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Cardano (ADA) Unveils Delegation Methodology

The Cardano Foundation, a Zug, Switzerland-based organisation that’s focused on standardizing, protecting and promoting the Cardano protocol technology, has unveiled the delegation system for the project, as it marches towards complete decentralization.

Cardano (ADA) Unveils Delegation Methodology 

With the Cardano Shelley era now upon us, the team is now putting all the finishing touches that will bring complete decentralization to the rapidly evolving Cardano ecosystem.

Against that backdrop, the Cardano Foundation has released the network’s delegation methodology, in a bid to promote transparency and keep members of the community abreast of the delegation process.

For the uninitiated, delegation is the process by which holders of ADA the native altcoin of Cardano who do not have the skills or interest to run a node, assign their tokens to a stake pool which does the staking on their behalf and rewards them according to the amount of stake delegated.

As stated in a blog post by the Cardano Foundation, since the launch of the Shelley mainnet, the Cardano network and development partners have attracted over 1,300 stake pools maintained by dedicated stake pool operators (SPOs) that have made it possible for more than 50 percent of the circulating ADA supply to get staked.

The Foundation wrote:

“This tremendous feat has made Cardano one of the most decentralized blockchains to date in an incredibly short space of time, and it is a true testament to the strength and participation of our valued community. In the spirit of transparency in which the Cardano Foundation was founded, we are now pleased to publicly share our delegation methodology.”

The Cardano Foundation Delegation Methodology

Notably, the team has made it clear that the delegation methodology has been designed to support the decentralization efforts of Shelley by “supporting and involving new individual stake pools.”

The team says stake pools can only be eligible for a delegation from the Cardano Foundation if they hold between 25k to 2million ADA,  must have successfully validated blocks in the past, does not have a high number of staked ADA, must be operated by a stake pool operator that only runs one pool and have not been delegated to by the Foundation in the last four delegation rounds.

What’s more, the Foundation has hinted that it will use a third party randomizer to randomly select the eligible pools according to the above criteria.

Interestingly, the Foundation’s delegation methodology has attracted mixed reactions from Cardano enthusiasts, with some completely dissatisfied.

“This is a good start, but how does this support 40-50 percent of pools that haven’t produced blocks if even CF isn’t supporting them?” said Cardano user. @careykoni.

@avilsmeier said:

“Some pools (including my own) have been up since launch, 99.88 percent uptime, all updates applied, 400k (down to 40k and now up again to 150k) stake without minting a single block. Not including these pools will eventually burn them out of the ecosystem since VERY few delegators will take their chances with such a small pool.”

How the Foundation fixes these issues remains to be seen.

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