@Lovecoach First of all, thank you soo much for asking us SPOs on a change that will directly effect us. I am the founder of VoltPool, with over 4500 blocks underneath our belt and have been producing blocks since Cardano went live. I have am considered a Single Pool Operator with over 1800 delegates and 14 million ada staked to my pool at this time. Please see my responses to your points below:
Why you prefer this option:
Increasing K to 1000 Increasing the K parameter to 1000 brings several benefits that both I and many stake pool operators (SPOs) appreciate. Primarily, it enhances Cardano’s decentralization by increasing the number of SPOs and their participation. While some people may argue that this change will allow big players to establish more nodes and generate even more profit, addressing that issue should not impede the increase of K to 1000. Instead, the focus should be on promoting decentralization among smaller SPOs and providing them with opportunities to attract delegators and participate more actively.
One challenge in increasing K to 1000 is that smaller delegators would need to redelegate their ADA, which can be cumbersome for those who don’t run a Cardano node 24/7. They would need to update their Daedalus wallet, wait for it to sync, and then redelegate their ADA. There is a risk that many delegators may not complete this process within the given timeframe, leading to over-saturated SPOs experiencing decreased returns, adversely affecting their pool statistics, and reducing their block production.
Keeping MinPoolCost at 340 Ada Maintaining the MinPoolCost at 340 ADA is essential for SPOs to cover their infrastructure expenses. While this topic has sparked considerable debate within the community, reducing the MinPoolCost from 340 to 170 could create several issues. Most notably, SPOs running professional and secure node infrastructure with two relays and a block producer may struggle to cover their costs, especially as operating expenses for cloud infrastructure continue to rise.
Lowering the MinPoolCost may lead to several consequences:
- SPOs might cut costs by reducing the number of relays or even eliminating them, connecting the block producer directly to the Cardano network. This could compromise the overall security and stability of the network.
- A decreased MinPoolCost could raise the entry barrier for hobbyists, centralizing the network around companies and individuals with the financial means to cover monthly cloud infrastructure costs.
SPOs might increase their pool fees above 0% to offset losses, making the overall network more expensive for users.
- Some SPOs could retire their pools, as the average person may not be able to afford the monthly cloud infrastructure costs required to operate a reliable and secure pool.
While increasing K and maintaining the MinPoolCost at 340 ADA may raise costs for the Treasury, reducing it to 170 ADA is not a viable solution. Doing so could result in a less secure network, operated on suboptimal hardware and cloud infrastructure.
Potential impact on your stake pool:
If the MinPoolCost were to be reduced to 170 ADA, I would consider decreasing the relay count and/or increasing the pool fee. However, these measures could result in a less favorable ranking within Daedalus, leading to fewer delegators and decreased block production. Additionally, I might explore other options, such as cutting developmental costs and eliminating certain extra security features that, while not essential, are beneficial to have.
Potential impact on the broader Cardano network:
Decreasing the MinPoolCost could negatively impact the health of the Cardano network, as SPOs may resort to cost-cutting measures. For example, SPOs might raise pool fees for their delegators, which could lead to a loss of delegators. Furthermore, many SPOs may reduce the number of relays they operate, which could compromise the network’s overall health and stability. A decrease in the number of relays would likely be the first repercussion of a reduced MinPoolCost.
Lowering the MinPoolCost could also create a higher entry barrier for hobbyists, making it more difficult for them to run a pool and attract delegators. This change would potentially centralize pools around individuals and companies that can afford to cover upfront costs, leading to a less decentralized network.
Not at this time.