The Cardano Foundation would like to make an announcement regarding our delegation methodology. As many of you may be aware, our current delegation cycle has been delayed due to ongoing technical difficulties; namely through syncing issues with the current versions of Daedalus—owing to the large number of wallets that the Cardano Foundation controls.
As a result, we would like to take this opportunity to both extend our apologies for the delay in redelegation, but also use this as an opportunity to lay out a new direction for the Cardano Foundation’s delegation methodology.
Let us first say that this is a good problem to have for a couple of reasons. Firstly, these technical difficulties have been caused by the fact that there are orders of magnitude more transactions moving through the Cardano network today than prior to the Mary hard fork. As a result, our multiple Daedalus wallets are taking significantly longer to sync, and therefore we could not redelegate within our planned time frame. This means that our blockchain ecosystem is rapidly expanding, with many more participants making transactions than ever before.
Secondly, what began as a delay now gives us the perfect opportunity to reexamine our delegation methodology and implement some of the changes that our community has requested in recent months. We will discuss these changes below.
If you’re unfamiliar with our original delegation methodology, we suggest you watch this discussion between Frederik Gregaard and Hinrich Pfiefer before you continue.
Our previous redelegation period took place over one month. We now propose that we shift this delegation cycle to three calendar months (once a quarter).
We imagine this new delegation cycle will provide a variety of benefits, including:
- Issues with redelegation are more manageable, given that more time exists to anticipate and react to technical challenges,
- Small and medium stake pool operators who receive delegation from the Cardano Foundation are supported for a longer period of time,
- Better alignment with development milestones and hard fork events to allow time to prepare and react to technical changes.
This is just one change in an ever-changing delegation methodology, and we will continue to evolve our delegation methodology with the help of our community. Below, we will briefly examine those delegation criteria which will remain the same as before.
For stake pools to be eligible for delegation from the Cardano Foundation, they must fall within the following criteria (data sourced from a self-hosted passive node):
- Hold between ₳25,000 and ₳2mn as a pledge,
- Operated by a stakepool operator that only runs one pool (difficult to verify but best effort attempt),
- Have a normal operating cost of less than 5% variable rate, and a fixed rate of around ₳340,
- Does not have a high number of ada already staked (less than 5% saturation),
- Have validated blocks successfully in the past,
- Have not been delegated to by the Cardano Foundation in the last four rounds.
To randomly select stake pools to delegate to, the Cardano Foundation will use a third party randomizer to choose from eligible pools according to the criteria listed above.
In total, the Cardano Foundation has multiple wallets from which we will delegate our ada assets. Our ada assets are equally distributed across our wallets. Single wallets will be used to delegate to one pool at a time.
So, to conclude, our selection criteria and the size of pools we are supporting remains the same. The major change is that instead of our three epoch delegation cycle, we will now move to a quarterly delegation cycle.
We welcome feedback and comments below. This thread will now become the main area of discussion for the Cardano Foundation’s delegation methodology. Please do not give your opinions and feedback in the old thread, as we may miss your comments. Thank you for your patience, participation, and helping to shape our processes.
We encourage each and every Cardano ecosystem participant with the skills and desire to become a stake pool operator to read our guide to becoming a stake pool operator.
Learn more about staking, delegation, and consensus on the Cardano blockchain in the following articles: