In recent debates, it has become apparent that people don’t fully understand how staking and block production are related. Some people mistakenly believe that if a pool started using Contingent Staking (CS) functionality and required KYC from stakers, it would simultaneously start censoring transactions. In this context, the two functionalities are completely separate. SPOs can already filter transactions today and do not need CS. Conversely, a pool that would require KYC from stakers can insert a transaction into the block regardless of the fact that the blockchain address is blacklisted. Let’s describe it in more detail.
- SPOs can censor transactions by modifying the source code of the Cardano node.
- Even if 80% of the pools censor transactions according to the same blacklist, the blacklisted transactions still get into the blockchain through the other 20% of the pools.
- If regulators want to force SPOs to censor transactions, they can do it today.
- If SPOs want to successfully operate a pool, their conduct must be consistent with the wishes of ADA holders. The degree of censorship of transactions on Cardano is primarily determined by ADA holders.
- Censorship is prevented by decentralization, permissionless ness, and openness of Cardano.
- A staker can delegate ADA to a pool and still the pool can censor transactions of the delegator.
- If the ADA holders refuse KYC and transaction censorship then no central authority has a chance to curb their will.
This article was prepared by Cardanians with support from Cexplorer.
Read the article: https://cexplorer.io/article/what-is-the-relationship-between-staking-on-cardano-and-minting-blocks