welcome everyone today I wanted to talk
about low fee stake pools
and I wanted to talk about liquid
democracy and how
both of them may or may not
relate to each other in the future
I've been doing some independent
research looking at all these different
stake pools that are coming up and it's
very impressive
and if you go back in my catalog on my
channel
you see me harping on the negative
effects that I thought that
the certain a zero value and k factor
would have
sort of this race to the bottom
mentality and people are dropping the
fees of their pool and they have to in
order to compete
myself included I was 6% within
the ITN
and now I am 1.99% in the main net
and I am embracing the new model of
change and i'm embracing the new
landscape
that is present for stake pool operators
however there are a lot of people
or when we had certain episodes of the
cardano effect
it was made apparent to us that the
reason for pledge would be to prevent
sybil attacks however
operators are not really incentivized to
pledge large amounts because
there's very diminutive effects of
pledging
larger and larger amounts of ADA
meaning that you don't really
get additional rewards for pledging ADA
unless you have
large large large amounts of ADA and
it's
negligible hundredths of a percent that's
just how the model is and that's what we
have to work with
so I don't lambast anyone for
embracing any sort of strategy in order
to make themselves competitive
whether that be charging low
percentages
or making the pools nearly free whatever
the case may be whatever the strategy
for that pool operator
I respect the game, I respect the hustle
and you've got to do what you got to do
that being said
I did some back of the envelope
calculations and
you know it's kind of easy to spin up
these kind of free pools
that pretty much don't even charge many
fees
and there are a couple companies out
there doing that
already and they have an amalgamation of
different pools and they have a lot of
delegation to that pool
or those sets of pools already and I
find nothing wrong with this business
model again because that's what the
parameters set
and they're playing by the rules and
they're doing what they have to do so
respect to them
however you can spin up
a lot of different pools at very low
fee percentage models and it almost goes
to show you that
what if someone did that and what if
someone was a bad actor in the sense
that
they really did not care too much about
the protocol like if I spun up a whole
bunch of different pools that were very
low fee
I spun up like a dozen or 20 or 30 or 40
pools
I don't consider myself a bad actor
within Cardano I'd be playing within
the rule system but I would never want
to do anything malicious to the protocol
if that makes any sense so if there's an
actor that spins up a whole bunch of
pools
and they don't necessarily have the best
intentions for the protocol
I have a feeling that this could lead to
some adverse effects long term so this
whole idea of preventing a sybil attack
are we truly preventing the
sybil attack
and maybe we are maybe there's no way
for a pool operator who
controls a large portion of the stake
to maliciously do something to the
protocol
however there may be a scenario where
someone that has
a lot of power or a lot of delegation
all of a sudden has a lot of power
within the protocol and that I'm talking
about Voltaire
I'm talking about this idea of liquid
democracy it's been said
over and over again this whole idea of
liquid democracy is that
it works both ways it could be a
representative democracy or it could be
like an individual
democracy meaning that you could
delegate your votes to someone that
could represent you
like the political system in the United
States when you
vote for president or when you vote for
certain parties
you're voting for delegates to vote for
the end person it's a representative
democracy
or Cardano also
touts itself as being able to vote
individually so you could
you could delegate your vote to someone
or you could use a proxy in order to
vote
for your particular interest or you
could do it yourself
there are pros and cons to do it
yourself versus
using someone else or using the ideas of
someone else or
delegating your power to someone else
maybe you don't have time
maybe you want to be more educated about
this issue and you're not the most
educated about
this particular issue within the
protocol whatever
whatever the case may be there are some
people that are going to take it into
their own hands and there are some
people that are going to delegate
so as we move forward to Voltaire and we
move forward to this voting system
if for some reason
if there's an option for
delegation within Daedalus so meaning
that as you pledge you can also
kind of delegate your vote to that stake
pool
there's where we have an issue because
there are going to be a lot of people
that are
in the protocol that are not necessarily
want to know everything that's going on
with Cardano
they heard about proof of stake they
just want to get returns
so if I foresee a situation where
maybe
Cardano allows pool operators it's a one-stop shop you can also
delegate your vote
to your pool operator and these
pools that have been spun up at very low
fees they may have
a majority of the ADA that's circulating
or they may have
100 million or 200 million or a billion
ADA
underneath their system and a lot of the
people that are just chasing the low
returns or they're just
not as involved in the protocol you may
find them in those
particular pools but
what if they delegate their vote as well
so that person or that pool operator all
of a sudden has
a lot of power so this whole idea of
liquid democracy could kind of
teeter and it could kind of get a
little bit dicey so while we're
talking about sybil attacks and we're
talking about low fee pools
if somehow the pool vote
is tied with stake or tied with
delegation or it's in the same kind
it's in the same like
user interface so
it's a one-stop shop for people
there are going to be people that are
just going to delegate their vote
and those malicious actors who really do
not put money
or pledge towards their pool or may not
put pledge towards their pool
and i'm not telling this for every
single person there are people that are
running pools
that don't have a lot of pledge and
they're just running the pools and
they're not malicious actors
but the more skin that you have in
the game
the less of a chance that you're going
to act in an adverse manner
it's just the name of the game so what
do you think about this
do you think that in the future
we may have an issue, is there
a correlation between
the effectiveness of governance and
low fee pools or delegating to
actors that may not have necessarily the
best the best
intentions for this protocol i'm not
sure if i'm
articulating correctly but I want to
know what your opinions are
I want to know exactly how you feel that
these two are tied together or whether
or not they're tied together or whether
they're independent
yeah maybe i'll elaborate in
another video but until the next video
I appreciate you thank you for your time
