I have already made a post about why I will vote for option 4.
lower minPoolCost to 170 Ada
minPoolCost needs to be understood through the effect it has on competition. With minPoolCost currently of 340Ada this means that any pool with less than 10 Million Ada in total stake is uncompetitive. This is because the minPoolCost represents a relatively high percentage of total rewards. Anyone delegating to such a pool will lose too much of their rewards to this mandatory fee going to the pool operator.
You are likely to see a lot of incumbent OG operators argue that this fee should not be reduced. They will make all these arguments about needing to pay for high quality gear and high network reliability. However, it is easy and cheap to run a stake pool. Ordinary commodity gear and a fibre internet connection is all you need and will probably get you 99.9% uptime. The Ouroboros protocol is not only designed for, but actually expects, some disconnectedness of stake pools. Here is a quote from the Ouroboros paper:
“We note that the availability assumption (restricting honest parties from long periods of dis-connection) stated above is very conservative and our protocol can tolerate much longer offline times depending on the course of the execution.”
If the cost to increase uptime from 99.9% to 99.9999999% is pool operator fees increasing from 1% to 2.5% then delegators are overpaying by 15 times to prevent 0.1% lost blocks due to downtime.
The real truth for why many incumbent pool operators don’t want the minPoolCost lowered is because it is a barrier to competition. Pools that have managed to make it to where they control more than 10 Million Ada total stake, don’t want competition.
If we want Cardano to be decentralised then we need more pools and more competition. Anyone should be able to run a pool if it makes sense for them to do so. There should not be any artificial limit placed upon what a pool must charge. I would prefer to see minPoolCost lowered to 30 Ada as was suggested by IOHK Quant @Colin_Edwards in this post. This was part of his reasoning:
The proposal that best adheres the initial specification of the minimum fixed fee, in my opinion, is to move the fee from 340 Ada to 30 Ada. This would reset the relative sensitivity of the variable fees and fixed fees back to their original levels, and it also closely matches the original fiat values of the fee, which was originally set to around $5.25 / day. That will not fully compensate pools, the intent was that the variable fee would be useful in more situations than just when demand for staking far exceeded the available capacity of stake pools.
In any case, 30 Ada fee is not one of the options in the poll, but lowering it to 170 Ada is at least a step in the right direction of more decentralisation. So, this is what I will choose.
Increase K to 1000
Increasing K will force multii-pool operators to split their pools further and in turn cause delegators to re-think their delegation strategy. The mult-pool operators may have some difficulty managing this situation and hopefully they will lose some delegation, which will be beneficial for small pool operators. More importantly, if stake moves from multi-pool operators to small pool operators then this will improve decentralisation.
I think K needs to change in order to push delegators into making a decision about re-delegating or staying put. Hopefully then at least some delegators will shift their stake for improved decentralisation.
What about multi-pool operators?
I argue that running multiple pools is against the design intentions and philosophy of Cardano. The design architect, Aggelos Kiayias, has basically said as much. Have a read of this blog post by Aggelos, particularly under the headings:
- Be wary of ‘pool splitters’
- Don’t split your pool
This quote from the article sums things up pretty well:
“If you are a whale (relative stake > 1/k) you can create multiple pools – but you should keep your leverage as close to 1 as possible or less. Pool splitting that increases your leverage hurts the delegators’ rewards, and more importantly, it hurts the decentralization of the Cardano ecosystem, which is detrimental to everyone.”
In summary, I hope that more pool operators vote in favour of lowering the barriers to competition by lowering minPoolCost. Furthermore, I hope operators vote to increase K. Both changes will be likely to improve decentralisation.