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Great information Tom. You’re really on to something here! Keep fighting the good fight!

What do you mean by this? Is there a bug in the pool ranking? Or are you saying the way ranking works is wrong and should be fixed?

I think he meant, it is not fully enabled yet, because if it would, then it would behave very differently, based on the spec.

I keep hearing people say it was enabled after 212. Which is why the pools move less. What part of it isn’t enabled?

I do not want to go into too much details, but it’s wallets dependent feature, meaning might be Daedalus enabled it but have not gathered the required data yet to have an educate level of the averaged apparent performance or any other reasons.

Because, the ledger-specs wallet API is ready for use for some time, but might be Daedalus is not using it for some reasons. Might be it will be enabled on Daedalus Flight first.
Similar applies to the Yoroi.

But, ttl I have no details, but if it would be fully functional on the wallets, the ranking would be very-very different.

It’s not considering the current pool saturation.

5.6.4 describes the non myopic pool member rewards. 4.3 p. 30 describes ranking in daedalus and refers to using formula 3 in 5.6.4.

The specs also state that daedalus uses live data including saturation to rank the pools.

Charles said in his recent video that they are aware of the issue and are going to fix it.