TL;DR: Decentralization is a core worth of the Cardano group and of SundaeSwap Labs. Our ISO mannequin — although it was designed to help the beliefs of decentralized governance by not spinning up our personal SPOs and by placing SPO choice to a vote — led to a small lower in an necessary metric of blockchain decentralization. That mentioned, Cardano remains to be much less centralized than most different high blockchains, and SundaeSwap is asserting additional steps to help decentralization. These embody a proposed Reverse ISO, through which contributors are rewarded for delegating ADA to Single Pool Operators who obtained a minimum of one vote within the unique ISO/Scooper vote, and extra initiatives to be introduced within the coming weeks and months, together with extra particulars on the formation of the SundaeSwap DAO.
Vote on the Reverse ISO proposal right here: https://tinyurl.com/sundaevote
The ISO idea as initially envisioned was an thrilling option to promote new protocols, reward group members, and reinforce adoption of one in every of Cardano’s key options, all whereas lending a hand to lots of the group’s Stake Pool Operators. And the concept labored. Too nicely. The group responded with such enthusiasm that we noticed an enormous focus of ADA staking energy within the SPOs elected by the group for the SundaeSwap ISO. As SPOs started to strategy saturation, the group began to precise issues, and never simply in regards to the potential tapering of ADA staking rewards but additionally the focus of staking for the SundaeSwap ISO. That focus appeared to be operating counter to one of many core values of the Cardano community: decentralization.
This isn’t the primary time a DeFi protocol’s strategy to attaining and bettering decentralization have been challenged, and it received’t be the final. Sustaining the beliefs of decentralized finance would require a relentless balancing act with the preservation of transaction safety, regulatory compliance, the practicalities of governing an early-stage however quick rising dApp, and little question many different areas. However decentralization is not only a super for the community: it’s a core worth to SundaeSwap Labs and our group.
SundaeSwap is dedicated to supporting real decentralization in all features of the DEX operation. Proudly owning SUNDAE is not only a badge of membership in a group; it’s the governance token for the SundaeSwap DAO that can launch this summer time when the Cardano parameters permit. Decentralization represents the very beliefs that helped construct and develop the Cardano group.
However, given that is early days, there’s way more we are able to do to uphold that excellent. Now we have appreciated the energetic and productive conversations occurring in each the SundaeSwap and Cardano communities which have helped reinforce this precedence. Given the dimensions of our personal group, the SundaeSwap ISO diverted quite a lot of delegation away from smaller swimming pools with particular person operators, and began a pattern in the direction of, moderately than away from, centralization. Whereas many have recommended we tackle this by placing our thumb on the size of the SPO group vote, we didn’t really feel that was the correct strategy both, and so we thought lengthy and laborious in regards to the nature of decentralization, and the way we’d assist reverse this pattern. .
Decentralization is a phrase that our trade leans closely on, It’s on the core of what we do, and an concept that has ignited a hearth within the minds of many.
After we conceived of the ISO, one of many key features was how decentralized it was: with such a low barrier to entry, anybody may take part, and anybody may safe some quantity of voice within the DAO being fashioned across the SundaeSwap protocol.
At every step of the ISO course of, we tried to let the ethos of decentralization information our determination making course of:
- Slightly than run upwards of 100 stake swimming pools ourselves, we turned to members of the group to run them.
- Slightly than choose these members ourselves, we ran one of many largest on-chain governance occasions in Cardano historical past to let our group select them.
- As a lot as attainable given Cardano’s present limitations, we averted performing as a government and let the group determine which swimming pools they valued
It’s ironic, then, that one of many honest criticisms that folks have leveled in opposition to the mannequin is across the position it has performed in centralizing Cardano itself. An unintended consequence, fueled by the extreme and overwhelming pleasure for our mission, is that we now have concentrated almost 7 billion delegated ADA behind 40 totally different stake pool operators. Within the epochs main as much as the launch of the ISO, this even decreased our Nakamoto Coefficient (the de-facto customary for measuring decentralization) from 25 to 22.
The above pattern actually doesn’t spell doom for Cardano; it’s nonetheless bigger than many different chains, and this time last year the Cardano group was celebrating a Nakamoto coefficient of 18. The hassle and coordination it could take to coerce 22 totally different entities to behave in opposition to the stake they themselves have within the success of Cardano is staggering to understand.
Nonetheless, as a pattern, it’s regarding. As a extremely seen mission within the Cardano house, and one which regularly serves for instance for future initiatives, we’ve been pondering deeply about how we are able to contribute to reversing that pattern.
Extra necessary than what we now have carried out is what we do subsequent. It’s clear to us that the DEX ought to help small single pool operators and play an energetic position in rising the ecosystem’s minimal assault vector (MAV), And the perfect place to do this is to empower the Single Pool Operators that at present obtain somewhat greater than 21% of the overall ADA delegated on the blockchain.
Over the previous few days we now have seen many group members (even a few of our scoopers) encouraging delegators to maneuver from ISO swimming pools on February 14th. With the ISO quickly coming to an finish, we felt that among the Cardano group, in the identical approach that frustration boiled initially, wouldn’t be keen about SundaeSwap intervening within the circulation of staked ADA as soon as once more.
As such, we wish to suggest the next program to the group to vote on. Though this vote isn’t a proper governance vote, it’s going to permit us to see the overall sentiment and if it’s one thing the Cardano group wish to see us act on. We’d love to listen to your opinions on our proposed incentive program above on Twitter and round social media on the whole.
We’re extremely excited to share our proposal of SundaeSwap’s Reverse ISO. You’ll be able to consider it as “ISO 2.0,” or a “Single Stake Pool Providing” — however we’re simply going to go along with “Reverse ISO.”
How will it work, you ask? An additional 30 million SUNDAE might be delivered to delegators who delegate to any single pool operator that obtained a minimum of one vote within the preliminary ISO and Scooper choice vote. The Reverse ISO will start after the snapshot is taken on February twenty fourth and run for five epochs, till March twenty first. An inventory of qualifying stake swimming pools might be made out there on the SundaeSwap web site upfront of the launch.
To be eligible to obtain rewards from SundaeSwap’s Reverse ISO, merely delegate to an eligible single pool operator and keep delegated for the complete 5 epochs. SUNDAE tokens might be distributed through our personal faucet, on the identical time we distribute the SUNDAE ISO rewards outdoors of DripDropz for individuals who don’t wish to pay the DripDropz service charge.
We hope this proposal will assist redistribute the delegation and produce the MAV again to the place all of us need it to be, in addition to help smaller swimming pools who’re key to protecting Cardano decentralized.
Vote for or in opposition to this proposal right here: https://tinyurl.com/sundaevote
- February 14 — Remaining snapshot of the Sundae ISO
- February 24 — Reverse ISO Begins
- March 1 — Sundae ISO Rewards Distributed through DripDropz
- March 21th — Reverse ISO Ends
- Q2 — Reverse ISO Rewards Distributed through SundaeSwap Faucet
In addition to our Reverse ISO, we’re additionally operating another applications to help within the energetic decentralization of the community and help smaller swimming pools.
Particularly, we’re dedicated to delegating all ADA locked within the escrow contract on the SundaeSwap DEX to smaller single pool operators. We plan to share extra info on this quickly as we get nearer to beginning this initiative.
Our efforts to advertise small SPOs don’t finish right here. We’ll proceed to advertise small and single stake pool operators by means of numerous applications and initiatives that we sit up for sharing with everybody sooner or later.