THIS IS A COMPLETE FARCE

So,

our pool is not producing any more blocks. We had produced 2 in 8 months.

The great idea of delegating 3 200 000 ADA to small pools who ask for it in the community. I don’t feel like begging for pity and asking rich people to feel bad for me thus delegating to my pool.

Why should I put even more money and work into our pool when there are absolutely no incentives for people who just do NOT want to ask others for handouts?

Can’t there be consensus that concentration of stake is bad and decentralization is good? Why not code this into Cardano? WHy have stakepools producing hundreds and thousands of Blocks an pools like ours producing 2 ? Is stake feudalism good? The rich decide, the poor vanish?

I think it is unfair that now CH and 100 “community pools” (what a newspeak term) are rivals in the competition for blocks.

We have got 2(!!!) blocks in 8 months.

This just makes me sad, I was full of hope, now after all this action from Charles and the foundation it feels like a slap in the face.

Is the claim of decentralization even true?
Rich pools control the network. Rich pools make the money in this network. They decide.
Rich people like CH.

Do you have ANY IDEA how bad SPOs do feel who didn’t even get the message that 100 pools are being thrown at with money?
What is the community doing to them? Telling them: Oh, sorry, you were busy or had no idea? Bad for you, watch your chances of block prodcution go down the drain, loser…

I am so done with this

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I feel you brother - all the smaller pools are in the same situation.

There are similar discussions going on:

We can only fix this by CIP (Cardano Improvement Proposals) via Catalyst. Do you already have an idea how to fix this?

I’m thinking of the following: 1st: Distribute one block to mint to every active pool. 2nd: Distribute the rest of the blocks/leader slots via the lottery.

What do you (people) think?

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@shawnim has done an incredible job :clap: and proposed a new formula for the pool ranking mechanism.

I think it is an important piece in the puzzle.

Just leaving this here: https://github.com/cardano-foundation/CIPs/pull/21

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Yeah, fair enough - but it’s just about the ranking in Deadalus. It does not solve the design flow (Leader slot election/rewards distribution) in the system.

What in your opinion is the design flaw? There is an explicitly stated goal of having “k saturated pools” where it will be of no one’s interest to diverge from the Nash Equilibrium.

Lets say, Allonso goes really well and it turns out to be in the best interest of the network to have 100k pools like Ethereum. Lets further assume you still only have 5% of the slots allocated to new blocks (i.e. 21600). Lets further assume that max inflation is to be a well guarded constant, like 16m per epoch. In such a scenario, you would converge to 100k pools saturated at 2.3m of which 21.6% make one block per epoch. Most hardware (i.e. 78.4%) would be serving the network for free. The one block they can expect to make once a month can have a total reward of 740 ADA and not more.

I agree, that operators who run more than one pool with very little pledge not only hurt the network but also everyone else. That problem alone could IMHO be easily fixed at the protocol level, for example by requiring a pledge no less than 3% of the active stake, which is describde in more detail here.

At the end of the day however, we cannot and should not ask the network to pay out more. What could be done is to distribute the work (and therefore the rewards) more evenly. The extreme would be, no one makes more than one block/epoch, but is this wise from a resource utilization perspective?

You can have a mental picture of a gigantic roulette wheel with 22.920.000.000 slots. For every ADA you hold you can place your bet on one of the slots. 21.600 slots will be winning, the others loose.You can win with a single ADA, but on the long run you will need more ADA to win consistently.

I guess nobody really wants to change that fundamental property of the game. What can be changed is the saturation level (i.e. the maximum of active stake) to encourage a more even distribution. Be careful though, is a setup where everyone will make one block per month at most really the setup that everyone would (finally) be happy with - not to forget the network itself?

but it’s just about the ranking in Deadalus

I wouldn’t say “just” - I can only guess, but I think the Daedalus ranking plays a very important part in choosing a pool to the majority of users. I’ve heard Yoroi is using the same ranking formula as adapools.org which also results in showing pools with high stake on the top of the list (simplified, but not so wrong). If they would adapt to the proposed formula this might make quite an effect on users decisions.

You’re right. I agree that introducing a minimum pledge based on active stake would probably help. This should also be taken into account in the pool ranking, so If your pledge is less than 3% of active stake it has a negative effect on your ranking.

The design flaw is the fundametal assumption: Huge stake pools are more reliable/more valueable to the network than smaller pools. The system favours the rich over the poor. It favours a large pledge over a tiny pledge. It rewards the profane accumulation of stake/power held by the same big players.
How is the Binance pool better than the pool ran by Average-Joe? They probably running in the same AWS cluster! Decentralization? How are the people in Zimbabwe, Haiti or Kazachstan supposed to run the pools? The cannot afford a pledge of 15 millions ADA! They just don’t have a chance to produce a single block under the current conditions. There you go!

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The factors to consider are unfortunately not just decentralization, but also security and scalability and perhaps a few others. Currently, if you have 1k of ADA you can reasonably expect to mint 7 blocks in 100 years. This may be too little for some, but it also limits the potential malignant power someone with 1k can assert on the system. Not all the rich are bad, some are really bad. Therefore, the system must find a way to protect itself against these types of attacks. This is commonly known as Sybil Attack. In lay terms, you do want to see “significant stake” to allow someone to operate a node. If it costs close to nothing, it will also cost close to nothing to harm the network and all other participants with it.

A good proof of stake protocol takes all these considerations into account and there is excellent research about this. Some might not sufficiently understand the problem domain, have no time/energy to digest that research or simply don’t bother, they can of course still participate and so they should.

At the same time, shaping the future is all about making an effort to understand the complexity of things and then being able to engage with others in a meaningful and productive way.

Ouroboros is not the last word of course, but it is a significant improvement over Proof-of-Work, as you would probably agree. Yesterday, in the SPO call, there was talk about the a0 parameter and that we are very likely to see not just a value change, but also a significant formula change with the effect that more pledge will significantly benefit “smaller” pools. There was also some talk about linking the fix cost (i.e. 340 ADA) to some “real” external cost an operator actually has. The research and all the game theory about this is not yet complete, and I love it when they are taking this calm and highly educated approach to these non-trivial matters.

All-in-all, this is totally going in the right direction IMHO

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So what will change when a0 parameter will increase and how it can help small pools? As I understood it will increase the influence of pledge, but small pools also won’t mint blocks and works for free.

Attracting delegates becomes inconceivably difficult without millions of ADA. For example, I have 20k and I know that I probably mint 1-2 blocks this year, which means I work at a loss because I’m not a millionaire. I have nothing to attract delegators because people want rewards and this is absolutely normal. Vicious circle…

I believe in Cardano and I will stay here as long as I can, but in current realities we are just projecting the real world, hope together we can handle.

We started not long ago and are delighted to have a 2500% luck as we minted a block. Unfortunately our biggest delegator of 4.5K ADA decided to leave us for a bigger pool after a few days only. We juste gave 350€ to a non-profit organization as a celebration and we give 15% of our rewards to the NPO.

We keep hope and are still very positive and we wish all pool operators (big and small) the very best.

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I like the idea of trying to include as many pools as possible but the problem with this proposal is that it incentivizes SPOs to make lots of pools with very low pledge and thus getting the block reward in each pool.

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I think it’s a shame you feel this way.
Running a stake pools is like running a small business. There is more to it than just setting up a stake pool and expecting guaranteed success. If this was the case, we would be saturated with stake Pool operators. Promoting your stake pool is part of the deal and should not be considered as asking for pity. If you play an active part in the ADA community, why not let people know about it and if they appreciate it, they can stake with your pool.

You also don’t need a Stake pool to be part of Cardano. In my opinion you are more guaranteed success by just holding and staking your ADA. You might find your biggest cost running a stake pool is the loss of rewards staking to your own pool. Whatever you decide I wish you success and hope you don’t give up on ADA even if you stop the pool.

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You don’t have much ADA as pledge. The problem is that ADA is critical for Proof of Stake and as a Stake Pool operator. There are other pools with higher pledge that are also 0% . What is the incentive to stake to your pool? I’m not seeing it.

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I agree there’s a problem as the system really favours the big boys who can run multiple pools, the ex-ITN SPO’s or other early Mainnet SPO’s but now it’s almost impossible for new SPO’s to get enough delegation & so produce blocks meaning a lot of investment of both time & money with no return.

I had toyed with the idea of becoming a SPO, I didn’t have the time during the ITN & now feel it’s too late for the reason you & others have highlighted. I think pledge amount could help particular to disincentive those running multiple pools with low pledge but aside from that it would be useful if Daedalus had an easy method to delegate to multiple pools so people can diversify more across different pools.

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Which call :thinking:? I have some hope and think as community this will be adjusted but also some will be left out and that is be design. Those that got in early are like seed fund and took action. During this time last year was busy and did not pay attention, that is on me. I believe k is 500 right now which sort of means to me that top 500 have the best luck and others still have a chance, but it has already been stated that this will change but now like in Q 3. Till then I will be learning what I don’t know and promoting. Although kind of hard to promote when haven’t produced any blocks.

Regards
COINZ

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Perhaps this fits into the conversation quite nicely …

ASTOR is now paying dividends for loyalty.

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My opinion is exactly the same. My BP has been running 24/7 for 3 months with 3 relays at different points. Everything seems to indicate that it is working correctly and that it is ready to support the Cardano network. But the truth is that since the beginning has been a short time ago, there is no obvious opportunity to have enough ADA delegated to create blocks. That is why in any case my opinion is that a small change should be made at least so that the pools that really have a good job done behind can generate some blocks to be able to continue improving and maintaining. In any other case, it makes no sense to create a “decentralized” network that then cannot become “decentralized” in a real way. Finally it will be managed by a few without the possibility that others may have opportunities.

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Wouldn’t this just cause faster concentration? Lets say, you put in work, all the stars align and you get 10mm ADA in your pool. You then need to come up with 300,0000k ADA or you’ll be punished. Binance has no problem coming up with 300k ADA.

Welcome to the “social capitalism” or however you want to call this system. It’s the same with donations for new businesses in the EU, and probably everywhere else.

Imagine you run a restaurant. You’ve spent years organically building the business, searching suppliers, calibrating margins and establishing position on the market. Suddenly a new kid receives funding and sets up a competitive restaurant on the other side of the street. Using money he didn’t earn himself and which you also paid in your taxes, he sets lower prices and takes away your customers. After 2-3 years he has ran out of funds and closed the business. Very likely you also did so. Perfect lose-lose situation.

Too bad this type of economic thinking gets into Cardano community.