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.