Curious about CIP-50 Rebirth?
Find the full CIP here
What contingencies do you have in mind if CIP-50 has an unexpected centralising effect?
We don’t see how that could happen, but if it did we could simply raise L to lessen the effect.
Won’t CIP-50 raise the barrier of entry for small pools?
Not really. There will be a marginal increase, proportional to the amount of stake a pool controls, but running a pool on Cardano will still be orders of magnitude cheaper than other chains.
Doesn’t CIP-50 flatten the rewards curve so that everybody gets the same rewards (i.e. a0 to 0)?
No. The original CIP-50 got rid of a0 but ours doesn’t. We have parameter change governance actions now, so if the community wants that they can simply set it to 0.
What initial value should L be set to and why?
Why can’t we just raise a0 to make pledge more effective?
Because a higher a0 doesn’t increase rewards for high pledged pools, it LOWERS rewards for the vast majority of pools that don’t have extremely high pledge. It would likely be very unpopular.
Why can’t we just set a0 to 0 to make the playing field perfectly equal?
Because then pledge would actually be COMPLETELY irrelevant.
How does CIP-50 help small pools?
It gives them another frontier to compete on: pledge. Starting out they might not have a lot of delegators, but if they pledge well then they will beat out a lot of others. If they don’t have a lot of pledge, they can still start out with a small amount and add to it as they grow organically. Additionally, the BILLIONS of ADA currently sitting in pools with ZERO pledge will have to go somewhere, and there’s a good likelihood that a lot of it will flow to small pools.
Does CIP-50 benefit large private pools?
No. As long as any pool has a sufficient pledge-to-stake ratio then it won’t make a difference. There will be no direct effect on any pool with more than 300k pledge (assuming L of 250)