Ardana’s long-awaited Initial Staking Pool Offering, which aims to bring fairer decentralization incentives to Cardano’s ASPA stake pools, is now live.
The Ardana ISPO is essentially an incentive mechanism for all delegates within its ASPA staking pools, which are critical for the decentralization of the Cardano network. Users can stake ADA tokens in staking pools to validate transactions and process new blocks on the blockchain, without hosting an active node themselves.
The problem Ardana is trying to solve is that some staking pools have become too big for their boots, with an outsized share of ADA staked in a limited number of them. That’s no good for decentralization, and so with the ISPO Ardana is providing a bigger incentive for users to stake their ADA in lesser pools.
With this, Ardana is trying to achieve a more balanced distribution of ADA within the staking pools. At the same time, it has also been trying to educate its community on the danger of large stake pools becoming oversaturated, at the expense of smaller pools.
“This approach will benefit Ardana and the community as a whole,” Ardana said in a Medium post when the ISPO was first announced. “We will put the health and security of the ecosystem at the forefront while also finding solutions to empower others.”
To participate in the ISPO, users simply have to delegate their ADA to one of the ASPA pools for a specific period of time. Those delegators will then receive rewards based on the amount of tokens they have staked, and the duration they’re locked up for.
The ISPO is now live and Ardana has revealed the full specifics of the rewards on offer. The most tantalizing reward is the Early Bonus Staking Multiplier, which pays out increased bonuses for those staked ADA in one to the ASPA pools from March 31 until July 4, a period of 20 epochs. The bonus multiplier kicks off at 1x, and for each epoch, delegates will see it increase by 0.05x until the maximum 2x multiplier is reached.
So if someone started staking ADA on April 29 and left their tokens in the pool until July 4, Ardana explained, they will have earned 14 epochs x 0.05x, meaning a 0.7x bonus multiplier.
The second incentive that comes into effect is the Standard Staking Multiplier, which increases by 0.01x each epoch, beginning July 4 and running until the final epoch of the year on December 31.
Finally, there’s a Small Pool Multiplier that’s applied to each ASPA pool with less than 5 million ADA staked. The idea is to provide a one-time 0.01x bonus multiplier to under-sized pools that lasts until the amount of ADA staked rises past the 5 million cap. However, the bonus will only be paid out to delegates who continue to keep their stake in the pool for the entire duration, until it reaches that cap. Once every pool has successfully accumulated 5 million ADA staked, the limit will be raised to 10 million ADA to ensure the newly balanced distribution remains in place. To reward older delegates for their loyalty, the Small Pool Multiplier has been backdated and applied to anyone who staked in an ASPA pool prior to March 31.
Ardana said the DANA rewards from the ISPO will be distributed to delegates from the liquidity mining portion via the Drip Dropz token dispensing services, with users able to claim their first distribution share on July 9. Subsequent rewards will then be claimable at the end of each epoch.
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