Why I am Exiting the Single-Owner-Single-Pool Advocacy

On February 4, 2020, I initially mentioned the unhealthiness of pool farms in Cardano’s decentralization infrastructure. Back then, it was not mainnet. Instead, it was the ITN (Incentivize Testnet). Since then, I have been a strong advocate for the single-owner single pool approach to Cardano decentralization. I significantly contributed to the vision of the CSPA (Carando Single Pool Alliance). I wrote several articles against pool farms and in favor of single-owner-single-pool. Despite my strong advocacy, I have changed my mind, and I am no longer promoting the single-owner-single-pool as the sole entity for Cardano’s decentralization infrastructure. So, what changed? Why am I flip-flopping or backsliding? Why am I willing to be labeled a hypocrite? A lot has changed after my recent research and observation of the evolving stake pool ecosystem. This article attempts to explain my candid and painful exit from the single-owner-single-pool concept that I have stanchly advocated till about a week ago.
After recently researching and observing the current Cardano stake pool landscape, I arrived at four major indisputable conclusions.

  1. While Ourouborus parameters (D, K, A0, etc.) can impede their formation, those perimeters cannot prevent pool farms from participating in Cardano’s decentralization infrastructure. Nor can it be implemented by algorithmic protocols in Ouroboros.

  2. Neither IOG nor the Cardano Foundation can legislate a single individual or entity from owning more than one stake pool. It centralizes authority and defeats decentralized governance.

  3. Human ingenuity to game the system for profit is smarter. If a single owner wants to create and own several stake pools, there are exponentially many ways to accomplish his/her goals.

  4. IOG is fundamentally advocating that stake pools operate as a for-profit business. As a for-profit business, the primary goal is to maximize business profit.

These conclusions enlightened me to painfully accept that Cardano’s decentralization will consist of a plurality of various types of stake pool entities and infrastructures. Though painful, it is an inevitable fact with which I had to wrestle. In the end, I had no option but to accept what is fair to my stake pool team, myself, and our company. I still believe that the single-owner-single-pool approach provides the most resilient decentralization infrastructure that can withstand coordinated malicious attacks from colluding national governments, hackers, and other significantly large entities. However, as a business, I have to be pragmatic and caring for my teammates. Without our stake pool’s profit, we cannot solely and financially support our Cardano community, Cardano South Florida Meetup.
In conclusion, DApp360 will continue to use its resources and talent to support the Cardano ecosystem. We will continue to evangelize the Cardano blockchain and its native cryptocurrency, ADA. DApp360 will continue to advance the mass adoption of ADA. However, we are exiting the Cardano Single Pool Alliance. It deeply pains me to change my view. I might be considered a flip-flopper, a hypocrite, a backslider, a gravy-seeker, etc.

Nevertheless, I must be true and fair to myself, my company, and my stake pool team members. As a result, the DApp360 stake pool is exiting the Single Owner Single Pool Alliance. It is out of respect for the wonderful stake pool operators in the CSPA that I wrote this article.

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Thank you for sharing. I really hope we archive an ecosystem were there is room for everyone and not become large-pools-owned-system.

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That was and still is my fear. However, we can not allow fear to cause us to restrict the potential of what Cardano could become. Yes, there’s always the possibility of Big Tech, and Big Business eliminating the little guy, but I think Voltaire will regulate those possibilities.

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Out of curiosity how much stake does a pool need to be profitable at this point? I realize peoples costs are different but any idea would be helpful.

Thanks!

Depends on the period in which they want to calculate the rewards, and the investment in setting up pools.
In general, the more difficult (less stake) it is for SPO to make blocks, greater but more rare their reward is (ofcourse taking into account fixed cost that is deducted for pool operation) from delegator’s point of view. At the same time, from SPO point of view - a cheap pool can be set up for as less as 5$ per month to some who claim to spend 2000$ per month :slightly_smiling_face:

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So if a pool had 6 to 8 million Ada that would be good? Enough to make blocks every epoch and attract more delegates?

Not necessarily. Currently, the pool (with 6 million stake) should AVERAGE OUT around 3 blocks every epoch. However due to the slottery (random assignment of block each epoch) the pool may have 7 blocks one epoch, and 0 blocks the next. 0 blocks in an epoch scares away delegates. We lost 300K in stake because delegates thought it was our fault. Example, in epoch 221 DApp360 pool got 7 blocks but in epoch 224 we got 0 blocks. Basically, with 6 - 8 million ADA, a stake pool is not guarantee a block every epoch, but they will make it up in few epochs down the road. Hope it makes sense.

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It does thanks!

Respect is a interesting emotion, and renouncing one stand for another is admirable, but maybe you have not persisted enough in your single Pool Alliance to get the satisfaction of knowing you are on the right path, though mass adoption will mean Reality Humans have the opportunity to go to trusted operators to receive their returns from staking, Imagine when Paypal announces the establishment of a Cardano Pool in every geographically safe area…Thanks for your leadership thusfar! Thats coming form someone who recognise Digital Sovereignty over my reality sovereignty!

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Thanks for your constructive feedback and insight. Much appreciated.

It is tough to lose you but it is your right to do so. I think the CSPA will soldier on. Thank you very much for your contributions and the advocacy.

The remaining members of CSPA will try to make you proud :wink:

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Thank you for sharing your thoughts with us.

I have little trouble following the logic here though. I respect your decision to do what is best for you. I even agree on many points you have raised.

What I don’t understand what does it have to do with Single-Owner-Single-Pol Advocacy. Why did you need to exit it in this fashion?

With saturation point of 64 million incoming in less than a month - are you at risk of being saturated and hence limiting yourself to growth by having just ONE pool? Okay - let’s say we hit 1,000 k in March 2021 - are you at risk then? Help me understand.

@danny_cryptofay If you read the last line in my article, it explains why I am exiting in this fashion. The line says: “It is out of respect for the wonderful stake pool operators in the CSPA that I wrote this article.” First of all, I am exiting because I don’t want to say one thing and do something contrary. It’s hypocritical to advocate single-owner-single-pool while owning several stake pools. Second, since my medium of advocacy was writing articles, my exit should be the same. It’s where my audience is. Thirdly, you should have done some research to sustantiate your “Saturation” question. A simple look at Pooltool.io will show you that 6 million stake pool like mine is no where near 64 million or the current 210 million Saturation. So, Saturation is not the motivation for this article. By the way, clicking on the above link will provide you with my pool stats. It’s all about transparency and trust. Lastly, it has to do with single-owner-single-pool advocacy because I intend to create multiple pools. I hope it clarify things for you. A question for you. What will a single pool (business) owner do when they have 32 million (half of Saturation point at k=500) stake and K is increased to 1000? Remember, IOG and CF are aiming for K = 1000. Thanks for your concerns.

Thank you for your kind response. So that’s where I don’t understand - why do you need additional pools when you have so much room to grow in your existing pool. I guess - I should have worded my sentiments in the previous question better. My apologies.

@danny_cryptofay Good question. You are correct that I do have a lot of room to grow in my current pool. So it doesn’t make sense to consider a second pool or to exit the CSPA. The simple answer is that I intend to run a business with more than one stake pool. Knowing my intentions, I should not be consuming the marketing resources of the CSPA…hence my exit. I always had the marketing resources to saturate more than one pool. However, I initially restrained my company while trying to play by the recommended (not hard-coded) rule. My initial restraint was based on an IOG’s Blog (Preventing Sybil Attack) which implicitly rcommended the concept of single-owner-single-pool. However as of late, this concept is no longer the concensus and IOG is advocating that stake pool be run as a business. So along with the changing concensus, I have to adapt and not appear to be a fake. After all, there’s always digital footprint of what I have advocated in the past.