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

Staking & Delegation Stake Delegation
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  1. I am a normie who liked the Cardano goals and saw an opportunity to make some money. I have delegated a quarter million ada
  2. I have tried to learn a systematic way to select pools by searching the internet but so far I’ve heard little that I understand and much that sounds contradictory to my ear.
  3. If the lion share of investors are like me they are close to pulling out of the project for more understandable approaches to cryptology. In short, is just sounds like an over intellectualized and complicated way of doing something that in principle is simple as.

OK, fire at will.

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42

OK. I just listened to Charles “Rough Days” pressy. Nevermind what I said before. This is important and I’m staying in. Hell, its a good buying opp. I will learn how to pick a pool that is good for me and good for Cardano. We’re in this to win.

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43

I didn’t mean to suggest they’re throwing it away! I have no doubt it will be plowed back, in fact I vaguely recall there was some suggestion as to how, just wish I could remember where I saw this.

44

A0 certainly need to be increased. My pool has more pledge than all 10 the 1% pool combined. Yet, I have one pool. I have one pool because the Cardano reward function and documentation advocates against “Pool Farming”. With my pledged stake, I could have ran 10 pools at 0% and collect just the fixed of 340 ADA per pool. It would be profitable collecting 3400 ADA every 5 days but we opted not to. We believe in playing by the rules that better protect the ecosystem. A0 needs to be raised. Why? I am more trusting of the guy with 1, 2, 3, …10 million pledge not to self destruct the ecosystem. I am less trusting of the guy with controlling stake who has few thousand pledge.

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45

So, where’s the difference? Now the low a0 puts an end to the “small” ones (in terms of stake) not because of a lack of pledge but because of the lack of delegators.

That is something I don’t quite get… I understand decentralization of power as is in ‘one entity has little power to influence the consensus’ because the pools are not organized by a single person/group. It actually does not matter on behalf of whose stake an operator with a lot of pools tries to influence the consesus. It is true, somebody or a smaller coalition of a few people running a lot of pools without stake does not impact the decentralization. But that is actually not the case right now…

Maybe, in the future, cardano’s identity tracking project (forgot the fancy name) could be used as a prerequisite to register and run a pool. This could limit one natural person (in the legal sense) to operate one pool, only. There would have to be some community oversight, anyway.

To me, this all seems to be more of a social problem than a technological one. Social issues have never been solved by technology, but social empowerment an legal oversight. The legal side could be “replaced” with contracts in this case, but “social” not with technology. I would like to be proven wrong on this in cardano’s future :wink:

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46

Yes, that’s why we need to get back to this in 6 or 12 months time, as we’re in the bootstrap.:slight_smile:
Cos, I run some model a couple of times, and I do not why but non-of the results were achieved in 5 epochs. I do not why. :man_shrugging:t2:

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47

I agree with you, that reactive systems with feedback loops need time to settle at a stable operating point. Current parameters were/are a rational attempt to solve the initial value problem. It the system will settle at a stable point.

IMHO: On the other hand, using the current parameters, there’s no sense in waiting 6-12 months to confirm, this operating point will not be, what most people understood, we were aiming at in the first place!

48

To get people to pledge to your stake pool you just need to put yourself out there. Let them know that your set up is good and well maintained plus you are committed to the Cardano community. I am not saying its easy but its possible without much money. If the a0 goes up too significantly the pledges might then go to 10, 20 million or more. Out of reach of reach of small operators. (I am just speculating.)

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49

I agree it wouldn’t have any impact if they could not get people to stake. But with money they can pledge a reasonable amount, make sure the pools are run well on good equipment, advertise extensively through social media. Once they prove themselves with good returns people will start staking to them. Maybe I am wrong and generalising, but I have the feeling that apart from IOG all the stake pool operators are small fry in comparison to an extremely wealthy individual or company. ADA is still small and nobody big is that interested but if this changed would they not just try to buy out 1PCT etc.

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50

I suppose this happens because especially the cardano community likes to talk about the inplemtaion details and science behind it.
No regular Netflix user for example thinks about the algorithms that suggest them new shows or thinks about how to improve them.
The regular Cardano user can just choose a high ranked stake pool in Daedalus and be done with it. Besides checking from time to time if the pool is still ranked high there’s really not much more to it.

51

It could never be that high. With a lower ‘k’ (desired by quite some people) at the same time, pools would only consist of pledge. Such a setup would not be rational at all. To me, it displays the fear from change a little bit.

Personally, I’d not be advocating for gigantic changes once a year, but rather smaller adjustments to parameters on a regular basis. Maybe steps of 10% max. every five epochs or so - as an ongoing, continuous process. Also, limiting the rate of change stabilizes systems, too. Adjustments would be way smaller disturbances to the network at the same time. And less risky - same argumentation as with ‘d’, which seems to be widely accepted. Also, it would be a signal, that so the so called “community” can actually be part of this - way before Voltaire might (!) be functional at some - still speculative - point in time next year.

With the current setup, most operators will never be able to prove, they can offer stable operation and rewards. There’s no inherent incentive to delegate to any pool other than the “big” ones. Which is completely fine, if you think, this is the way forward.

To me, praising “the gods of marketing” is like telling smaller persons in the stadium to stand up to see better. In the end, the root issue will not be solved, it will even become worse: Everybody will be standing to reach the previous steady state again - and all this effort for nothing, people might be pissed if it was not a rock concert situation ;-). Instead, changing the “parameters” would have been advantageous for all viewers in the first place: the person in front could have been more considerate, a different distribution of people would have been possible, one could leave empty spaces for smaller people, etc. This is just an example.

Or transferred to pool operators: Everybody will busy advertising their asses off, redirecting resources away from actual network improvements, pool operations, bug reporting, more hostility instead of helping each other, discussing. They would be busy marketing, spamming ticker symbols everywhere, “we are the greatest”, producing “news” videos (nobody watches anymore, because everybody tells the same anyway) etc.

In terms of variable fees, this race to he bottom has begun. Or actually… it finished already at 0%. And it did change… nothing at all.

The current setup does fail to incentivice anything else than the current distribution of power (=control over delegated stake). We are way into the steady state already.

Leaving for the outside, non imaginary, world - have a nice day :slight_smile:

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52

Here I was referring to someone with a lot of money to invest in this. They could simply stake on their own pool and people would then see the blocks made.

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53

I am not talking of a mass marketing campaign. I think the Cardano community do support each other and will stake with pool operators they believe are putting effort into the community themselves but how do they know you are putting effort in unless you communicate this. Regarding fees etc. some are starting with 0% fees to help persuade people to stake with them. They may change this once they have proved to be reliable. Its early days I hope you stick with it.

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54

You missed the point I wanted to make: There is no reason to set your margin to zero as this will not attract any delegators anyway with the current metrics and ranking in wallets. Concerning this, we are in a steady state already! Either you own >= 3-5 MAda to reliably produce blocks ‘on your own’ and become visible in rankings. Or one might as well stop it all here :wink:

Relying on time to change this on its own, is like burying the head in the sand on this. Or, just accepting it as is.

56

I think we will just have to disagree on this. I am sure there and many stake pool operators, myself include that do not have 3.5 million ADA to stake and yet have managed to get more than this delegated to them. I do agree if you do nothing time alone is not good enough. Surely you would not open a shop and just expect people to start coming in without doing anything yourself to promote it. I also think 0% would make a difference to some but its not a route we are considering.

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The question is if it will stay this way. I wish you the best of luck, but the way the incentive mechanism is designed we will converge towards k pools with high pledge along with good performance and relatively low fees of course.

58

What’s stopping a SPO from riding the notoriety of the 1PC conglomerate? Can’t somebody make a stake pool with ticker 1PC12 (I think there are 11 already)?

With the current a0 being so low (no real pledge needed) a person with about 3 mil ADA can make a stake pool pledging only 10k ADA, then delegate their own 2.99 mil ADA to it. Stake seems more valuable than pledge at the moment - as a SPO.

3 mil ADA seems like a decent enough amount to get a couple blocks in an epoch. Pair that with stolen notoriety and you should be able to attract some delegators.

59

You forgot to stretch one thing: You have to own 3 MAda first :wink:

60

Pledge counts towards the relative stake of a pool. From a block production standpoint it doesn’t matter if the 3 million are staked or pledged.
When (hopefully soon) daedalus pool ranking is updated to work as described in the design specs pledge should play a bigger role, even with the a0 at 0.3

61

Such a lively debate. I love it. There will not be a perfect reward mechanism because people (justified or not) will find a way to game the system. But I hope we (IOHK, CF, & SPOs) can iron out a somewhat more egalitarian solution that doesn’t jeopardize the diversity and decentralization of the Cardano network.

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