Small pools are dying...what do you think?

At the moment this Is not decentralization…

D=0,76

K=150 i think this Is the biggest error…moreover no news about this parameter and a lot of pools are worried…

More than 650 pools with 0 block…

What do you think?

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How many pools should we have? Can we have too many pools?

I believe they are decentralizing gradually with k proximal goal of 1,000 pools, so a bit early to hit the panic button perhaps, though I’d like to hear what others think.

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I think the rationale is that k needs to be balanced with coin $ value and SPO fees so that it is sustainable and realistic to have k SPOs. As market cap and adoption grow, so should k.

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I think that we should be patient and give it some time before drawing any conclusion. My stake pool is also very small, but it manages to produce a block in the previous epoch.

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Dear community,

first of all it’s great to be a part of all this here! Like many others, I followed the epoch transition live when d changed from 1 to 0.9 and the community pools were allowed to produce the first blocks. What a great moment!

BTT:
It’s true, small pools are in a somewhat difficult situation right now. I would like to highlight a different but related aspect here. Every delegate nowadays receives rewards for his/her “work” to delegate his stake to a pool - rewards of approx 0.07 % of his stake per epoch. The operator of a small pool has done a lot of more work and pledged possibly thousands of ADA. He receives nothing as long as the pool doesn’t mint a single block. At the same time, the pool cannot prove that its fit for the task - hardware and software setup correctly and so on. And it order to attract new delegates a pool should have made at least 1 block.

Today, I had one thought / idea that could mitigate the situation. If the protocol would allow that every registered and properly pledged pool is scheduled for at least 1 block per epoch - independent of its active stake - we could improve the situation for small / new pools quite a bit. If the small pools catches the chance to make the block, rewards are distributed, if not, no rewards of course. I know that this is nothing that makes sense to apply when d is still very high like now. But maybe when d is 0.5 and in total 10.800 blocks per epoch could minted by community pools.

Take care
Tom

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New pools start with an initial performance factor that is the median of the top k pools. From there on the performance will be measured as some kind of moving average. As long as you produce all blocks you’re supposed to, performance should stay high. Of course you could have bad luck in the first few epochs, but it should even out pretty quickly.

Also with the current amount of active stake it only takes around 650 000 ADA to be expected to win one slot. If all ADA was staked it would be roughly 1.5 mADA. These are amounts I would expect my pool operator to have pledged anyways and the top saturated pools will surely converge into that direction, as this is how it’s intended by design.

The idea is to first rank all pools by “desirability”, to then assume that the k most desirable pools will eventually be saturated, whereas all other pools will lose all their members […].
Source: https://hydra.iohk.io/build/3744897/download/1/delegation_design_spec.pdf, chapter 5.6

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I think they are talking about small pools being able to form “coalitions” in the future which will allow even tiny pools to pool together :slight_smile: and generate blocks.

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At the end of the day it’s a lottery and the more tickets you have the better chance of you producing blocks.

With the above said, a collaboration between small and tiny pools would be advantageous although this would need to have a set predetermined set of rules i which that it would be fair to all parties, a smart contract of sorts

Its definitely no small feat.

So I can make as many pools as I want and they’ll each get a block every epoch? Sign me up.

This would be abused and ruin the system. Stake wouldn’t matter anymore.

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Of course the idea needs further elaboration. For example, the rewards such a new pool receives for the block should be proportional to the active stake. Little active stake (e.g. 10 ADA), tiny rewards. In addition only a low percentage (5%) of all slots could be reserved for this kind of lottery that is not dependent on active stake.

Yeah, but do not forget that small pools suffer very hard from d as it means how many % of the 21600 blocks should be created by PBFT pools?

As an example if d=0 a small pool /w a sigma=1/21600 (~500K stake at least) would be able to forge a block but currently when d=0.78 pools /w less than 1/4752 (~2.5m stake) are ruled out. Of course Fortune can give us some surprises anyway.

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I meant, what is a small pool? In ETH2.0 they would only need 32ETH which is roughly ~13K USD, while here if you do not have ~200KUSD pledged you hardly has any chance for surviving long term /w the current settings.
Though, I expected nOpt initially between 250-350. Yeah, but the line must be drawn somewhere and who that are above that mark will be happy, the others (the majority) probably would screaming that the system is unfair.

We have more than 1k pools when ranking will consider only the first 150 ones, so the others would suffer, but keep in mind we want equlibirium of the nOpt number of pools, so that’s how it works and we need to accept that.

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I agree with you. The mainnet is still young and much more data and experience is needed before drawing any conclusion. Anyhow, my main intention was to present an idea that could become useful at a later point in time.

True. For now small pools can only make sure their operations are working flawlessly and hang in there. Like with any business there’s a certain risk involved.

K and a0 work hand in hand. K with no significance to pledge doesn’t help curb the “1pct” pool phenomenon and will continue to kill small pool ops (no disrespect there, just stating a factual example).

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that’s great that you got a block, but still the majority of pools have not produced a block. it’s something like 60% of pools are still “blockless.” For example, by luck of the draw my pool has not produced a block. I had 21 delegators at my peak and i’m currently down to 6 delegators and about 30% of my original pool size. When i finally do produce a block I seriously doubt any of those delegators will return to my pool. The problem partly is that delegators, and some pool operators for that matter, don’t understand that this system was designed to be “pool agnositc.” doesn’t matter what pool you stake to, your rewards should be basically the same given that the performance of the pool is good. dropping blocks or pools going offline are other issues. still, Cardano Foundation (IOHK) advertised this as a “white-paper” derived, game theory planned nash equilibrium setup and anyone can stake anywhere for roughly the same profit. but that’s not what’s happening. The idea of giving the “little guy” a shot at doing this has all but vanished as stakers take their ADA and move to bigger pools so they can see their rewards each epoch. i personally plan to stay in the game, but many pools will go away because their hopes are evaporating with their pool stake.

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@Jason_Starlord absolutely (in my opinion :rofl:). This discussion has been going on in a couple of other threads, all focusing on slightly different parts of the ecosystem:

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Hi Jason.

I couldn’t agree more with what you are writing here.

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Not the most important issue here, but CF and IOHK are entirely different organisations.

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