Driving Blockchain Technology: Cardano Foundation’s Activities Part 7

02 February 2024 • News & Updates
Renagh Mooney
Global Communications Director

Strengthening Cardano's operational resilience

The Cardano Foundation, along with the broader ecosystem, works to support the Cardano blockchain as a public infrastructure — this requires reliability. Operational resilience encompasses all efforts to improve Cardano’s suitability and recognition as an infrastructure component of institutional-grade use cases. To this end, Cardano stake pool operators (SPOs) play a pivotal role in validating and adding new blocks to the blockchain. By running and maintaining stake pools, SPOs contribute to the security, stability, and overall health of the Cardano ecosystem.

Moreover, SPOs facilitate decentralization by encouraging widespread participation through stake delegation, enabling individuals to actively engage in the network's governance and decision-making processes. A growing number of stake-relevant pools or nodes paired with more on-chain participation further contributes to the network’s decentralization. Specifically, the distributed nature of stake pools enhances the network's resistance to centralized control or malicious attacks, fostering a robust and resilient infrastructure.

Throughout 2023, the Foundation highlighted the work of SPOs and engaged with them in a number of ways. From parameter updates to targeted masterclasses during the Cardano Summit 2023, we sought to provide assistance around multiple relevant topics.

Masterclasses Curated for SPOs

SPO Masterclass - Cardano Summit 2023 - Dubai

From 2 to 4 November 2023, the Cardano Summit held a main stage event in Dubai, with more than 25 community-led events worldwide and thousands of virtual attendees across the continents. In addition to the Main Stage and Pitch Arena panels, a variety of subject matter experts presented to diverse audiences. The Foundation also curated a series of discussions specifically for SPOs, acknowledging the critical role they play in monitoring and maintaining the Cardano network.

In one such session, the Foundation’s Markus Gufler, Technical Community Lead, delivered the SPO Masterclass: Cardano Network Health Monitoring Q&A, which provided attendees with a comprehensive demonstration of the Cardano network health monitoring tool. This tool equips SPOs with a unique way to understand the scope and limits of pool operations, as well as the global network, by combining telemetry data together.

Professor Claudio J. Tessone and Dr. Sheng-Nan Li from the University of Zurich also led the SPO Masterclass: Cardano Tokenomics at the Stake Pool Level, exploring a powerful blockchain analytics approach. Specifically, the two presented a better visualization and long-term support for proof-of-stake (PoS) protocol design by covering three main topics:

  1. Algorithm of address clustering based on the EUTxO pattern.
  2. Data analytics on the trade-off between inclusivity and decentralization in stake and reward distribution of ada.
  3. The framework of modeling and evaluating ada tokenomics.

In the SPO Masterclass: Legal and Regulatory Aspects of Staking Mechanisms, D.Jur. Nicola Massella of STORM Partners delved into the world of staking. In addition to breaking down the different types of staking mechanisms available, Massella went on to compare US and EU approaches to crypto regulations and the precedents that currently guide policymaking. 

The SPO Masterclass: (Hardware) Wallet Security and Q&A session led by Chris [STR8], founder of Straight Pool, further examined SPO and ada holder concerns regarding wallet security. The session aimed to help both parties feel more confident when navigating this complex field, allowing them to assist others and make informed decisions for their own wallet security.

Moreover, Ashish Prajapati, Founder of Strica, delivered the SPO Masterclass: Ouroboros Network Libraries, a comprehensive live demo of the Ouroboros Networking Library meant to help developers gain a good understanding of its potential. The demonstration went beyond theory, offering a clear vision of the library's capabilities and allowing developers to grasp its practical applications.

SPO Masterclass Participants - Cardano Summit 2023 - Dubai

Voicing SPOs’ stories

At the time of publication, there are more than 3,000 registered stake pools on Cardano, with approximately 1,000 active SPOs performing a fundamental role in monitoring and maintaining the network while also ensuring consistent node uptime. The Cardano Foundation’s “A Spotlight on Stake Pools” series highlights these critical contributions to the operational resilience of today, plus the survivability of Cardano in the future. The series features some of the diverse SPOs across the Cardano ecosystem, with each installment showcasing the work, projects, and open source initiatives of a different SPO.

In our first installment of 2023, we explored the Lido Stake Pool operated by co-founders Stephanie King and Darlington Wleh, who take a multilayered approach to community building, often contributing to Project Catalyst as well as maintaining the Lido Nation website. In addition to publishing Lido News, a community newspaper, they regularly host educational podcasts and X (formerly known as Twitter) Spaces.

Next up, we took a closer look at how the Hazelpool team works to support the Cardano network while donating to feline fostering and raising awareness of no-kill shelters. Since its inception, founder Nils has built on the Hazelpool ecosystem to include additional tools like the HAZELnet Discord bot. Users can access this tool at no cost by delegating their stake, which further incentivizes network decentralization efforts.

More recently, we featured the AHLNET stake pool, founded by Ola Ahlman. Over his 15-year career in IT management, Ahlman has gained expertise in deploying mission-critical servers in an air traffic control center. Today, he combines his technical expertise with a passion for working on private and open source projects in Java and other programming languages. Ahlman also spoke on his love of travel, regularly immersing himself in local traditions and lifestyles. He credits these experiences for shaping his perception of global social, economic, and ecological issues, all key aspects that led him to Cardano.

Promoting Active Participation

In April and May of 2023, the Cardano Foundation conducted an on-chain poll, built on the mechanisms we proposed in CIP-0094. After completing the single-question testnet poll, the mainnet poll asked SPOs for their stake-weighted opinion on potential changes to the k and minPoolCost parameters.

As a result of the SPO poll and subsequent Parameter Committee recommendation, the minPoolCost parameter was halved in epoch 445. This event occurred on 27 October 2023, reducing the minPoolCost of 340 to 170 ada. The change proves significant for relatively small stake pools, making it an eagerly awaited update. By halving the minPoolCost, SPOs can reduce their floor income, providing them with a more level playing field.

Using the parameter change as a practical example, the change-request process can now be thoroughly assessed and set up for public discussion or refinement as a community-initiated process. This undertaking aims to foster compromise, combine ideas, and bring mature, fully formed proposals to a vote. As a decentralized protocol, instead of a ready-made software product presented to a passive ecosystem, this approach looks to define outcomes together, experiment, identify improvements, and thus move step-by-step toward shared governance.

Promoting Cardano as a public infrastructure means that the chain’s operational resilience also depends on the collective efforts of SPOs. This makes focusing on and encouraging collaboration even more crucial. From curated discussions to featured content and on-chain voting mechanisms, the Foundation will continue its commitment to community involvement and shared governance, helping to support Cardano’s evolution.