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ℹ️Cardano SPO Pollℹ️ So the @Cardano SPO Poll is currently happening, and here's why you should pay close attention: -- 1. The SPO poll is a test run for actual SPO voting for future governance events. Its a precedent for what Cardano governance could become 2. The poll is about changing two of the most critical parameters in Cardano. Let's take a look at these two parameters: -- 🪨 The k parameter: This parameter defines the optimal number of Stakepools on the network by setting a soft cap on the pool size. This parameter is currently set to k=500, meaning that the Cardano Network would be run by 500 Stake Pools in an ideal world. ➕ Increasing the k-parameter, in theory, increases decentralization because it encourages more & smaller pools. The current maximum ADA a stake pool can have is 64 million, so if we were to increase this parameter to 1000, the maximum ADA per pool would decrease to 32 million. This means Stake Pool Operators with large pools would make less ADA in revenue, while new opportunities for smaller pools arise. Sounds like a no-brainer, right? Increase k -> more decentralization. ➖ Not quite. A valid point against increasing k is that it would lead to a larger network, which would lead for slower block propagation between stake pools, which could make it less resilient. 🙋‍♂️ In my personal opinion we should absolutely increase k and force larger pools to lose some of their delegation, creating more opportunities for smaller stake pools and making sure that the network becomes as decentralized as possible. -- 💰 The minPool Cost: This parameter defines how much ADA per Epoch the pool will take as a minimum fee. This parameter is currently set to a minimum fee of 340 ADA. ➕ In short: The higher this parameter is the more it mathematically hurts pools with little delegation. Why? Small pools will maybe produce 1 or 2 blocks every epoch. This leads to a certain amount of ADA "earned" by this pool. Let's say for arguments sake 1 Block = 1000 ADA If the pool then is forced to take 340 Minimum ADA fee, this equals up to the pool taking 34% of the total rewards. While on the other hand larger pools that might produce 10 blocks in 1 epoch will "earn" 10 Blocks = 10 000 ADA So there the 340 MinADA will only be 3.4% of the total fees while the rest would go to the delegators. 66% for delegators on a small pool vs 96.6% for delegators on a large pool This means that small pools rewards are not competitive and incentivises users to delegate to larger pools. ➖ The negative part to decreasing the Minimum ADA fee is a possible race to the bottom, where pools might even operate at a loss. 🙋‍♂️ Again, I'd heavily argue for decreasing the Minimum ADA fee to make smaller pools more competitive with large existing pools. -- Before we take a look at the actual poll, here are three resources you should definitely take a look at: 1. The current status of the poll on @cardanoscanio: cardanoscan.io/spo-polls/968… 2. @InputOutputHK official blog post about the Pro's and Con's of changing the parameters: iohk.io/en/blog/posts/2022/1… 3. This informative video by @armyofspies: youtu.be/DRYryGCPGSI -- For the current status of the poll I'll write more into the Thread of this tweet.