Reduce minPoolCost to 75 ada and increase Plutus Memory Limits (Part 2)
Discussed in the Governance Review for epochs 650 to 652.
247 SPOs voted · 18 with a rationale · 1 changed their vote
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EN — iFly (SWADA) votes YES on reducing minPoolCost from 170 to 75 ada and raising the Plutus memory limits.
DECLARED INTEREST: I operate the SWADA stake pool, which sits at the minPoolCost floor. This change directly lowers my own pool's fixed cost. I disclose that rather than leave it unstated, and readers should weigh my vote accordingly.
On the merits: as reserve-funded rewards decline, a 170 ada fixed fee consumes a punishing share of a small pool's rewards — the single-block-pool delegator penalty is already around 53% and is projected toward 100% by roughly epoch 758. IO Research has reversed its earlier position and now holds that a high floor helps large operators fragment stake into Sybil pools rather than deterring them. A healthy long tail of small, independent pools is one of my stated priorities as a DRep, and this change supports it.
Reservations: the proposal bundles two unrelated changes into a single yes/no vote, and a lower floor should arguably be paired with a minPoolMargin and an increase in k to prevent a fee race to the bottom. I would support those as follow-ups. I vote YES.
SV — iFly (SWADA) röstar JA på att sänka minPoolCost från 170 till 75 ada och höja Plutus-minnesgränserna.
REDOVISAT INTRESSE: Jag driver stakepoolen SWADA, som ligger på minPoolCost-golvet. Ändringen sänker direkt min egen pools fasta kostnad. Jag redovisar detta i stället för att lämna det osagt, och läsare bör väga min röst därefter.
I sak: när de reservfinansierade belöningarna minskar tar en fast avgift på 170 ada en orimligt stor andel av en liten pools belöningar — straffet för delegerare i en pool som gör ett block är redan runt 53% och beräknas nå 100% omkring epok 758. IO Research har ändrat sin tidigare hållning och menar nu att ett högt golv hjälper stora operatörer att splittra stake i Sybil-pooler snarare än att avskräcka dem. En sund lång svans av små, oberoende pooler är en av mina uttalade prioriteringar som DRep, och denna ändring stödjer den.
Invändningar: förslaget paketerar två orelaterade ändringar i en enda ja/nej-röst, och ett lägre golv borde rimligen kombineras med en minPoolMargin och en höjning av k för att förhindra en priskrig nedåt. Jag skulle stödja detta som uppföljning. Jag röstar JA. - NoNo rationale
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I vote YES on the Protocol Parameter Update action "Reduce minPoolCost to 75 ada and increase Plutus Memory Limits (Part 2)" (ab474223d40e2e...a306#0).
On bundling
It is unfortunate that these two parameter updates were bundled into the same action. It has been demonstrated on-chain that chaining governance actions of the same type can be coordinated successfully. This bundling denies governance actors the ability to assess each on their merits and muddies the waters about who is actually voting on what. minPoolCost, although a parameter that impacts SPO operations, is not actually voted on by SPOs. Bundling it with the Plutus memory units action that DOES require an SPO vote makes it appear as though SPOs have a say on minPoolCost, when they do not. It was also a risk as minPoolCost could be seen as a more contentious update than the Plutus memory units update which has already seen "Part 1" approved earlier this year. I would have preferred to have seen the Plutus memory limits proposal submitted first, with minPoolCost chained to it, and appropriate educational communications put forth as to the reasoning and sequencing of their submissions and potential ratifications.
Plutus memory units
I vote YES on the Plutus memory units increase as it is "Part 2" of the proposed increase from earlier this year. This was not possible to achieve in one step due to Constitutional guardrails limiting the size of the increase in one step. "Part 1" was approved, has been enacted and live for a number of months now with no ill side-effects. Therefore, I trust the benchmarking and analysis of the Technical Steering and Parameter Committees and vote YES.
minPoolCost reduction
I also vote YES on the reduction of minPoolCost. While Bitcoin has its widely acknowledged and often celebrated "halving" events, Cardano also experiences its own "halvings". The only difference is, Bitcoin reward halvings are step-changes, while Cardano rewards decline along a curve every epoch. As a result, it often goes unnoticed. Block rewards are now below 300 ada, in 2020 they were above 1000 ada. minPoolCost is the minimum fixed fee imposed by the network and is deducted from any block rewards earned in an epoch. If no blocks are produced, no fee is taken. As block rewards decline, this fixed fee negatively impacts smaller pools that make less blocks per epoch than larger pools. A pool only making one block per epoch is forced to take ~57% of the rewards in fees (if margin is set to 0%), reducing their ability to offer more competitive returns each epoch that they validate blocks. When minPoolCost was last reduced from 340 to 170 there were concerns about a "race to the bottom" which history has shown did not materialise and many pools still operate with a 340 ada fee today. This reduction lowers the minimum while still allowing operators the freedom to choose any number above that.
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I will vote YES on this proposal, I've always been against the minPoolCost parameter as it makes it very hard for small pools to get traction, seeing this decrease is very good for Cardano's decentralization, and hopfully it will be replaced by a minMarginCost parameter soon. Furhermore I am also in favour of increasing the Plutus Memory Limits as this will give more head room for dveloping on Cardano, the worlds best blockchain :)